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As far as I am aware the USA taxes US companies on their foreign earnings regardless of what "local" taxes they have paid in foreign markets like Ireland.  They can do this because they are the dominant imperial power and no major US corporation can afford to be shut out of the US market.

There is a logic to arguing that if you want to trade freely within a common market and political Union, then you should pay the same taxes regardless of where you are incorporated within that Union.

However, as my diary seeks to illustrate, you cannot make this case in the abstract - a lot of other taxes and supports operate at national levels and impact on corporate costs and location decisions.  Ireland has done a good job of "marketing" its low headline corporate tax rate to multinationals etc., but in practice Holland has just as low an effective corporate tax rate.

So my argument would be that we need to consider harmonising not just corporate tax rates, but VAT rates, and that local rates and services charged should reflect the actual cost and value of services rendered and not some arbitrary and capricious imposition as is often currently the case in Ireland.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 11th, 2011 at 08:01:39 AM EST
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