You’re in Ireland, so don’t mention tax
Cantillon: The line that companies locate here for reasons other than tax is getting old
Carl Tannenbaum, Northern Trust, and Alan Ahearne, of the Whitaker Institute at NUI Galway.
There are a few things we could do without ever hearing again. Top of the list is that multinationals don’t come here solely for tax purposes, but are motivated by other things such as the quality and availability of skilled labour, access to education and transport, and the quality of life.
While this is probably true, we all know what’s really being said and why: Ireland is not a tax haven but a legitimate runner in the global investment race with many strings to its economic bow.
It’s a sort of diplomatic courtesy that multinational chief executives and others feel obliged to utter when they come here, presumably to calm our unease at being portrayed as on the wrong side of the global tax debate.
At an event organised by the Limerick Chamber on Monday, Northern Trust’s chief economist Carl Tannenbaum played his part in this game, playing down the likely impact of US tax changes on Ireland while highlighting our non-tax advantages.
He noted “the cost of capital” – something that is influenced by cross-country tax disparities – was not the only factor companies consider when choosing a location. Other metrics such as labour, transport and supply chains would play a part, he said.
“I think Ireland continues to check a lot of the favourable boxes and so it should be able to withstand the difference now in the corporate tax rate in the United States, ” he said.
Again this is all true, but it is highlighted with such frequency that one can’t help thinking that it’s because of our controversial tax rate.