Before Bankruptcy, Conservatives Touted Ireland As Model For U.S.

[ProSense]

Before Bankruptcy, Conservatives Touted Ireland As Model For U.S.

During the 2008 Presidential campaign, Sen. John McCain (R-AZ) praised the Irish economy for its low corporate tax rate and said that if the U.S. would just follow suit, companies would “be able to create jobs, increase your business, make more investment.” And McCain was far from the only conservative making the “Celtic Tiger” argument that Ireland’s low tax rates were a shining, successful model of conservatism in action. Some examples:

– Dan Mitchell (then of the Heritage Foundation, now at The Cato Institute), July 2002:

Ireland already has shown that tax cuts are a recipe for prosperity. Thanks to Reagan-style tax-rate reductions, including a corporate income tax rate of just 10 percent, Ireland has become the “Celtic Tiger” and is now the European Union’s second richest country.

– Sean Dorgan, The Heritage Foundation, June 2006:

While economic success over the past 15 years can be ascribed to a range of domestic and international factors, it was not a fluke. Ireland has long had, and intends to sustain, low tax rates to attract investment. Its current 12.5 percent corporate tax rate evolved from the zero rate on export sales in the 1950s and the 10 percent rate on manufacturing and some internationally traded services introduced in 1980.

– Chris Edwards, The Cato Institute, March 2007:

However, the key to Ireland’s success has been its excellent tax climate for business. In 1980, Ireland established a corporate tax rate for manufacturing of just ten percent. That low rate was subsequently extended to high-technology, financial services, and other industries. More recently, Ireland established a flat 12.5 percent tax rate on all corporations — one of the lowest rates in the world, and just one-third of the U.S. rate. Low business tax rates have helped Ireland attract huge inflows of foreign investment.

– Jurgen Reinhoudt, American Enterprise Institute, October 2007:

The real credit belongs to Irish fiscal policy. Beginning in the late 1980s, successive Irish governments pursued vital spending cuts and tax relief…At present, Ireland has a 12.5 percent corporate tax rate, which has made it a magnet for powerhouse firms.

– Former Gov. Mitt Romney (R-MA), FOX News, January 2008:

MITT ROMNEY: Well, you know, the — the experience of other countries in the world is some guide. You take a nation like Ireland, for instance. They cut their tax rate. I believe it’s less than half of the tax rate in most of the other European nations. And they have become — well, they have moved from a basket-case economy to a booming economy. Jobs have been flowing into Ireland.

– Sen. John McCain (R-AZ) and Sean Hannity, FOX News, October 2008:

MCCAIN: No. But you know what, Sean? You’re going to go on my first overseas trip. And I think it might be to Ireland.

HANNITY: Listen, you were right about their tax rates. They did lower tax rates on businesses and it’s been a big economic boom for them.

But now that Ireland’s economy has crashed down around it, those on the right are claiming that Ireland’s woes are due to big government run amok. As Jonathan Chait mocked, “Sadly, the Irish fiscal crisis has prompted a quick realization that Ireland was not actually the free market state we thought it was”:

<…>

Though far from being the sole cause of Ireland’s economic calamity, its very low-tax environment turned it into a favorite tax haven and led to an influx of “business” that wasn’t really business at all: it was just companies like Google shuffling paper through Ireland to dodge taxes.

Ireland then experienced the same housing bubble that plagued both the U.S. and mainland Europe, and its banks, the biggest of which were twice the size of the nation’s GDP, went bust. As Peter Boone and Simon Johnson wrote, “Simply put, the Irish miracle was a mirage driven by clever use of tax-haven rules and a huge credit boom that permitted real estate prices and construction to grow quickly before declining ever more rapidly.”

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[Pholus]

1. So every person forced to debate Pres Hopeful Romney should be able to say...

"Based on your opinions about Ireland, how can we believe you now."

Great catch! :)

[Raine1967]

2. K&R

They just never seem to be right on ANYTHING.

[The Backlash Cometh]

3. >snork

[Ratty]

4. Thanks! Bookmarking this for future reference

[Hosnon]

5. This should be pointed out over and over and over and over and over again.

But it probably won't be.

[golfguru]

6. Ireland - another country not prosperous from excessive debt

Debt for indulging in consumption is the surest way into bankruptcy.
Only debt which can be justified is for creating or expanding any productive activity
such as higher education, better skills training, starting or expanding a business,
building a apartment complex as a source of future revenue etc.

[ThoughtCriminal]

7. The cracks were showing a long time ago

But nobody in the GOP seemed to notice, and the media sure wasn't calling them out.