Anyway what you are suggesting isn’t really anything new, it’s just the Laffer Curve, yet another way of over-simplifying a complex issue. Attempting to apply it in real life has shaky results at best excet in extreme cirumstances as seen in both the situation in Ireland (where it was not a suitable long term strategy) and the Bush tax cuts (which contributed to his massive deficit and look like they will never end up paying for themselves). The most common real life application this is often a permant loss in revenue.

“Just because you use the word rational doesn’t make it so. Perhaps a more appropriate word is “legally”. I just don’t see what right he has to tell a country what to do with its tax revenue if he doesn’t pay tax in the country in question. He specifically is asking for these natiosn to increase their spending burden while decreasing his tax burden. I don’t really see what isn’t hypocritical about that.”

I’m using a super-simple political science definition of rationality – that is, rationality = wanting to maximise, rather than minimise, personal access to a given resource or good. As it happens, I have similar concerns about Bono’s messianic undertakings, and the general tone and intellectual basis for an awful lot of international development. But as an individual with means, he can go ahead and preach whatever he likes. The Art Uncut campaign doesn’t seem worried about his hypocrisy (not overtly, at least), but about his moral standing in terms of their framework – and my central point – over whether or not there is a meaningful moral obligation to maximise personal tax contribution.

“It is extremely short sighted. Especially for nations that have large nations of debt as the rewards are only short term, and any GDP increase goes straight into short term debt (look at the Asian Tiger for another example of this). It also opens the door for other short-sighted enticements I mentioned such a soft touch regulation and other enticements that drain the public purse. This reduces the nations sovereignty to deal with its own issues by neglecting health and education and so on, which increases the cycle.”

Ahhhh but you see, I think my strategy for increasing a state’s tax take (so as to eg. balance a budget) is better than yours. Mine involves reducing taxes so that I take a fair amount from a large number of rich people and companies. With less tax burden their profits increase, which also cycles around to increase the tax they pay. Your strategy involves (I suppose) some kind of international legal arrangement to prevent states from undercutting each other in tax so companies might as well stay put. High tax burden reduces marginal spending power, reducing innovation, limiting competition and cutting back profits (and thus, in the end, possible tax contributions).

“The banking crisis is not the sole cause of the financial crisis in Ireland.”

I agree! In fact, this was my original point in the post. I was trying to tackle the question of whether low corp tax can have contributed to what I view as a regulatory failure in banking.

“the lack of regulation was a by-product of the culture to entice corporations to ireland which started with low corporate tax and was build on by with ignoring regulations (being a soft touch on regulation goes hand in hand with being a soft touch on corporate tax).”

You make an interesting argument here – that the failing is attributable to a certain culture, of which both low corp tax and lax regulation were symptoms. This may well be true, but I don’t see a problem with low corp tax in and of itself, particularly as regards the origins of the financial crisis (in Ireland or anywhere else).

Secondly, I feel the lack of regulation was a by-product of the culture to entice corporations to ireland which started with low corporate tax and was build on by with ignoring regulations (being a soft touch on regulation goes hand in hand with being a soft touch on corporate tax). Ireland was transformed into this kind of attitude which was not compatible. Once again I don’t think you can treat these as seperate issues, but rather signs of bigger things going on.

“I also don’t have a fundamental problem with different states competing with each other to attract businesses or rich folk on the basis of low tax.”

It is extremely short sighted. Especially for nations that have large nations of debt as the rewards are only short term, and any GDP increase goes straight into short term debt (look at the Asian Tiger for another example of this). It also opens the door for other short-sighted enticements I mentioned such a soft touch regulation and other enticements that drain the public purse. This reduces the nations sovereignty to deal with its own issues by neglecting health and education and so on, which increases the cycle.

“My complaint just above was that Art Uncut doesn’t mention the fact that Bono is a hard-working philanthropist. I don’t really think he’s being a hypocrite by rationally minimising his own tax burden at the same time as encouraging various state economic interventions. ”

Just because you use the word rational doesn’t make it so. Perhaps a more appropriate word is “legally”. I just don’t see what right he has to tell a country what to do with its tax revenue if he doesn’t pay tax in the country in question. He specifically is asking for these natiosn to increase their spending burden while decreasing his tax burden. I don’t really see what isn’t hypocritical about that.

My complaint just above was that Art Uncut doesn’t mention the fact that Bono is a hard-working philanthropist. I don’t really think he’s being a hypocrite by rationally minimising his own tax burden at the same time as encouraging various state economic interventions.

I also don’t have a fundamental problem with different states competing with each other to attract businesses or rich folk on the basis of low tax.

Also just because Bono isn’t some scrooge mcduck charicature does not really excuse such hypocrisy in his actions, especially when he is seen as the face of encouraging foreign aid and charity. Neither of these two benefit from their de facto spokesperson behaving like a hypocrite, which is what he is being held to task for her. Nothing in the Art Uncut article attacks him for doing charity work, it attacks him for engaging in behaviour that encourages developing countries to ignore their own development to court companies, thus relying even more on handouts. This isn’t a good basis for companies will eventually just leave your country for a competing one that undercuts it (like what happened with Ireland after Bono took his company away)

@joe – rock music purists tend to be, erm, rockist. Not sure if it amounts to racism to mention three non-rock glasto acts who all happen to be black.

@aran – yep, we don’t even need to go to philanthropy to render an argument in favour of minimal taxation.

@mini – thanks!

@pickle – fair point, but I suppose I’d rather trust individual people rather than centralised decisions in most cases. on philanthropy, how about Bill Gates? I’m happier with him putting his wealth into his charitable endeavours than with the idea of it going into government programmes. And as aran says, you needn’t go to charity for individual spending to be better for the economy.

@thomas – I’m using bono because so is Art Uncut. But yes, there’s plenty of room to critique bono’s approach in general, as I indicated in the post. in general though, the point is that his money isn’t going on a scrooge mcduck vault of swimmable gold… the man is charitable and philanthropic, which you wouldn’t get from the Art Uncut campaign. On Ireland- I think I was trying to convey that Irish spending largesse and state debt contributes signally to the financial crisis in Ireland… bad regulation was a big deal, but regulation is absolutely not the same thing as taxation.

Also putting the cause of Ireland’s spending policy as the cause of the economic crisis is a gross over-simplification and ignoresother factors like it’s over-investment in the real estate bubble (which artificially propped up the economy), it’s extremely low taxation for corporations yielding only short term economic gains and it’s refusal to regulate it’s bank industry properly (Ireland has been plagued by banking scandals for the majority of the last decade). It was this kind of short-sightedness in it’s taxation as well as spending that caused these problems.