Ireland’s corporate tax receipts have skyrocketed since the beginning of the pandemic. In 2021, their receipts were up 30%. The following year saw an additional increase of 48%.
Major companies like Alphabet, Meta, Intel, Linkedin, and Amazon have invaded the tiny island nation. With only 5 million inhabitants, this has lowered unemployment, bolstered the economy, and created a housing crisis given the legions of new workers who need a place to live.
Why? Ireland’s corporate income tax rate is only 12.5%.
This favored tax rate has increased Ireland’s tax revenues to a surplus of 6.3% of its entire national budget. In 2022, that surplus amounted to 8B Euros. Economists are predicting that it will become 65B Euros in 2026.
This largess has been used to pay off debt and strengthen the nation’s pension system. Their Finance Minister is also proposing a “longer-term savings vehicle to which windfall receipts could be channeled.”
Wouldn’t it be great if we had these sorts of problems?
Let me leave you with this.
The Tax Cuts and Jobs Act of 2017 (TCJA) took a lot of heat when it passed. Many said that it would bankrupt the Federal Government.
But by lowering tax rates it did the exact opposite. In 2021, government revenues rose by 18%, the largest increase we’ve had since 1977.
The new administration’s budget would put an end to that. Their tax proposal includes…
1 – An increase in the corporate tax rate from 21% to 28%.
2 – An Increase in the Cap Gains Rate.
3 – Elimination of the Step-Up In Basis Rules for estate taxes.
4 – Elimination of the 1031 Exchange.
5 – And an increase in the Net Investment Income Tax.
We can only hope that our elected officials will learn from the example of a tiny island nation that doesn’t even have the population of the Chicagoland Area.
Lower taxes mean higher tax revenues. It doesn’t get any simpler than that.
We’re all going to get through this. Let’s get through it together.
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