Negotiations over the inevitable bailout of Ireland have apparently been held up because Brian "Biffo"* Cowen's government is insisting that it wants to retain its rock-bottom 12.5% corporate tax rate. Well, you can't really blame them, can you? I mean, it's obviously worked brilliantly so far, hasn't it?
These days, footloose corporations are entirely shameless about blackmailing and threatening countries that won't do exactly what they want. Already a gang of US multinationals is warning Ireland that they will reconsider their position in Ireland if the government has the temerity to hike the corporate tax rate. Nothing like fair-weather friends, is there?
The aggressiveness of the multinationals and the spinelessness of national governments has created a sort of fiscal race to the bottom. Ireland appears to have won the race, and it's not a pretty sight. But it's probably too much to hope that bigger and less indebted countries might take the hint and start standing up to the bullies.
* BIFFO = BIg Ignorant er, Fellow From Offaly. Best political nickname ever??
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