Corporate tax rates in my former home, Ireland, are among the lowest in the European Union (EU). That fact, along with decades of massive EU spending to subsidize infrastructure, and a well-educated, English-speaking, hardworking workforce has been responsible for what has been dubbed "the Celtic Tiger," an Irish economic boom that began in the 1990's and is only just starting to stutter due to the global subprime meltdown.

The low tax-rate has induced many foreign companies, such as Google, to set up their European headquarters in Ireland. Unlike here in the US, however, corporations do pay taxes in Ireland: the absolute lowest corporate tax rate is 10%, and I'm not sure any companies even qualify for that rate since 2005. The "Standard Rate on Trading Income" is 12.5%, while the rate on " Investment/Rental Income" is 25%.

In America, a recent Government Accountability Office report just confirmed what many of us have known for some time: while the US is facing a projected $410 billion budget deficit, more than half the corporations doing business in the US to the tune of trillions of dollars of income per year, are not paying a single penny in income taxes.

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WASHINGTON (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.
During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

Tell me, please- why are corporations allowed to benefit from our infrastructure, our highly educated, mobile workforce who labors more hours than the workforces of most modern industrial nations, and our consumer markets without contributing a penny to their maintenance and upkeep?!

In Ireland, individual income tax rates are high by American standards. In 2007, the standard income tax rate for a single person was 20% on the first €34000 of taxable income (roughly $50,000 at current exchange rates), then a whopping 41% on any income above that. Rent, medical bills, and other expenses were deductible which reduces the actual tax-rate.

Over and above income taxes, Ireland also has a "Value Added Tax," or "VAT," which ranges from 0% on books, children's clothing and educational services, to a shocking 21% on the majority of goods. It functions as a 21% sales tax, and like all sales taxes, disproportionately hurts low-income Irish folks.

You might think that given this tax situation, Irish people (like many Americans since the "Reagan Revolution") would consider "taxes" to be a dirty word. You might think that calling for higher taxes, especially on the rich, would be a sure road to political suicide.

You'd be wrong. I won't say that there aren't Irish people who do whatever they can--both legally and sometimes otherwise-- to avoid taxes. But most of the Irish people I know regard taxes as a necessary and integral ingredient of a functioning society. Perhaps their equanimity stems in part from the fact that, rather than going to finance a bloated military (which in America gobbles up 54% of all income tax revenue) , their taxes fund government expenditures like universal free education (including university), free healthcare, old age pensions, unemployment benefits, and public capital expenditures.

Likewise, despite the relatively high taxes and an astronomical cost-of-living in Ireland, people are generally paid well enough to cover their bills and still put money into savings accounts. The minimum wage is €8.65/hour--roughly $12.76 by current exchange rates. Speaking for myself, I was able to get myself out of credit card debt while I was there--something I've been unable to achieve despite many years of trying here.

To illustrate just how deeply the different attitudes toward taxes run, consider that the State of California has now been operating without a budget for more than a month and a half, mostly due to Republican refusal to raise taxes. Even Governor Arnold Schwarzenegger's attempts to raise the state sales-tax-- a move I oppose as it hurts the poor while the rich skate--have met with no success in face of the intransigence of his own party.

Meanwhile, folks in Ireland are calling for even higher taxes on the rich, in order to achieve the government's goal of eradicating poverty by the year 2016.

High-earners should be taxed more to allow for a hike in welfare payments for low-income families, it was claimed today.

The Combat Poverty Agency said it would be calling on the Government to review tax-relief schemes, including mortgage and pension, in this year's budget.

Launching its annual report the body said the State must remain committed to eradicating poverty by 2016 despite the financial pressures caused by the economic downturn.

What a concept! Citizens who, out of a sense of shared responsibility and fairness, are willingly to contribute to fellow citizens' wellbeing and improvement.

Before Reagan's ridiculous "Trickle-down" economics, Americans believed that taxes were more than something to cut or evade. During the pre-Proposition-13 days in California, I was one of the state's working-class kids who benefited from one of the best public school systems in the nation. And let's not forget, President Johnson's War on Poverty. And before that, the WPA.

Of course, those were the days when corporations actually paid taxes in America. The days before "taxes" became a dirty word in the American lexicon.

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