The Irish government is unbelievably rich. It’s largely thanks to Uncle Sam.

The country currently has so much money it pumps cash into not one but two sovereign-wealth funds. It is so flush that the budget watchdog doesn’t warn about not having enough money but rather that the government is spending so much that it could overheat the economy.

In Dublin, authorities are building what might become the world’s most expensive children’s hospital. There are plans for a motorway to link Cork and Limerick, new flood defenses in Shannon and floating wind farms off the south coast. Outside the parliament sits a new bike shed that cost half a million dollars, houses 36 bikes and doesn’t keep out the rain. The state is spending $10 million to get children off their phones at school, including mass-buying magnetic pouches to lock the devices away so they don’t get distracted.

“The good times are back," says Pat Woods, as he stretches his arms out over the red leather banquette of his pub the Dame Tavern in central Dublin. “Everything is flying." Standing in a nearby street sucking on a vape, a local hairdresser marvels at what is unfolding. “The spending is wild," he says.

Helping fund this largess is the U.S. tax system and an unexpected side effect of a global clampdown on corporate tax dodging. The U.S. government and the European Union spent the past decade changing laws and pressuring big multinationals not to book profits in offshore jurisdictions, such as the Cayman Islands, where they have no operations and pay no corporate tax. So now many U.S. companies are doing the next best thing: parking their international profits in low-tax Ireland where they employ some people and pay some tax. Among those known to use Ireland are Apple, Alphabet’s Google, Microsoft and Pfizer.

The result is a vast windfall for a country of 5.4 million people. Ireland, which now offers a headline 15% corporate tax rate to big companies compared with 21% in the U.S., expects in 2024 to have raked in 37.5 billion euros, equivalent to $39.6 billion, in corporate tax revenue, up from €4.6 billion a decade earlier. That works out at around $7,300 per person. In the neighboring U.K., corporation tax generated around $1,300 a head in fiscal 2024.

A country that was once famed for mass emigration—and nearly went bankrupt 15 years ago following a banking crisis—is now importing workers to build everything from wind farms to houses amid surging demand, a shift in economic fortunes almost unimaginable a generation ago. “Historically Ireland had loads of people and no money," says Seamus Coffey, chair of the Irish Fiscal Advisory Council. “Now we’ve loads of money and not enough people."

President-elect Donald Trump’s election victory brings some uncertainty as to whether Ireland’s tax boom will continue. Trump has said he would cut the corporate tax rate for companies that make products in the U.S. to 15%, matching Ireland’s headline rate. Tax experts say it is too soon to say for sure what will happen, but if the Trump administration did entice U.S. firms to repatriate profits or intellectual property, the effect on the Emerald Isle could be dire.

The Irish Fiscal Advisory Council estimates that just three big foreign companies made up 43% of corporation tax receipts in 2022. Around 15% of the Irish workforce is employed by just under 1,000 U.S. companies, according to Ireland’s foreign direct investment agency. Those businesses and the people employed by them may contribute as much as 60% of the government’s entire tax take, according to a recent estimate by Cormac Lucey, a lecturer at Chartered Accountants Ireland.

For now, Ireland’s leaders are choosing to look the other way.

Ahead of an election on Nov. 29, the ruling coalition announced a giveaway budget that included €7.1 billion of income tax cuts and cash handouts to every household to help cover their electricity bills. Longer term, there are grand plans. The government’s 2040 investment plan includes a ring road around Galway, a metro in Dublin and some 30,000 new homes in the Cork docklands.

The big question is whether all this will get built. The projected cost of the children’s hospital, now €2.2 billion, is a running joke in Dublin, as is the parliament’s pricey bike shed. “We asked for a bike shed, not the Taj Mahal," says the legislature’s cross-party cycling group.

Coffey, the chair of the advisory council, recently warned that this surge of government spending risked fueling inflation in an economy projected to grow 2.5% this year and close to 3% next year. Ireland also suffers from a chronic housing shortage and needs around 80,000 extra workers to come in and build accommodation, he says.

Sitting in an office overlooking central Dublin, the man who is credited with helping design the country’s corporate tax system says he is hopeful it will keep writing the checks. After the U.S. and EU reached a deal that set a global minimum corporate tax rate “there were a lot of people here saying, ‘God, this could be the end.’ And I said, ‘This is going to be great,’" says Feargal O’Rourke, a former PwC partner who now chairs Ireland’s foreign direct investment agency. “But I actually didn’t envisage how good it would be."

For decades the U.S. government hit U.S.-based multinationals with a 35% tax on their global profits. They only paid that full amount if they repatriated them to the U.S. So firms had an incentive to book profits abroad and keep them in separate accounts.

Ireland proved an attractive destination. Big pharmaceutical and tech companies built European headquarters here, where they benefited from seamless access to the EU and a 12.5% tax rate.

A tax play known as the “Double Irish" allowed global profits to be kept outside the U.S. and taxed at a minimal rate in tax havens.

Then in 2017, the Trump administration cut the U.S. domestic corporate tax rate to 21% and imposed a minimum 10.5% rate on worldwide profits regardless of whether they were repatriated. Four years later, Ireland bumped up its corporate rate to 15% to match the worldwide minimum brokered by the Organization for Economic Cooperation and Development.

Counterintuitively, this turned out great for Ireland.

U.S. businesses responded by shifting hundreds of billions of dollars in intellectual property, such as patents and research, out of tax havens and into their Irish operations. Irish tax law allowed them to defer the cost of buying in their own IP from tax havens against their future profits, allowing them to reduce their tax bills.

Apple was ahead of the curve. In 2015, it moved its IP into Irish tax-based companies, contributing to a 26% leap in Ireland’s economic growth that set a postwar European record. This was dubbed “leprechaun economics" because the surge in growth had no link to Ireland’s actual economic performance.

The Irish government predicts the scale of this tax windfall will moderate in coming years. This year’s record haul was plumped up after the EU’s top court demanded that Apple pay Ireland $14.5 billion of unpaid taxes accumulated over more than a decade—a ruling Ireland actually opposed, saying it wasn’t owed the money.

As the U.S. deficit continues to swell, there may be an appetite to revisit current U.S. tax arrangements to try to rake in some more tax revenue, says Brad Setser, a senior fellow at the Council on Foreign Relations.

O’Rourke, the chair of Ireland’s foreign direct investment agency, says he recalls two major U.S. corporate tax changes: one in 1986 and one in 2017, and nothing much in between.

“It took them 31 years to change the taxes for the U.S. Is it going to happen again soon? I don’t know," he says.

Write to Max Colchester at Max.Colchester@wsj.com