Donald Trump's peculiar take on Irish taxes

The US President praised Ireland while issuing another foreign direct investment warning in an interview with The Economist...

US President Donald Trump sat down with the editors of The Economist last week to talk Trumponomics, renegotiating NAFTA, Obamacare and more.

Speaking about his plans to slash US taxes for businesses, his attention also turned to Ireland as he praised how the Government handled the financial crisis whilst simultaneously warning that multinationals based here will be enticed back to American shores. 

His understanding of exactly what Ireland did to navigate through the choppy waters of the recession has been called into question, however, as he claimed incorrectly that the country never raised taxes. 

"You look at Ireland," he said. "I own great property in Ireland that I bought during their downturn. And I give the Irish a lot, a lot of credit. They never raised their taxes.

"You know you would have thought when they were going through that really…they would’ve double and tripled their taxes.

"They never raised it a penny. And they got through it and they are thriving now. Ireland’s done an amazing job. A lot of companies have moved to Ireland and they like it."

As The Irish Times' Cliff Taylor has pointed out, some €11.5 billion in annual tax increases were introduced in the years between 2008 and 2015.

The top rate of VAT was increased and the universal social charge (USC) and a residential property tax were introduced, along with a number of other hikes and widening of tax bands.

It is possible Trump was referring solely to corporation tax, which has remained steady at 12.5% and which he is looking to take cues from to make his own country more competitive when it comes to attracting big business.

On that subject, he reiterated his intentions to bring US multinationals currently based in Ireland back home:

 

"We’re going to be getting a lot of companies moving back and we’re going to get very few companies leaving the United States because we went from the highest tax rate of… not only major, you know they always say major countries, just about the highest tax rate period.

"And then when you add all the other things. And then when you add the regulations to the tax…

"I’ve had people tell me, because I’ve cut massive regulations and we’ve just started, believe me. But we’ve cut regulations massively."

Last month, Trump proposed cutting the top rate on pass-through businesses from 39.6% to 15%. He also wants the income tax rate paid by public corporations to be reduced from 35% to 15% and to allow multinationals to bring in overseas profits at a rate of 10%, rather than the current 35% rate.

US companies directly employ over 140,000 people in Ireland.