Trump likes to complain about "unfair" competition against US businesses whereas the reality is than many US corporates have had more or less a free ride throughout the rest of the world. If he really does start a serious trade war I could see US multi-nationals being by far the biggest losers. - but that's another story.

From an Irish perspective, the EU getting more actively involved in corporate taxation is nothing less than a national disaster - some say a greater risk than Brexit - because Ireland's economic success has been largely predicated on attracting almost every major tech country to set up their EU and sometimes their EMEA headquarters here. This has created many high quality jobs here and not inconsiderable corporate tax revenues even if they are only a v. small % of total corporate earnings throughout much of the rest of the world.

It is easy to criticise such "tax competition" and it certainly has a very damaging effect on EU tax revenues as a whole.  But it is also probably the only basis on which smaller, peripheral EU countries can compete with the big central economies for direct foreign investment. Otherwise you would have expected these companies to have set up their EU headquarters in Germany/France/Benelux/UK instead.

So until and unless the EU comes up with Keynesian redistributive policies and regional policies which overcome the structural disadvantages which smaller peripheral economies face, it seems understandable that Ireland and smaller peripheral economies should make common cause against such a big country power grab disguised as EU common sense. Given that current neo-liberal economic orthodoxies frown on government interventions on the scale required to rebalance the EU (and EZ especially), to provide an even playing field for peripheral countries, I can understand why national corporate taxation policies have evolved to fulfil that role instead.

It would probably be a lot more economically efficient to have one EU wide common taxation system with much of the revenue used to rebalance economic development between the regions. But that would be politically impossible because it would be portrayed as German taxpayers subsidising feckless Greeks. So we have what we have, and from the Irish government's point of view, it is working very well, even if it is recognised that it probably can't go on for much longer, and the more players join the game, the less successful the strategy will be.

Index of Frank's Diaries