The EU and taxation policy
Sir, – I refer to Rory Crotty’s response (October 9th) to your editorial (September 30th) that takes a Europeanist view of Ireland’s long-term relationship with the EU, contrary to my own argument of Ireland’s deeper roots with the Anglosphere.
At first Mr Crotty appears to agree with your editorial that “brute” and “blunt” tax harmonisation is not in this country’s best interests, yet he argues instead for “a redistribution mechanism” as an alternative tax reform “to ensure no state loses out”.
However, I fail to see how a small, relatively less wealthy EU nation such as Hungary, with its highly competitive corporate income tax of 9 per cent (the lowest in the EU), would benefit from having to redistribute the wealth made from corporate taxation across the EU.
Mr Crotty’s “redistribution mechanism” proposal would ultimately end up being another way for France, Germany, Spain and Italy to bring the smaller nations of the EU into taxation conformity, no different from the current problem of tax harmonisation at hand.
As your editorial astutely points out, the UK was our “closest ally on issues such as tax, trade and financial services”, meaning that Ireland must forge new alliances with small EU nations, such as the Netherlands, equally threatened by tax harmonisation. Ireland’s isolated position during the EU bailout of 2010, however, should serve as a warning of how much solidarity we can expect from our “EU partners”. – Yours, etc,
Ballsbridge, Dublin 4.