Friday, March 16, 2007

Irish Miracle: Cut Taxes, Watch the Growth

From the Cato Institute, Chris Edward's article about the Irish economy "It's Not Luck:"

"Ireland has boomed in recent years, and it now boasts the fourth highest gross domestic product per capita in the world. In the mid-1980s, Ireland was a backwater with an average income level 30 percent below that of the European Union (MP: And a 16.5% jobless rate that was more than 6.5% above the EU average, see my graph above!). Today, Irish incomes are 40 percent above the EU average."

How did that happen?

"The key to Ireland's success has been its excellent tax climate for business. In 1980, Ireland established a corporate tax rate for manufacturing of just 10 percent. That low rate was subsequently extended to high-technology, financial services, and other industries. More recently, Ireland established a flat 12.5 percent tax rate on all corporations -- one of the lowest rates in the world, and just one-third of the U.S. rate."

Happy St. Patrick's Day!!

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