Sir, – It amazes me that some readers and politicians cannot grasp how a low corporation tax is beneficial for the host country. Do people not realise how much money these companies contribute to total tax collections, both through the corporation tax paid, as well as income tax on all their employees, as well as the income tax collected by individuals who are hired as an indirect result of the specific company operating in the host country?
Not only do the Irish people benefit from this tax collected, but the public benefits by having opportunities to work and learn with these companies, giving employment to high-skilled workers after they graduate from university. The reality is that if the corporation tax rate were increased, and these companies were to move from Ireland, then not only would there be a huge hole in the amount of tax collected by the government, but many more skilled people would have to leave Ireland to find employment.
Hong Kong has one of the lowest tax rates in the world, and it consistently runs a budget surplus, although not having a welfare state certainly helps the Hong Kong government as well.
It is a basic economic fact, but one which seems totally lost on most people, that if a government wishes to increase tax revenue, it needs to lower the tax rate. – Yours, etc,
DERMOT COOPER,
Causeway Bay, Hong Kong.