There have been 23 US presidents of Irish descent.
Even among those who have visited Ireland while president, few have worn their Irishness as proudly as Joe Biden, or been as vocal in their love for the land that their ancestors left behind.
While Irish emigrants once left to seek fortune, now major US companies are depositing fortunes here. In the tens of billions. The profits of American companies have become one of Ireland's greatest resources and a critical stream of tax revenue.
Corporate tax receipts have surged in Ireland in recent years. From €15bn in 2021, last year's take swelled by nearly 50% to €22bn. Since 2017 (€8bn), it has nearly tripled.
The most recent figures show that more than half of our corporate tax is being paid by just ten companies. Many, if not all, of them are US multinationals in the tech and pharma sectors. In the last week alone, Apple’s Irish subsidiary posted profits of nearly €70bn, while Microsoft used an Irish operation to send $100bn in dividends to the US.
So, how and why have these companies wound up paying so much tax here in Ireland?
Alex Cobham is CEO of the Tax Justice Network and has a critical view of what makes Ireland so attractive. He told Prime Time that since Ireland joined the EU, it has been increasingly aggressive in pursuing policies to provide a way for American multinationals to shift any profits from other European countries to Ireland.
While he says that this has largely been accepted by other EU member states, in the last ten years Ireland’s corporate tax policy has been a source of political tension.
Economist Brad Setser is a fellow of the US Council of Foreign Policy. He notes: "Ireland also offers very generous depreciation allowances for intercompany purchases of intellectual property which allow many of these companies to lower their actual tax rate below the Irish headline tax rate. It offers a generally very favourable regime for moving profits through Ireland to other jurisdictions."
Mr Setser says that Ireland is not in the same category as some Caribbean countries, acknowledging that it is "a real country that is part of the global tax agreements and arrangements". However, he says that American companies are increasingly choosing Ireland when they move their intellectual property rights out of zero tax jurisdictions like Bermuda and the Cayman Islands.
The degree to which corporation tax receipts have soared is emphasised by the fact that in 2022, they overtook VAT as the second-largest stream of revenue in Ireland. Brad Setser says it’s a situation that’s far from normal. "It's striking. It is unusual, unprecedented, a bit crazy, to be honest. But every single statistic about Ireland's economy and the role Ireland plays in global tax minimization looks a bit extreme, to be honest. Ireland is winning from global tax competition."
Karen Frawley, a tax partner with Deloitte, agrees that it’s an unusual situation and that last year’s corporate tax receipts took both the Department of Finance and the Government by surprise. "I think it's generally acknowledged that this is a short-term issue and that those revenues won't continue to the same extent in the long term," she said.
This extraordinary rise in corporate tax receipts raises questions of how exposed Ireland’s economy is. For one thing, the fortunes of the companies themselves could change.
Economist Rory O’Farrell has examined the profits of the largest US companies with Irish operations and says that profits for them have already peaked.
His main concern at the moment is that the Department of Finance is underestimating how much of the soaring revenues constitute "excess" corporate tax.
Mr O'Farrell said: "The Fiscal Council say that roughly half the corporation tax we got back in 2021 cannot be explained by economic activity happening in Ireland and that figure has probably gone up by 2022.
"So, although they acknowledge that there is some concern about corporation tax, I think we should be more concerned than what the figures from the Department of Finance suggest."
There are also international efforts to harmonise corporation tax. Changes will come as early as next January, with Ireland’s headline tax likely to rise from 12.5% to 15% for big companies.
Some of the proposed changes "seek to keep profits in the countries where they've been made", tilting back towards larger economies like France, Germany and the US. That, says Alex Cobham, would "at a stroke" put a line through Ireland’s bonanza.
But there hasn't yet been enough political consensus for such overhaul.
Karen Frawley said: "The issue is that the OECD hasn't got a global agreement on those changes first.
"But the fact that those changes haven't yet been agreed and may take a number of years to come in may mean that we have a short-term period where we have quite large corporation tax revenue, but then potentially a significant drop-off."
The pressure is not just coming from Europe. There’s also the United States. In the case of American companies with Irish bases, the issue of the companies’ profits being shifted to Ireland has been a sore point for successive US presidents, from that of Barack Obama, to Donald Trump and also now with Joe Biden.
Brad Setser says that while President Biden is proud of his Irish heritage, there’s recognition within the administration that there are "enormous amounts of tax avoidance going on and that Ireland is central to the tax-avoidance strategies that have developed over the past 20 years, but have been reinforced over the past five years. And a sense that we need to get our own act together".
Mr Setser believes that a failure in the US to pass key global tax reforms is resulting in the loss of US tax revenue to jurisdictions around the world like Ireland.
For Ireland, the corporate tax bonanza has been an extraordinary boon to the State’s coffers, so much so that the Government has transferred €6 billion of it to the National Reserve Fund, providing some recognition that the current situation is not a sustainable one.
Rory O'Farrell says that the country is currently in an economic boom and Ireland posting a surplus last year is to be expected, but cautions that almost all of the surplus can be explained by the excess corporate tax.
Listing the current risks to economic harmony (potential US recession, contraction of the tech sector, higher interest on government debt), he says that all these issues could come together at the same time that corporation tax falls off.
He said: "The government will be left trying to fill that hole. Now, it won't be as bad as during the construction crash, but this is a direction of where things could be."