Tag Archives: tax

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economics-should-always-be-paramount-over-tax-considerations-dont-let-the-tax-tail-wag-the-investment-dog-robert-masonRegardless of whether or not an appeal should or should not be taken by the Irish government in relation to the Apple tax ruling, apple themselves will of course appeal. We should not mistake the individual issue, whether Apple did or did not get illegal state aid, for the broader issue of Ireland’s over reliance on (tax driven)  FDI. Its time for a rethink.

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17e4zx0fiiib3jpgTheres a lot of breathless posturing from the Government about the integrity of the tax system, post Apple. From the sound and fury one would imagine that the Commission (boo, hiss) had made a ruling that our 12.5% rate, blessed be its name, was in itself wrong. In fact all they have done is what they have done in numerous other cases – assert that state aid can be channeled by the tax system. Don’t believe me?  Continue reading

Cultural Learnings of Brexit for Make Benefit…

brexit-2So brexit will, or possibly wont, happen. And if it happens we might or might not see a significant change in how the UK interacts with the remaining EU that is if there is a UK and it has not splintered. But what will it really mean for Ireland? And how should we interrogate the issues? A purely economic lens wont really work. We need to look beyond politics, beyond economics.  Continue reading

Taxes, bull and the Irish economy

bull-023Another week  another inversion. This time, passing almost unnoticed in the august torpor, one of the worlds largest meat companies, JBS, signalled that it would relocate its HQ to Ireland. It also noted that this HQ company would be controlled from an office park in Herefordshire.  The reasons for this have nothing whatsoever to do with anything real, all to do with favorable tax and legal reasons. This is unlikely to have any effect on GDP, unless of course JBS decide to start using intellectual property and patents to start to shuffle money around, thus creating “exports” from Ireland.
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If Ireland was Greece…in tax terms anyhow

taxleftontableIreland has a tax problem.. If we were to collect tax at Greek levels, we would take in €8b extra. Greece,…Think about that for a little while and wonder how we could spend that on investment, debt paydown, and increased social services. The chart shows how much more we could raise in taxation if we were to levy tax at the rate of our compeers.

We don’t, really, as an economy pay as much as we should for the services we want. There, I said it. In 2012 we collected 28.7% of GDP in tax. The EU average is closer to 40%. Taxing at the EU average we could have nearly €18b more pa to deploy, taxing at Danish levels nearly €32b. The next time a politician says we dont have resources to prosecute white collar crime, to treat sick children decently, show them the graph here.  Continue reading

Ireland – Not really a high tax economy, just a badly designed tax economy

We as a polity are not big on evidence based policy. We rather form an opinion, then seek evidence for it, or better yet stay silent. This leads to suboptimal decision making, to put it mildly. The emergent debate on tax shows this in spades.

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Tax evasion in Greece – Facts and Myths

Much is made of the meme “sure if the Greeks only paid their taxes…” . The argument, such as it is, elides into the “sure theyre all crooks” and “they should never have been in the EU”. It tips over into racism easily. So what is the case?

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Should we benchmark taxes to lure back immigrants?

The government seems to think so.  Apparently its the income tax that is holding us back.

Reform of the income tax system to encourage emigrants to return home is being considered by the Government in the run-up to publication of the spring economic statement.
Under the plans, the tax system would be benchmarked against countries such as the UK, Australia, US and Canada.
The initiative, which would focus on the marginal tax rates and middle-income earners, is aimed at encouraging emigrants to come home as the economy improves. Ireland’s tax competitiveness, especially on personal tax, has been identified as an issue to be addressed.

Right. And if the government say it so and say it in the Irish Times, it must be so.

Lets see. The OECD are a mine of information. Amongst them is a wonderful subsite called “taxing wages” Its a lovely tool and gives a quick snapshot of the tax wedge. It looks at the incidence of income tax, employee and employer PRSI. It is a hard stark fact that the latter, the employer contribution to social security, which lowers Irish tax incidence. Unpalatable, unpleasant, but a fact…

Here is what it says for Ireland as of 2013 (remember things have gotten better since then…). Ireland is in RED, OECD average in BLUE.  No, this doesn’t take account of the cost of living, the water charges, the state of the roads or any other issue which gets conflated. Its about tax.  Still think we should lower tax on labour?

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This trend, for Ireland to take a lower tax wedge than the OECD average, is a persistent feature of Irish tax policy.

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