Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

We want to take this sacred cow out of Irish politics. The suffocating consensus on the question of this country's 12.5% rate of corporation tax has dominated the Irish political landscape to the extent that we cannot talk about touching it. It seems that we cannot possibly dream of increasing corporate taxes. I suggest that this terrible consensus has played a key role in spearheading the race to the bottom throughout Europe and across the globe regarding the amount of tax paid by super-wealthy corporations. I would add to the points made by Deputy Paul Murphy by arguing that the focus on low corporation tax rates is the single greatest contributory factor to global financial instability. The less tax these corporations pay, the more wealth is concentrated in the hands of a tiny number of entities that move their profits at a whim to places where they think they will pay the least amount of tax or make the biggest return on investing their money. The fact that corporations control so much money is making for a chronically unstable global economy. They literally hold governments hostage. They really hold us hostage. We have encouraged and facilitated that. In fact, we spearheaded the drive towards lower corporation tax rates and our lead has been followed by other countries.

I would like to add to the figures mentioned by Deputy Paul Murphy regarding our role in the race to the bottom. The average rate of corporation tax applied across Europe in 2004 was 27.2%. That figure has fallen to 18.3%. We have played a key role in encouraging other jurisdictions to adopt low-tax policies. Ireland has been the reference point for other countries when they have been deciding to cut their corporation tax rates. The cumulative effect of all of this has been to rob citizens across Europe and the world. It has even been a reference point for Mr. Trump in his race to reduce corporation tax in the United States. We have inspired him to do this. Any benefit we may think we have got from having a low corporation tax rate over a period of time is going to come to an end, even in its own terms, as others try to overtake us in the race to the bottom. Regardless of what one might have thought about this county's strategy previously, it is coming to an end. We are saying it is time to call it to a halt. We should impose a proper tax rate on these corporations while we can and get some money back while it is possible to do so. We should then use that money to invest in reconfiguring our entire economy and developing a proper and sustainable industrial base that will not be hostage to the whims and fluctuations of the global market and the giant multinationals.

I would like to make a point about the effective rate, to which I referred earlier. The Government keeps trying to maintain that our nominal rate of 12.5% or something close to it is the actual rate that is applied to corporate profits, but that is simply not true. The Government is telling fibs to the Irish public and this House when it restates that case. As I said earlier, in 2014 total gross pre-tax profits were €95 billion and other income was an additional €8 billion. This gave us a grand total of €103 billion in pre-tax profits, but just €4.9 billion was paid in tax. This equates to an effective rate of 4.75%.

Even if we imposed the 12.5% rate on pre-tax gross profits, we would get €9.2 billion or an additional €4 billion per year. Imagine the difference that would make and how much extra money we would have for the housing programme we need, the chronically underfunded health service, our education system and all the public services and infrastructure deficits that we have. That €4 billion would make a world of difference to the lives of our citizens and the health and sustainability of our economy.

It is a matter of urgency, if the economy is to be sustained for the citizens in years ahead, for us to move in a radically new and different direction in terms of corporate tax. That is the thinking and logic behind the amendment.

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