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Ok, you tell me. Why do you believe low corporate taxes are the cause of Ireland's problems?

Before making your argument, keep in mind that 12.5% of something > 33% of nothing.



I have a very hard time understanding how you translate my line of thought:

low tax rate->more multinationals->higher debt for local business and government->higher tax rate->less multinationals->social catastrophe

into your line of thought:

low tax rate->more multinationals->property bubble->"current problems"

what are "current problems" you identify in Ireland anyway?

all I was saying is that low tax rate is not sustainable with level of public and private debts in Ireland. Do you agree or disagree?

of course property bubble is connected to presence of many multinationals in a way, but I wouldn't nor did I identify it with this primarily.

Property bubble was global as you might know. So why does Ireland have such large problems when compared to other countries?


I originally thought you were implying that low tax rates to lure in business was the cause of debt:

rmc: "In Ireland, these kinds of tax breaks are one of the foundations of our economy."

You: "And that's the reason Ireland has something like 1000% external debt to GDP"

I pointed out that a property bubble was the primary cause, and that low tax rates are unrelated to this. Lets put aside your original argument, and focus on the new one. You assert "more multinationals->higher debt for local business and government". Could you explain this step?

As for why Ireland was hurt more than others, their bubble was bigger:

http://en.wikipedia.org/wiki/File:Ireland_house_prices.png

http://upload.wikimedia.org/wikipedia/en/c/c1/Median_and_Ave...


Oh well. But WHY was the bubble bigger in Ireland? Do Irishmen need some kind of bigger houses and more of them than the rest of the world?

Anyway, we keep going and going in circles. Let's stop. The whole story (including why more debt) is very well described here: http://en.wikipedia.org/wiki/Celtic_Tiger

More on that later I guess.

Let me just add that it would be very simplistic to attribute "current problems" just to the property bubble, or high debts to just low tax rate for multinationals. So to make it clear, that's not how I think.




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