We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
Updated at 9.55pm
THE GROUP THAT represents Irish business said that plans by the US to slash corporate rates to 15% could pose a “competitive challenge to Ireland”.
Ibec said that the announcement was just one in “a long line of challenges that Ireland’s economic model has faced in recent years”.
“We have come through previous challenges stronger than ever and we must use every opportunity to champion internationally the depth, diversity and development of the Irish business model,” said Ibec’s director of policy and public affairs, Fergal O’Brien.
O’Brien said there would be a “plenty of obstacles to overcome” for the proposed US tax rate cut to come into force.
He said that plans that were previously mentioned around the mooted Border Adjustment Tax (BAT) would have been the most worrying aspect of any potential US tax reform plan for Ireland.
But it “now looks likely that this proposal will not proceed”.
The Trump administration earlier pledged to slash corporate rates to 15% as it prepared to unveil a long-awaited reform it touts as the “biggest tax cut” in US history.
But the plan could face stiff opposition in Congress, including from some Republicans, with lawmakers sharply divided over the prospect of fueling already-rising deficits.
“This is going to be the biggest tax cut and the largest tax reform in the history of our country,” Treasury Secretary Steven Mnuchin said at a discussion about the proposal.
Ireland’s corporate tax rate is 12.5% on trading income and 25% on non-trading income (eg rental income or investment income).
Slashing taxes on income and business was a key part of Donald Trump’s election platform, and the Republican billionaire is seeking to deliver on that pledge as his presidency nears the symbolic 100-day mark this weekend.
Mnuchin will outline details of the plan at the White House later Wednesday, but confirmed press reports that “the business tax is going to be 15%.”
He said the administration hopes to push the reform through the Republican-controlled Congress as quickly as possible, but declined to set a deadline.
Trump had initially hoped to drive through tax reform before the summer, but that ambition evaporated amid a failed push to repeal Barack Obama’s signature health care law.
“We’re working hard to get it done quickly,” Mnuchin said. “This is part of his big impact for the first 100 days.”
“We have fundamental agreement on what we’re trying to do and the details of tax reform are still to be worked out.”
The tax plan’s impact on the deficit and debt will be key to winning backing on Capitol Hill.
House Speaker Paul Ryan hailed the reform, even though Mnuchin signalled it would not include a tax on imports, something Ryan had lobbied for among fellow Republicans.
The party had been drafting plans for the so-called border adjustment tax for months.
Nevertheless Ryan praised the new plan as “progress.”
“It’s basically along exactly the same lines that we want to go,” he told reporters.
‘Explode the deficit’
The overhaul is likely to face stiff opposition from Democrats.
“I can tell you this: If the president’s plan is to give a massive tax break to the very wealthy in this country, a plan that will mostly benefit people and businesses like President Trump’s, that won’t pass muster with we Democrats,” Minority Leader Chuck Schumer said on the Senate floor.
He also warned that a plan that dramatically shrinks tax revenues would “explode the deficit.”
Analysts have said cutting the top marginal corporate tax rate by 20 percentage points could add a whopping $2 trillion or more to the deficit over a decade.
The administration has said its tax cuts will spur growth — its goal is 3%– thus bringing in tax revenues to make up the difference, a calculation known as “dynamic scoring” which the Trump administration supports.
“The difference between 1.6% , 1.8% GDP and 3% is staggering,” Mnuchin said. “It’s trillions of dollars of revenues. It’s tons of jobs.”
Economists say this growth effect is not supported by evidence from prior tax cut efforts.
Wishful thinking?
Douglas Holtz-Eakin, an economist and former head of the non-partisan Congressional Budget Office who served in previous Republican administrations, said dynamic scoring is wishful thinking.
“There has never been any single credible analysis of dynamic scoring that suggests that taxes pay for themselves,” Holtz-Eakin told AFP.
The tax cuts could be limited to a 10-year period, but Mnuchin said that would be less than ideal.
“If we have them for 10 years, that is better than nothing,” he said. “But we’d like to have permanency to it.”
Mnuchin said the lower corporate rate is aimed at helping small businesses, not the wealthy.
“What this is not going to be is a loophole to let rich people who should be paying higher rates pay 15%,” he said at today’s event, hosted by The Hill newspaper.
Mnuchin also said the administration plans to simplify the highly complex process by which Americans declare their income and pay taxes.
“For most Americans, we think they should be able to do their taxes on a large postcard.”
With reporting from Cormac Fitzgerald
To embed this post, copy the code below on your site
So ireland is importing millions of tonnes of soy to feed to cows to export 85% of beef and dairy produced abroad while being an overall net importer of calories and barely growing any of our own fruit and veg. Sounds a bit precarious.
@eoin fitzpatrick: zero linked up thinking.
@eoin fitzpatrick: Not true, I grew a few apples and had a great crop of rushes this year.
@eoin fitzpatrick: Lol! beautifully put. All so a handful of people can earn more profits.
What would happen to Irish milk production if all this imported feed wasn’t available?
