US speaker of the House defends Irish tax regime

Republican Paul Ryan speaks to ‘Irish Times’ ahead of his first St Patrick’s Day lunch

US Speaker of the House Paul Ryan  outside the US Supreme Court  in Washington DC. File photograph: Kevin Lamarque/Reuters

US Speaker of the House Paul Ryan outside the US Supreme Court in Washington DC. File photograph: Kevin Lamarque/Reuters

 

When the speaker of the US House of Representatives Paul Ryan welcomes acting Taoiseach Enda Kenny and president Barack Obama at the St Patrick’s Day lunch in the US Capitol next Tuesday, he will be the first Irish-American speaker to host the event in more than two decades.

Should we therefore expect a livelier affair than more recent lunches? “Better jokes, for sure,” Ryan says in a phone interview.

The Wisconsin Republican has attended the event many times since he was elected to Congress in 1999, but this is his first as host since he took over as speaker in October from John Boehner, who was hounded out by the hardline conservative faction of the party.

Ryan inherits a St Patrick’s Day tradition that began with two other famous Irish-American politicians, Ronald Reagan and speaker Tip O’Neill.

His heritage invokes the Irish connections of the founders that began this annual affair aimed at building bridges between adversaries.

The lunch is one of those rare occasions when the US president makes the trip down Pennsylvania Avenue from the White House to the Capitol.

The 54th speaker speaks fondly of a family trip to Graiguenamanagh, Co Kilkenny, last spring where his great-great-grandmother grew up and from where she emigrated to the US.

The Ryans met their relatives, the O’Sheas, and found the old abbey where their ancestors were married.

“We found one of the homesteads our family farmed at and got to have some pints with our cousins. It was a fantastic moment,” he says.

Ryan jokes that the hurley in his office – a gift he received from an Irish immigration group in 2013 and a nod to his Kilkenny roots – has been useful since he became speaker, overseeing an unruly party.

“Whenever I pull that stick out, people know that they better shape up,” said the 2012 running mate to presidential nominee Mitt Romney.

Ryan (46) initially didn’t want the job, preferring his role as the chairman of the powerful House of Representatives ways and means committee, the chamber’s main committee that formulates tax laws.

Weeks later, he had a change of heart and said he would reconsider if the party united behind him.

As a fiscal conservative, he is supported by both moderates and the party’s hard-right Tea Party faction.

One subject Ryan worked at on a daily basis in his past role was tax reform and tackling the problem of “corporate inversions”.

The practice has grown popular among US companies looking to cut their taxes by relocating overseas, in many cases to Ireland to benefit from the Irish 12.5 per cent corporate tax, almost a third of the US rate.

Obama has called these companies “corporate deserters” and “unpatriotic,” while Democrat Hillary Clinton in her presidential campaign branded the practice a “perversion” of the tax system.

Ryan says that Republicans subscribe “to the same school of thought that Ireland does, which is we believe in the tax competition school of thought, which is we need to make our tax code more competitive and more hospitable to capital”.

This would involve rewriting American tax laws “to make it easier for companies to stay in America and to repatriate their profits”.

Ryan acknowledges that Republicans and Democrats are deadlocked on how to fix the issue and that it will be one of the main policies “to be litigated” during this year’s election campaigns.

He rejects the view of some Democrats such as Senator Dick Durbin who sees Ireland engaging in “a race to the bottom” on tax rates – the “tax harmonisation school of thought”, as Ryan describes it.

“We think it’s important that countries compete based on being more hospitable towards capital formation and economic growth and jobs, and that’s exactly what America should do,” he says.

“We should not be subscribing to the school of thought that governments need to be bigger and bloated and less hospitable to a capital formation so the Irish are simply leading the way. We need to follow that kind of direction.”

Immigration laws

That includes, according to Irish Government estimates, 50,000 Irish people.

“We have a broken immigration system that therefore needs fixing, so we can’t continue to complain about a broken problem without offering solutions,” he says, noting that the debate will be about how it is fixed.

“The day is coming,” he adds, “because the status quo is simply unsustainable.”

Ryan does not see a path to citizenship for illegal immigrants being a viable option, only “paths to legal status”.

This, to Democrats, is an unacceptable half-way measure, creating a tier of second-class citizens.

“Getting legal status is what most people are concerned about and that’s an issue that I think you will see more discussion about.”

Having been lobbied regularly by the Irish Government, Ryan says Republicans are “very familiar with the Irish issue”.

He knows all about the undocumented Irish who cannot return to Ireland for the funerals of loved ones or other important family occasions.

“That is not a controversial issue here,” he says. “The problem is that it is getting weighed down by the other controversial immigration issues.”

The president’s executive orders, bypassing Congress, to protect more than four million undocumented immigrants from deportation, have infuriated Republicans and been blocked by states in the courts.

Ryan pours cold water on the chances – as the Irish Government has pushed for in recent years – of introducing new Irish E3 working visas, similar to the visas Australians can apply for.

“We do not see a road where we can just do separate boutique immigration Bills without fixing the broader problem.

“There is not enough support in Congress.”

Presidential battle

Republican PartyKu Klux Klan

“When I see conservatism or the Republican Party being disfigured, I feel the need to speak out in favour of religious liberty and tolerance and against bigotry.”

He hopes he will not have to do it again but he will if he has to. He does not wish to go further, though.

He has been mentioned as a unifier who might be parachuted in as an alternative nominee at the Republican National Convention in July to block Trump if necessary.

“I am not even touching these issues,” he says. “If you want to be president, you should run for president.”