Thread by @tomaspueyo

Ireland's future is at stake.

This Friday, there is a an important OECD meeting to debate the global minimum corporate tax rate.

These are the stakes for Ireland:

Countries like the US want *at least* 15% global corporate tax.
A few months back, 130 countries reached an early agreement. A handful of others didn't join. At their head was Ireland. Why?

The richest (GDP per capita) country in Europe is *Ireland*. Richer than Germany, richer than Luxembourg, richer than Switzerland.

At 117% of US GDP per capita, Ireland is a whopping 31 percentage points richer than the next big European country, Netherlands, at 86% of US GDPpc

The only countries that are richer than the US per capita are Luxembourg and Switzerland. Not precisely known for their amazing design and manufacturing. They win because of taxes.

So what would happen if Ireland loses its edge?

It's not like Ireland was historically the most productive land in the world...

Attracting so many tech firms over the last 20 years surely improved its tech sector but... Do they really think they've become so productive that, without the tax rate advantage, they will retain this GDP per capita?

Or might it go down to the level of tech-savvy Sweden?
That would be a loss of 30% of Irish GDP...

Ireland doesn't only rely on their corporate tax rate of 12.5%. And raising the global minimum to 15% will not completely end Ireland's edge, so it won't lose 30% of its GDP. But it will surely go down.

The question is: how much GDP would Ireland lose with this corporate tax reduction?
Does their government know?
Is that analysis public?
Do the Irish people know?
Is it worth caving to the international pressure to avoid that GDP / capita reduction?

I talked about global tax games in this article
unchartedterritories.tomaspueyo.com/p/the-end-of-n…

And I go deep comparing GDP per capita across countries in yesterday's article:
unchartedterritories.tomaspueyo.com/p/us-gdp-per-c…

To be clear, I'm not advocating anything. I'm not saying Ireland or the rest of the world should do one thing or the other. I'm just highlighting the game theory of the stakes. The US needs Ireland because Ireland has veto power of an EU ratification.

Will they cave in?

Maybe Ireland doesn't care as much because most of that wealth has remained in the pockets of those who were attracted to Ireland because of taxes in the 1st place?

Either way, we will know more this Friday