Devotion to 'faith-based economics' criticised

MINISTER OF State Brian Hayes has criticised devotion to “faith-based economics” and said capitalism and the free market were “a bit like nuclear reactors” at a meeting of Irish and American business representatives yesterday.

Mr Hayes, who is a Minister of State at the Department of Finance, said the Government would continue to battle for a cut in the interest rate charged on the EU-IMF deal. But he said Ireland would continue to defend its low corporation tax rate and that countries “lecturing” Ireland on its 12.5 per cent rate should remember that there were huge disparities in their own effective tax rates.

US Congressman Richard Neal, who also spoke at the event, said he hoped to put to bed the “theology” that “tax cuts pay for themselves”. The Democrat, who is a member of Washington’s influential Ways and Means tax committee, has a record of voting against tax cuts. He said this was “the responsible path”. He indicated that laws allowing the deferral by multinationals of US tax liabilities on foreign-sourced income might in future be adjusted. The current system resulted in “a patchwork of economic effects, some good, and some bad”, he said.