It Can't Hurt To Look

Let there be no doubt that the EU is not, I repeat, not, planning to move forward with corporate tax rate harmonisation. Laszlo Kovacs has said it numerous times, hasn't he? Still and all, he's in talks that will lead to a report about the effects of such harmonisation on the EU economy. Think of your fat old auntie, ogling the dessert cart after dinner but insisting that she's not ordering. Can't hurt to look, she says, but before long there's a mound of sugary carbohydrates in front of her.

What would happen if the EU forced all of its members to tax corporate profits at the same rate? Examine the issue, research companies, from the perspective of harmonisation smoothing out the ripples caused by some countries having more than others but let's not name names or the Irish will be foaming at the mouth again.

The EU is spending up to 150 large for this study that is meant to show how much better everything could be if everyone in the EU charged the same tax rate on corporations. The same tax rate being the higher rate that France and Germany use. The one that has sent multi-national corporations fleeing to Ireland to take advantage of the tax savings.

Eoin Ryan, representing Ireland in Brussels, is aware that he's got his work cut out for him. It's a given that the bloated nations would never consider cutting their corporate tax rate, despite evidence that more revenue can be generated via volume. Mr. Kovacs, he of the forked tongue, is determined to force a wrong-headed tax strategy down the throats of the EU, a move that would be devastating for Ireland's economy.

On the other hand, eliminating the tax haven could be of benefit to the United States. If there's no profit motive in operating out of Ireland, the corporations will bring their profits home if US tax rates are lower than what will be the norm in the EU. The Internal Revenue Service might, even now, be working behind the scenes to encourage EU members to sing in perfect harmony.

My friend Margaret is forever saying that it never lasts, the boom times. The European Union is determined to turn her pessimism into dogma.