Obama May Hurt Irish Economy

"I'M in this race to take those tax breaks away from companies that are moving jobs overseas and put them in the pockets of hard working Americans who deserve it."

So said Senator Barack Obama in Des Moines, Iowa on November 10 last year.

It is the first quote you come across on his website under the economy heading, which makes it a key priority for the Illinois senator. It may also spell very bad news for Ireland.

Ireland is the most profitable country in the world for subsidiaries of U.S. companies. The incredibly low 10% corporate tax regimen means that companies continue to use Ireland as their favored overseas destination. Obama may move to end all that.

Ireland wins 25% of all American investment in Europe, even though it accounts for just 1% of the European population. That could all change dramatically under a President Obama.

Punitive measures against companies that shelter their profits overseas in subsidiaries, such as what happens in Ireland, could have an alarming and negative impact in Ireland.

The incentive to shelter profits in Ireland would quickly dry up if an Obama administration moved against such companies. In 2004 American companies reported $26.8 billion profits from Irish subsidiaries.

In 2004, pharmaceutical company Merck shifted $9 billion in profits to Ireland and thereby avoided paying some $500 million in U.S. taxes.

Using their Irish company, Microsoft also avoids taxes elsewhere in Europe, the Middle East and Africa. The maneuver helped Microsoft drop its worldwide tax rate from 33% to 26%.

The Celtic Tiger was built on American multinationals relocating bases in Ireland where they could take advantage of the corporate tax regimen.

This is an issue that also came up under former contender Senator John Kerry and that deeply concerned the Irish government. Fortunately for them it never came to pass after President George W. Bush defeated Kerry.

Now it is back center stage, and with Obama looking more and more like the frontrunner it could prove to be a major issue for the Irish government.

Power a Real Power

IF Obama is elected then Samantha Power, one of his key foreign policy advisors, seems sure to serve in the new administration, possibly as national security advisor.

If she did Power would be the highest Irish-born figure to ever serve in an American administration.

Born in 1970 in Dublin, Power left Ireland with her family to move to Atlanta when she was nine, but has retained close links with her Irish roots.

Currently she teaches at the Kennedy School of Government at Harvard. She graduated from Yale and Harvard Law School.

A former journalist, she worked for U.S. News and World Report and the Boston Globe in Yugoslavia. Her book A Problem from Hell: America and the Age of Genocide, won the Pulitzer Prize for general non-fiction in 2003.

Alongside her work with Obama, Power has been involved in several efforts to increase awareness with regard to genocide and human rights abuses, most particularly regarding the Darfur conflict.

In 2004, Power was named by Time magazine as one of the 100 top scientists and thinkers of that year. She spent 2005-06 working in the office of Obama as a foreign policy fellow, where she was credited with sparking off and directing Obama's interest in the Darfur conflict.

Now she is at the center of the Obama foreign policy team, which is headed by former Clinton national security advisor Tony Lake. She may well ride that connection all the way to a cabinet post in an Obama administration, if that ever comes to pass.

McCain's Irish Support

ONE of the more notable aspects of the New Hampshire campaign from an Irish American point of view was the amount of Irish support for John McCain.

McCain was endorsed by Irish American Republicans group some time ago and several of their members, including Jeff Cleary and Grant Lally, the co-presidents, have spent the last few weeks in New Hampshire working for the McCain campaign.

At almost every McCain rally there were "Irish for McCain" signs, an indication that the Arizona senator has caught on with Irish Americans.

That is not entirely surprising. McCain has Northern Irish roots and has always made clear his affinity for Irish causes.

If it is Obama versus McCain we will have two candidates with Irish roots - remote in both cases, but nonetheless, enough for both parties to claim access to the Irish vote and, more importantly, Irish fundraising.

Huckabee's Hardline

MIKE Huckabee is set to push ahead with a controversial proposal that would not allow children of undocumented parents to become America citizens, according to news reports on Tuesday.

That certainly ups the ante on the Republican side in the effort to become the most hardline candidate on the issue of illegal immigration.

Huckabee once had enlightened views on the topic, but since he has become a GOP contender he has drifted to the far right, especially on the issue of amnesty.

It has to be remembered that Ireland currently has a similar law in effect, that children of non-nationals are not citizens. It seems this anchor baby issue could well become the next big talking point on the Republican side.