Post-election Wednesday morning felt pretty good.

Flesh-eating hospital superbugs are more popular than George W Bush and his Republican comrades in Congress. Democrats are 'our' party, particularly welldisposed to the Irish . . . hell, built by the Irish in the US.

They'll do the right thing on immigration reform. They'll rein in Bush foreign policy. The sun will shine again and soft rain will fall on the world's crops.

As I wrote a couple of weeks ago, after a lifetime of feeling more or less sympathetic towards Republicans, I am glad to see them thrown out of power. So for once, I'm in the majority here. Hooray.

But. Democratic victories in Congress may be popular.

But they may be a disaster for the Irish economy.

In January, Bertie Ahern will unveil the new National Development Plan, which has as its central objective the establishment of Ireland as an international centre for research and development.

This is not a new objective.

Once it became clear that modern Irish wages would erase Ireland's relatively cheap English-speaking labour, policy shifted to move Ireland 'up the value chain'.

Smart Irish policy makers . . . several key civil servants, a few far-sighted elected pols like Mary Harney, Charlie McCreevy, Bertie and Brian Cowen, and an unofficial cadre of advisers from the private sector . . . realised in the late '90s that, for a small, open island economy to prosper, it would need something more than cheap wages, Guinness and the craic. So they focused on persuading big technology and pharmaceutical companies to move their intellectual property here. In 1998, the Irish corporate tax rate was slashed from 32% to 12.5%, still among the five lowest in the world. The US federal corporate tax rate is 35%.

Then, in 2004, Ireland eliminated the 9% tax on the sale or transfer of intellectual property and launched an R&D tax credit. Microsoft was among the first takers.

In 2005, the Wall Street Journal revealed that a company called Round Island One had become Ireland's biggest taxpayer. Round Island One is a brass-plate office set up in 2001 . . . a subsidiary of Microsoft. It booked profits of more than $9bn in 2004. It paid $300m in taxes to the Irish exchequer.

Much of Round Island's revenues come from the license fees from its software, which was by and large developed in the US. The Journal estimated that Microsoft saved $500m in taxes it would have otherwise paid to the US treasury.

Dozens of other US technology companies followed. And that doesn't even cover the far more obvious dodge of transfer pricing, where companies move money between US headquarters and subsidiaries to hide profits from the tax man. Pharmaceutical giant GlaxoSmithKline paid $3.4bn to the IRS in September, the largest tax deal in US history, to settle claims it had cooked its books using transfer pricing.

Some clever people working for the US Congress, however, copped on to this practice four years ago, and forced through a law called the Reversing the Expatriation of Profits Offshore . . . or REPO (geddit? ). This wound up prompting a one-time sending home of cash in 2002 that impacted on Ireland's balance sheet.

Now, consider one thing.

That mini-outburst of outrage emerged from a Republican-controlled Congress, probably the most businessfriendly since the 1920s.

Democrats like Charlie Rangel, the congressman in line to chair the powerful Ways & Means committee, will not be so gentle. One of his top priorities will be to make it harder for big companies (like those that make up the bulk of Ireland's top taxpayers) to avoid US taxes by booking their profits in foreign subsidiaries.

US taxpayers have been subsidising public services in Ireland and other 'offshore tax havens' for a decade.

Democrats want to bring that to an end. If they succeed, you might feel differently about the Democrats you cheered to victory. You'd better hope that the definition of 'offshore tax haven' is watered down enough to keep Ireland off that list of villains.

You might miss those Ireland Inc-friendly Republicans yet.