Mr. Conor O'Brien:

There are a range of policy options. One possibility is to increase our corporation tax rate. Mr. Taft mentioned earlier that a low corporation tax rate imposes costs on households because the gap in tax revenue needs to be made up elsewhere. I would not disagree with that but it assumes that if the corporation tax rate is increased, the total tax yield to the Exchequer will be increased. That is not necessarily the case. At the very least that is a debatable proposition. If we increase our corporation tax rate and, as a consequence, some of the companies based here leave and go elsewhere, to Singapore, Switzerland or the UK, and we lose all that corporation tax revenue, as well as the PAYE and PRSI take on all their employees, the VAT on local spend, plus the increased welfare payments to those unemployed as a result. We may in fact deprive Irish households of income and increase the burden on them. There is a point at which one can increase the corporation tax rate - and one can debate what that point is - beyond which the resources available to households will decrease. That is a key point. We have increased the corporation tax that we charge on international business. It used to be 0% until the 1980s, then it was 10%, and now it is 12.5%. Meanwhile competitors have reduced theirs.