[bawolff]

> Why should Ireland undermine 13% of it's GDP

Undercutting other countries on tax policy tends to piss them off. So it comes down to whether the benefits of the policy outweigh the blowback.

The 13% of GDP figure can be a bit misleading as GDP from being a tax haven tends to help the average irish citizen a lot less than more traditional ecconomic activity.

[alephnerd]

> The 13% of GDP figure can be a bit misleading as GDP from being a tax haven tends to help the average irish citizen a lot less than more traditional ecconomic activity

As I pointed out, if Ireland didn't adopt it's tech FDI policy which it did in the 1990s, it would be a much poorer country today.

Going from Libyan, Soviet, and Greek to Finland level living standards in 30 years was not guaranteed, and it was Ireland's business friendly policies is what ensured it became a tech hub today and didn't fall into the middle income trap - especially in 2008-12 when Ireland was also in the midst of a Greece style economic meltdown (remember the PIGS?)

Ireland was a developing country in the 1990s, and if they executed better than then much richer Western European states like Germany, France, the UK, and Canada then so be it.

> GDP from being a tax haven tends to help the average irish citizen a lot less than more traditional ecconomic activity.

I've been using HDI which isn't severely impacted by GDP per capita.

And even then, Ireland's median household income [0] is now significantly higher than the UK [1] despite living standard in the UK having been significantly higher than Ireland's until the 2010s because of Ireland's FDI policy.

> Undercutting other countries on tax policy tends to piss them off

Other EU member states such as Poland and Czechia also match Ireland's incentives when asked, which has helped both Czechia and Poland now catch up to historically richer France, Italy, and the UK.

[0] - https://www.cso.ie/en/releasesandpublications/ep/p-silc/surv...

[1] - https://www.ons.gov.uk/peoplepopulationandcommunity/personal...

[bawolff]

> As I pointed out, if Ireland didn't adopt it's tech FDI policy which it did in the 1990s, it would be a much poorer country today.

Perhaps, but if you want to measure the effect it had on ordinary Irish people you should be using GNI not GDP. I'm not saying it had no effect, just that GDP is a misleading measure.

[alephnerd]

Hence who I used both HDI and median household income.

And even with GNI my argument still holds. I'm surprised how so many HNers don't remember how poor Ireland used to be until 20-30 years ago, especially given how most HNers are in their 30s to 40s.

Ireland, South Korea, and Israel are the poster children of developing countries that successfully escaping the middle income trap and climbing up the economic value chain back in the 2010s.

[anubistheta]

eh, other countries can improve their offering. It's a good thing. We punish companies when they collude to keep salaries low. So too should countries compete with attractive tax packages.

[psd1]

> We punish companies when they collude to keep salaries low

No we fucking don't. I have no idea how you reached that position in the uber era.

[fragmede]

https://www.justice.gov/atr/usdoj-antitrust-division-us-v-ad...

[psd1]

Ah ok, it has actually happened. Although that case was actually about a commission not to actively poach from each other. I also think that $75m to a tech giant is not much of a punishment.

I don't have a list of material evidence, so i don't expect to convince anyone else. Appreciate the reply.

[bawolff]

> eh, other countries can improve their offering.

Or they could use coercive measures to punish the countries undercutting them. There is no world police after all to prevent them.

A big reason why capitalism works is 2 factors: its easy to start competitors and established players are not allowed to shoot up and coming companies. Neither apply to countries.

I'm not arguing about whether its a good thing or not, just that it is the way the world works. Whether or not Ireland's policies are a good idea depends on how much value they capture vs how much value they lose due to their consequences, chief among them being the strain such policies can put on foreign relations & trade.