And you've never answered why Ireland boomed if it were not for their tax cuts[/B].
which has been asked on a few poats in this thread: and a few posts earlier:
So please enlighten us on what it was that changed in Ireland other than tax rates to account for their boom.
Beginning in the early 1990’s, unprecedented economic growth saw the level of Irish real GDP double in size over the course of a little more than a decade. There have been many reasons advanced for Ireland’s success over this period, including EU membership and access to the Single Market; Ireland’s low corporation tax rate and a large multinational presence; a high proportion of the population of working age; increased participation in the labour market especially by females; a reversal of the trend of emigration toward immigration; sustained investment in education and training; co-ordinated social partnership agreements and a more stable public finance position.
Irish Economy
Note that he answered his own burning question with his own reference. : a high proportion of the population of working age; increased participation in the labour market especially by females; a reversal of the trend of emigration toward immigration; sustained investment in education and training; co-ordinated social partnership agreements. This group of reasons taken as a partial or complete group could have contributed or completely caused the Irish boom. Possibly, the boom would have never occured without the referenced demographics or emphasis on education and training.
Of course, one instance (A boom resulting from Irish corporate tax rate deduction), as I posted earlier, proves nothing. So he responded with 3 or 4 more UNSUBSTANTIATED examples, without references, expecting me to verify his statement to prove his point. This thread's premise that Irelands boom "proves" that corporate tax cuts, will expand an economy is substantially unproven. If, Ireland were the
only country in the world whose economy boomed due to tax cuts, as 1936 Germany was the
only country in the world to leave the depression by massive application of Keynesian principals and the
only country in the world to apply Keynesian principals, fortifying Keynes theory, then some credence could be given to the premise of this thread.
Note that the argument that we had a boom under Clinton with increased tax rates only proves that. It doesn't disprove the possibility that lowering corporate taxes may produce a boom. As argued by others in this thread, and with which I completely agree, economics is an extremely complex environment in which to "prove" a hypothesis, and policies can have different effects at different times when combined with the other current occuring economic events.
It is my opinion that for the next few years corporate taxes should be increased, loopholes and accounting caused tax reductions such as tax loss carry forward should temporarily be eliminated to cause a reduction in corporate profits. Simultaneously, companies should be offerred tax credits to pay for increasing US production capacity, say up to 10% to 20%. Companies will have to respond because their competition will and the competition will take market share in the next expansion if the companies don't take advantage of the tax credit. This results in a smaller increase (or possibly decrease) in national debt (since taxes were increased), immediate increase in employment, and price stability since companies currently have excess capacity to meet an immediate demand surge while production expansion will hold down future prices since presently started production expansion will increase future supply. This is explained in much greater detail, where each premise is built upon historical economic events, data, and references, at my website which I shamelessly promote.
Reduce Unemployment with Little Price Increase
