Big Business For A Small Island
I am an ambitious 34 year old, who graduated with a master’s degree in 2009. Out of my graduation class of 40, only 9 remained in the country. I was one of the "lucky ones" who had managed to beat thousands of applicants to land my foot on the first rung of the high-tech corporate ladder.
I enthusiastically began my career and very quickly realised that despite the fact I was working, I was less well off than I would have been, if I were to have stayed on the dole. The huge supply of unemployed graduates in 2009, meant that I was earning lower-than-standard graduate pay. I found myself in a situation where all taxes were increasing, I was paying off my student loan, paying for daily transport costs to go to work and over half of any supplemental shares or bonuses went in taxes. In that first year, I often thought of following my classmates abroad. I was surviving on credit cards at the end of every month and saving any money was impossible.
But then a crazy sort of patriotism came over me. I knew of families who were struggling through every month wondering how they were going to pay for their children’s school books. I figured that if I could support them through taxes that paid for the social welfare system, I would. I kept telling myself that things would undoubtedly get better, all economies rebound, and as I got promoted my standard of living would increase. I could start saving to buy a house or potentially save enough money to give me the breathing room to set up my own business. Flash forward 6 years, my career has prospered, I am well on my way up the corporate ladder, but if anything my standard of living has decreased not increased. As I moved up the career ladder, I moved up the tax bracket, and my taxes have continued to rise. My rent price has sky rocketed and now I am paying for a car parking space, car tax and car insurance because the multinational high tech company I now work for, is located in an area with patchy public transport. I have been working continually for 6 years, and I am still struggling through each month. Saving has been close to impossible, but I have managed to put aside a little each month.
Right now I find myself in a strange catch 22. 6 years of working, paying high taxes and contributing to the economic recovery, has made it hard to save a large amount of money. I am the poster child for the Irish economic recovery; highly skilled, multilingual, ambitious and tech savvy. I want to fully embrace the crazy patriotism that kept me in this country in the first place, and set up my own high-tech company and employ the talented students graduating in 2015. To pursue this dream of starting my own company, I am going to have to leave my high-tech multinational job and join the thousands already on the dole.
My multinational masters, through their employment contracts have dictated, that any ideas or products I develop while employed by them is their property. Despite the risk of running out of money, I am going pursue my idea, and attempt to live on the tiny amount of savings I have managed to scrape together over the past 6 years. I refuse to go hat in hand to the banks that destroyed this country, and caused the majority of my friends to abandon these shores and created hardship for thousands of families. So I will foolishly keep pursuing my business plan, trying to tap into Enterprise Ireland funds or chase venture capital funding.
The decision to quit my job has forced me to look at the Multiantional tech companies located here, and question if they are stifling the growth of domestic companies, by strangle holding their employees, through corporate contracts. The corporate tax rate, the laws allowing for the repatriation of profits and the hardworking Irish workforce is the triple cocktail that has led to multinationals setting up in this country. If one aspect of this triple cocktails changes, these multinationals will either downsize their operations or leave Ireland entirely.
It is only a matter of time before we are pressured into playing fair with Europe. In the mean-time this government needs to focus on kick-starting the development of domestic high-tech companies, and use the deep pockets of the high-tech multinational to do so. While these companies are still based in Ireland we should be offering generous tax breaks for companies to establish start-up funds that both European and Irish entrepreneurs can tap into. Encourage a greater reward, the larger the fund is. For example if a company placed 2 million into their start up fund, 2.5 million of their operating profits would be taxed at 5%. Sell it to your politician pals in Europe as start-up funds accessible to European based entrepreneurs, that this is a system that will encourage the development of domestic start-ups and may even help boost the stagnant European economy. This may smell of protectionist policies, Mr. Bruton but it is a step that is necessary. These companies will leave as soon as the axe falls on our corporate tax rate so use them, while they are here, to ensure stability after they leave. I want to set up my own company, and stem the tide of people leaving this country. If I am successful in this venture, I will still be here once the axe falls on our corporate tax rate hopefully employing people, and heading up a successful company. With the benefits our tax system affords these Multinational companies we should look to anchor our domestic economy by encouraging the creation of indigenous companies.
My story is not to be taken in isolation. Where I want to set up a business other people of my generation are looking to save money to ensure they have a 20% deposit for their imaginary house in the future. The generation who missed the housing boom, are living and working to survive. Savings are nearly impossible to amass. More pressure than ever is coming down on this countries tax policies. Heed my advice, encourage start-up funds, through tax breaks and encourage people to set up their own companies, by increasing the access to funding. Do it before the axe falls and we are plunged into another recession.