Tax C-C-C-C ….. Changes: NY Times Won’t ID Major Factor in Ireland’s Success

In an article (HT Jim Taranto at Best of the Web) describing Ireland’s emergence as an European Union powerhouse (”Entrepreneurship Takes Off in Ireland”), reporter James Flanigan of the New York Times simply could not bring himself to specifically identify one of the main reasons for the country’s success (bolds are mine):

Ireland is now alive with enthusiasm for entrepreneurs, who seemingly rank just below rock stars in popularity.

….. The relatively new emphasis on entrepreneurs in Ireland is the culmination of nearly four decades of government policies that have lifted the economy from centuries of poverty to modern prosperity.

The change began when Ireland entered the European Union in 1973. In subsequent years, the government rewrote its tax policies to attract foreign investment by American corporations, made all education free through the university level and changed tax rates and used direct equity investment to encourage Irish people to set up their own businesses.

“The change came in the 1990s,” said James Murphy, founder and managing director of Lifes2Good, a marketer of drugstore products for muscle aches, hair loss and other maladies. “Taxes and interest rates came down, and all of a sudden we believed in ourselves.”

So tax rates “changed,” eh? And we learn in the next paragraph that “taxes and interest rates came down,” as if by some external supernatural force.

Are you noticing a chronic case of word avoidance?

The reason taxes “came down,” of course, is that they were proactively C-U-T, cut (the word “cut” does not appear even once in the article).

Flanigan did eventually get to describing the cuts, but still managed to avoid the C-word:

Government help for Irish entrepreneurs grew out of an overall economic policy devised in 1987 that reduced personal taxes, said Kevin Sherry, a director of Enterprise Ireland who specializes in start-up companies.

Income tax rates in Ireland today are 20 percent on the first $50,000 of income and 41 percent on income above that. But there are value-added taxes of 21 percent levied on all goods and transactions, with the exception of health and medical services, children’s clothing and food.

The tax on corporate profits, though, is 12.5 percent, which is an incentive to own a business.

The Times’s C-word allergy is all the more maddening because, like so many other Old Media outlets, it doesn’t hesitate to describe reductions in projected spending increases in government programs as “cuts,” even though, virtually without exception, year-over-year dollars spent continue to increase. You would think that employing the three-letter C-word when a cut actually does occur — even a dreaded tax cut — wouldn’t be that difficult. But it clearly is.

Cross-posted at NewsBusters.org.

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UPDATE: Flanigan dates the beginning of the country’s economic surge to the country’s entry into the EU in 1973.

That’s not exactly the history found in Wikiland (bold is mine):

From 1973 to 1983, Ireland was hit by two oil crises, a series of bank strikes that paralysed business activity for 18 months, poor industrial relations, public pay rises, and runaway inflation. However, poor management of the state finances was being addressed with repeated increases in taxation of all beneficial activity, until employment became less attractive than welfare. At the same time it was found that Irish industry was completely unprepared for competition that arose as a result of free trade with continental Europe. Ireland’s heavy industries, located primarily in Cork, almost disappeared between 1982 and 1984. Agriculture, The only sector of the economy which was competitive at this stage, was constrained by production quotas, and prevented from taking up the slack in the economy. At the same time Ireland was producing its first generation where university education was widely attained. There was mass unemployment, with many people with tertiary education working minimum wage jobs or being out of work. Emigration returned to 50,000 per year. From 1982 to 1986 the national debt had doubled, mostly due to stabilization policies like welfare, gigantic subsidies to semistate organizations and public utilities, and an effort to reduce inflation and stabilise the currency.

This situation changed dramatically in the mid 1990s as the result of a second, more prodigious, economic boom, known as the “Celtic Tiger” (as in “tiger economy”). This was led by a surge in inward investment in high end industries in services, and lower taxation levels. From 2002, this was augmented by low interest rates set by the European Central Bank which encourage private sector consumption.

So the “subsequent years” Flanigan referred to began at least 14 years later — 1987, which the Wiki reader has to infer is when the first economic boom must have begun.

The fact is that Ireland was considered an economic basket case until well over a decade after Flanigan’s 1973. EU-PU has had nothing to do with the country’s success, and in fact, if the bureaucrats in Brussels have their way with “tax harmonization,” has the potential to threaten it.