If one was to believe the hype it’s all based on our “grass based system “. ….but grass alone won’t provide the nutrients that Irish cows need to produce the large volumes of milk the dairy industry requires …..this article highlights the shallowness behind the “grass based system” propaganda that the Irish public consistently hear from the dairy industry in this country…
@Padraig G: It is grass based as you call it. The bulk of what cattle eat is grass, be it fresh during the summer or preserved during the winter. But dried and fermented grass (hay and silage) during the winter does not provide everything. This is when animal feeds are used. After all, milk production runs 12 months a year, and proper fresh grass is only available for half that.
@Padraig G: BTW, I forgot to say, Maize and Barley, along with all the other cereals, are types of grass.
@Joe x: thanks for your feedback but most dairy farms I visit provide meal to their cows 12 months of the year….but your missing the point of the article, Ireland’s high intensity dairy model is totally reliant on overseas animal feed….there is no way the average dairy farm in Ireland could sustain the level of milk production we have at present on grass alone …Look at the wet summer we just had , plenty of farmers were providing meal rations to keep milk yields up ….
@Padraig G: But most of the animal feeds are grass based, which is what you were contending in the first place.
To me, the point of the article has nothing to do with what the animals are being fed anyway. By highlighting it in the title and being the first section they discussed, they turned it into a climate issue when nothing is further from the truth, especially when you look at how it is transported, as much as they can fit on one ship.
The real issue is why the farming sector has taken the route it did, which is simply down to cost. The dairy and beef sectors find it cheaper, and the tillage farmers can’t let it go any cheaper. Otherwise, none of them can make a living in modern Ireland
@Padraig G: We’re not meant to drink calves milk, we don’t have 4 stomachs.
I wonder if there is any mention in the article of the restrictions placed on beef farmers. An animal has to killed before it is 24 months otherwise there are big penalties. The beef barron and the factories have access to all the farmer data. The know how many animals are in the country and what age they are. Now if you want to have a beef animal factory fit for 24 months you have to feed grains. There is no alternative and yet farmers want the 24 month rule lifted and its not. It was bought in during the BSE scare back in the 2000s. The rule makes the factories richer and bad for the environment because we have to import feed. What is the difference between 24month and 34 month beef. There is no difference. Beef in Ireland is a monopoly. The same animal in the UK makes €400 per head more than in Ireland. Our farmers are being robbed by the processors and the only profitable sector left is milk.
@Washpenrebel: my point is that its not financially possible to finish our beef of just a grass based diet because the rules in place. Man made rules that are worse for the environment.
Funny how the first thing they concentrated on was the carbon footprint of importing the feed instead of asking why so much is being imported and not grown locally. Stating that it could be grown at home is stating the obvious, after all cereals have been grown on this island for hundreds, if not thousands, of years. The problem is cost for both dairy farmers to buy it local as it is cheaper to buy it in, so that they can have a living wage and tillage farmers to sell it local as animal feed as they cannot afford to sell it any cheaper, otherwise they will not have a living wage either. It’s the cost of things in this country that affect everything else as usual. .
Give the farmers a break and treat them as if they were Data centers or even better the Aviation industry whose emissions are also overlooked as they are not considered in our national emissions targets.
Great article and FOI providing a great service to inform the public to make their choices. Our dairy cows are fed too much imported meal despite not yielding very much. Denmark produces 2/3 as much milk with 0.5m cows as we do with 1.7m cows. The answer is obvious.
@john mounsey: do you know that Ireland is one of if not the best place for milk in the world. We have some of the toughest restrictions in place which is why we produce a huge amount of the world’s baby milk. Grass is key to top quality milk and we grow grass better than anywhere else in the world. Its something we should be proud of but we have a group of people that love hammering farmers who work on average 14 to 18 hours a day.
@Washpenrebel: Our infant formula exports are dropping, was 620m euros to China in 2017, dropped to 266m last year. Hence poor milk proce for dairy farmers here.
@john mounsey: Dairy farmers all over the world are suffering because of the prices. There are many farmers in the leaving because its not paying enough. Same in Australia. Governments all over the world are making it harder for farmers and there will be a food shortage in the future. This is guaranteed. We live in the age of the internet and we can see what’s happening in other countries
@Washpenrebel: Its not the ‘player’ it’s the game.
Humanity, for what it is worth, is foolish in a particular way.
Climate is far too technical for most people, so retreating to the Earth science of biology is perhaps the best course to undo considerable damage to research by scientific method modelling.
Origin of Species attempted to use prejudice as a means to control perspectives of humans and who constitutes the title of superior and inferior ‘races’.
Just like carbon footprint, carbon emissions or some other buzzwords, natural selection/eugenics was once a major topic in society and found its full implementation in WWII as the Holocaust.
People are so distracted with the symptoms of modelling that they hardly are aware that scientific method modelling is the only issue.
So people with stature to deal with a serious topic just do not exist, and that is no insult but stated with deep dismay.
People want to consume dairy products and Ireland is one of the most climate friendly countries in the world to do this.
It is nonsense to say by supposed academic leaders that we should participate in solving this global problem by exporting dairy production to much less climate efficient countries.
The media climate B/S never ends,
Lovely emissions heavy feed, the best kind of feed
have your say