The president received more than $250 million (£200m) in gifts from his Tesla boss Elon Musk, while Silicon Valley giants from Google to Amazon gave millions to Trump’s graduation fund.
The returning president isn’t the only world leader enjoying a slew of US tech companies: Ireland’s government is flush with cash thanks to taxes paid by US businesses in the country.
Now Ireland’s economic miracle is at stake. Trump has noticed that America’s fortunes are raining down on the Celtic island – and he wants to bring them back home.
Dublin’s strategy of offering an attractive corporate tax system – headline rate: 12.5pc, first announced in 1997 – and providing incentives for investment has been remarkably successful.
Tax receipts have soared, with corporate tax set to reach €24bn (£20bn) by 2023 – more than double the €10.4bn collected five years ago and more than five times the €4.3bn levied in 2013.
Drawn by its favorable tax regime, Ireland has become a European haven for Silicon Valley’s biggest names. Apple, Google, Facebook owner Meta and Microsoft all have top-grossing Irish operations. Apple is thought to be the country’s biggest taxpayer – its Irish arm generates more than €200bn a year.
Tech taxes help pay for government spending, which has risen by an average of 6.5pc over the past decade, according to the Irish Fiscal Advisory Council.
Despite the spending, the Irish budget is in a strong surplus. Combined with increasing economic growth, the national debt is declining. From more than 100pc of the size of the economy a decade ago, net debt has halved.
Taxes are slightly more than 47 percent as a share of the economy. However, excluding foreign business profits – the tax paid by international businesses on activities outside Ireland – the burden on the domestic economy is 37.8pc, the lowest level since 1980. It is in stark contrast to Britain, where the tax burden is high. It has reached its highest level since World War II.
Apple cited its experience in Ireland as a prime example of the kind of behavior it wants to avoid.
“They make the parts in China, they put the parts together in Taiwan, then they wave their magic and they float over to Ireland — of course they float over to Ireland because that’s where Apple makes its parts — and it comes to America. Make about 3pc profit in America,” he told Bloomberg TV. He said in an interview.
Traditionally, much of the appeal of an Irish base is the company’s ability to house its intellectual property in Ireland. Technology companies make the largest share of their global sales and profits for that IP and therefore pay a 12.5pc fee instead of the higher tax in the country where the sale takes place.
Lutnick fumes: “In America they pay corporate tax on 3pc of profits and Ireland declares a huge budget surplus for their 5m people. Hahaha. It’s just not true.
“The idea is to get them to pay their taxes in America. This is how you fix America. You will do justice and build here.
As far as Lutnick is concerned, Irish citizens are enjoying unfairly low taxes and high spending. Money taken from American companies – Money must go to Washington.
Trump has wasted no time on tax targets since taking office. Trump immediately pulled the US out of the international tax treaty, which was negotiated by former Joe Biden and the European Union, to introduce the lowest global corporate tax rate of 15%. The deal would force Ireland to collect additional taxes from US companies that declare the world’s minimum tax rate of 15 percent from next year, putting Dublin at loggerheads with Washington.
And Trump went on to order an investigation into “whether any foreign country is subjecting United States citizens or corporations to discriminatory or extraterritorial taxation.”
What exactly counts as a “discriminatory or extraterritorial tax” is not defined. What is clear is that a The risk of tax evasion on foreign individuals and companies If their home country is perceived to be unfairly paying for American interests overseas.
Michelle Martin, the new taoiseach, has tried to play down the concerns. “We are not naive about the realities of change, but at the same time the Irish-American relationship will benefit both of us and emerge stronger no matter what happens,” he said last week.
Chances are high. If Trump forces US companies to shift more of their profits to the US, the consequences could be very damaging to Ireland.
Without intervention, the country is on track to become debt-free by 2040, according to Ireland’s Fiscal Advisory Council. But if the tax hike ends and the government tries to accelerate spending, the debt could return to 100 percent of GDP within 15 years.
More than a third of Ireland’s corporate tax receipts come from three companies, so it wouldn’t take much of a change in business strategy or US policy to make a hole in the national finances.
Last month, the Central Bank of Ireland warned that “reliance on high corporation tax receipts, mainly linked to the activities of US enterprises, has emerged in recent years”. .
It’s not just tax revenue that’s at risk, jobs could go too.
Apple has been based in Cork for decades and employs 6,000 people in Ireland. Microsoft has 3,500 employees – not all of them in the Republic, as it has offices in Belfast and Dublin. Google has 5,000 in Ireland..
It’s not just technology companies. Low taxes and high research and development incentives have helped stimulate major pharmaceutical industries.
US giant Pfizer has 5,000 employees in Ireland, for example in manufacturing and research and development. Ireland By 2023, it exported €77bn of pharmaceuticals and medical supplies.
The importance of this “real economy” activity may make it seem difficult for Trump to drag those revenues into America.
However, it is shaped by trying to shape the economies of other countries. Witness his efforts to crack down on China during his first term, which sent manufacturers fleeing to countries like Vietnam.
Companies can respond. Factories, workers and intellectual property have moved west since Trump became president.
During his first term, the president offered an estimated $2 trillion in amnesty to offshore companies, allowing them to bring the money home at tax rates as low as 35 percent.
In Dublin, ministers are watching closely to see exactly what Trump will do. Whatever the details, you know that Ireland’s economic model is under siege.
Martin told the Irish Parliament last week: “The task is to maintain Ireland’s strength in times of real threat, while also addressing critical social needs.”
“Ireland is a democratic country with an open economy – we cannot expect to stand idly by. We must preserve and renew an economic model that delivers high levels of employment and resources for public services.”
Apple was reached for comment.
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