Diplomacy by Ireland’s new prime minister, whose first official U.S. visit was to Seattle, should help strong West Coast ties to sustain policy changes and tax reforms.
In a strong endorsement of Seattle’s role in global commerce, Ireland’s new prime minister, Leo Varadkar, recently made the Emerald City his first stop on his first official visit to the U.S.
Traditionally new prime ministers would first visit Washington, D.C., New York or Boston, but times have changed, he explained during a break, after visiting Microsoft and Amazon.
“Our economic relationship between the U.S. and Ireland has changed so much that really it’s the Pacific Northwest and California where most of our trade and investment is now,” he said during his Nov. 1 visit.
As of late last year, 223 companies from the West Coast had operations in Ireland, employing 46,540 people.
Varadkar’s outreach and support of this alliance is appreciated. His efforts should help relations withstand policy upheavals in both countries that will test their strength during his term.
As the U.S. considers broad tax reforms, international pressure is growing to address tax-avoidance schemes such as those revealed in the “Paradise Papers” leak.
Varadkar is among a group of young, progressive heads of state — along with Canada’s Justin Trudeau and France’s Emmanuel Macron — who are carrying the torch of progressive democracy and globalization as it flickers in the United States and England.
Varadkar is a 38-year-old, gay son of an Indian immigrant. His rise to prime minister last summer represents how cosmopolitan Ireland has become. The nation’s embrace of trade and cultivation of global tech industries made it Europe’s fastest growing economy in recent years.
Microsoft contributed to this “Irish miracle.” Foreshadowing Ireland’s emergence as a tech hub, it established its first overseas production facility near Dublin in 1985.
Microsoft now employs 2,000 people in Ireland, plus 700 vendors. Recently it invested more than $1 billion there in a major datacenter and a new office campus opening this month.
Now Microsoft is joined by Amazon, Apple, Google and other global tech companies with major facilities in Ireland. They were lured in part by a corporate tax rate that’s a third of that in the U.S., plus a skilled, English-speaking workforce.
The tax advantage may diminish. President Donald Trump proposed cutting the U.S. corporate tax rate from 35 to 20 percent, a centerpiece of the tax overhaul now being considered in Congress.
After a global backlash, Ireland in 2014 began closing loopholes enabling a tax avoidance scheme known as the “Double Irish” but it continues to be a tax haven. Ireland’s 12.5 percent corporate tax rate is among the world’s lowest; the global average is 24.25 percent, and the European Union average is 21.51, according to KPMG.
The European Union is cracking down, though, and is suing Ireland for failing to collect $15 billion worth of taxes from Apple.
Meanwhile, middle-class Irish citizens pay a breathtaking marginal rate of 52 percent, and the Dublin area is struggling with a housing crisis and infrastructure that hasn’t kept pace with its growth.
Varadkar must have felt right at home in Seattle.