An important point can be found in this story: If Ireland is serious about bouncing back economically, it will recognize that the best way to do so is for Ireland to continue to serve as an attractive locale for international business. And that means that Ireland needs to keep taxes as low as possible, lest it scare away investment, global commerce, and the jobs that come with them.
Whether Ireland will do so is, of course, an open question. Brian Cowen, the current Taoiseach, is likely not long for this political world, and of course, this means that Fianna Fáil is doomed in the short term. I am no expert on Irish politics, but it’s easy to envisage a situation in which Cowen’s/Fianna Fáil’s successors will formulate and implement an antediluvian tax policy as a knee-jerk reaction to the crisis, which will only serve to make the crisis worse. That’s the thing about unbelievably bad socioeconomic situations; they promote utter panic in the vast majority of policymakers, and the populace at large, which promotes a lousy set of responses to the crisis in question, which only serves to make that crisis worse. Eventually, heads cool, and someone comes up with a smart plan, but not before an awful lot of damage is done.