Four nuclear attack submarines. That is what the tax paid in Ireland by Apple, Microsoft and Eli Lilly would buy, according to US economist Brad Setser of the Council on Foreign Relations. Irish Times columnist Cliff Taylor says it is a comparison Ireland should not be comfortable with.
Setser puts the three companies’ combined Irish tax bill at around €16 billion a year. He also points to the near €300 billion in annual profits that foreign multinationals declare in Ireland.
A bumper year
Taylor wrote on July 5, the day after the traditional July 4 round of celebration over Irish-American economic ties. The latest figures arrived just before it. More than €35 billion in corporation tax is likely to reach the Irish exchequer this year, he says, nearly enough to cover the whole health budget and most education spending for 2026. Most of it comes from large US firms with operations in Ireland.
Tax receipts overall topped €50 billion in the first six months. Taylor says that makes a significant income tax package, already flagged by Finance Minister Simon Harris, a “racing certainty” for October’s budget. Even if the changes only adjust the system for inflation, he expects them to be sold as a bonanza for middle Ireland.
How the boom began
Taylor traces the windfall to 2015, when corporate tax receipts were close to €7 billion. Ireland was on the defensive then. The government had just agreed to scrap the “double Irish” scheme, which Apple had used in extraordinary ways, as US Congressional hearings showed in 2013.
Then came an OECD-led change. Under a new “substance” rule, companies had to pay tax where they had real physical operations. The aim was to end postbox set-ups in Caribbean tax havens that held billions in US company profits offshore. For many multinationals, Taylor writes, the answer to where to book those profits was a “no-brainer”: Ireland.
Luck kept running, in his telling. A second OECD deal, which Ireland signed in 2021, lifted the rate on the biggest companies from 12.5 to 15 percent. The second part of that deal, which would have cost Ireland by taxing more profits elsewhere, has collapsed. US tax reform plans in 2017 and 2025 left in place the incentives for American multinationals to pay tax abroad. Big pharma, he notes, managed to talk the Trump administration out of tariffs that would have disrupted its Irish operations. This week, IDA Ireland reported extraordinarily strong results for the first half of the year.
The risk
Taylor argues that the size of the numbers invites attention. New rules will require big companies to disclose what tax they pay in each jurisdiction. The payments also distort Irish and euro zone economic data, and a change in US tax rules could still alter company incentives.
He says the exposure is real, and points to an inflated US stock market and uncertainty over an AI bubble as a reminder of what a big fall could mean.
For now, he writes, populist politics push the government to spend the money quickly on households. Insiders call that a necessary part of keeping public support for centrist politics. “Wealth funds don’t win many votes,” Taylor notes. His test is whether the money buys lasting change rather than “a temporary sugar rush,” which means refusing many budget demands.
The state’s tax base is narrowing, Taylor says, leaning on a few big companies and a small group of income tax payers. He sees no credible plan for the bills coming from investment, climate change and an ageing population. “When you keep betting on red in the casino,” he writes, some day the ball lands on black. If corporate tax falls away, he warns, the gap will probably be filled the quick way: by soaking the income tax payer.
