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Posts in the "Taxation" category

UK Autumn Statement fails to tackle underlying problems

Posted on December 05, 2013 by Paul Mac Flynn

In the Autumn Statement today the Office for Budget Responsibility has upgraded forecasts for growth in the UK economy from 0.6% to 1.4% for 2013. Furthermore they have upgraded forecasts for 2014 and 2015 to 2.4% and 2.2% respectively. While much attention has focused on the speed of the UK recovery, the composition of any such recovery matters just as much. The first point to make is that while GDP growth appears to be growing again, it follows a long period of stagnation from mid-2010 to mid-2013. The absence of growth for nearly 3 years means that the level of UK GDP is still some 2.5% below its pre-crisis peak. Fiscal austerity smothered the beginnings of a recovery in 2010, and the UK economy is only now experiencing what by historical standards is modest GDP growth.

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Permanent link | Categories: Government SpendingJobsMacroeconomicsNorthern Ireland Taxation

Assessing the impact of Budget 2014

Posted on October 15, 2013 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

An economist was once asked to assess the impacts of the French Revolution of 1789 to which she replied 'it is too early to say yet'. Budget 2014 may very well fall into this category.  In some ways like an impressionist painting in the Art Gallery the viewer has to stand back and ponder it all. Much detail, many tax cuts for businesses, lots of nasty cuts for some and universal cuts for those who are sick, elderly or young unemployed.  How do we assess the likely employment, output and public finance impacts of this Budget?

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Permanent link | Categories: Government SpendingInvestmentTaxation

Is it really €2.5 billion ?

Posted on October 13, 2013 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

Having spent 5 years now in the austerity trenches another few hundred yards seems surmountable especially when the casualities are counted as €2.5 billion instead of €3.1 billion in 'fiscal adjustments' (cuts to spending or increases in tax neither of which is nice). But, €2.5 billion is still €2.5 billion. In other words around 1.5% of GDP in an economy already on its knees in terms of retail sales, employment and debt.  A smaller casuality hit is welcome. But it depends very much on the detail of what is announced next Tuesday in Budget 2014.

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Permanent link | Categories: Government SpendingTaxation

Ireland - a place of tax safety and refuge ?

Posted on September 16, 2013 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

Writing in the Irish Times recently, Feargal O’Rourke head of tax at PwC Ireland declares: ‘What can be said with absolute certainty is that every company within the charge to Irish tax pays tax at 12.5 per cent on their activities – that is a fact.’ (‘Whatever way you look at it, Ireland is not a tax haven’). Certainty is a word to be used with caution. One cannot presume to know the details of any particular case and nobody is suggesting that. Indeed the tax code allows for special and specific cases of taxation at 10% and 25% but these are exceptional cases. Frequently, in matters to do with taxation, commentators have a fixation with ‘headline’ rates.

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Permanent link | Comments | Categories: Taxation

Ireland and Europe's FTT Proposal

Posted on August 26, 2013 by Micheál Collins

In the context of the recent international financial crisis, one principally derived from the reckless speculative behaviour of numerous banking and financial corporations, the long-term hesitancy towards a financial transactions tax (FTT) tax has begun to thaw.

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Permanent link | Categories: MacroeconomicsTaxation

Reforming Tax Credits in Budget 2014

Posted on July 31, 2013 by Micheál Collins

Taxation options are a key context for the forthcoming Budget (October). However, given the distortionary effect of any taxation change, and the fragility of the domestic economy, any choices around raising additional tax revenues are challenging. These challenges are magnified given the notable increases to most areas of taxation over recent years. As such, it remains important that choices are examined and their revenue and behavioural implications considered in advance.

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Permanent link | Categories: Government SpendingIncomeTaxation

Budget 2014: Some Tax Options

Posted on July 15, 2013 by Micheál Collins

On Saturday last, July 13th, Claiming Our Future held a conference in Corke Park to consider the options and policy choices for Budget 2014. As part of the conference, I presented some options on taxation - my slides are available here. In it I argued that the Budget should focus on growth and recovery and adopt a more growth friendly approach to making the €3.1bn adjustment planned for this October.

The presentation is available here.

 

Permanent link | Categories: MacroeconomicsTaxation

We need a change of course and we need it now

Posted on June 27, 2013 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI


While caution is always advisable in examining the latest quarterly data, the release by the Central Statistics Office of the latest quarterly national accounts was something of a wake-up call to those eager for news of a recovery. The Republic of Ireland is in a deep stagnation. The downturn has lasted longer than any period of recession since the 1950s, here. A further contraction in personal consumption and investment in the first quarter of this year confirms a downward trend apparent in the second half of last year. This is disappointing but hardly surprising given the impact of austerity abroad and at home.

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Permanent link | Categories: Government SpendingInequalityInvestmentMacroeconomicsTaxation

Ireland has the lowest Tax Wedge in Europe

Posted on May 15, 2013 by Micheál Collins

The tax wedge measures the difference between the total labour costs to the employer (wages + employers PRSI) and the corresponding net take-home pay for an employee (gross wages - all income taxes and PRSI). It is generally reported as a percentage of total labour costs.

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Permanent link | Categories: Labour costsTaxation

Tax Revenue Stability and Corporation Tax

Posted on May 13, 2013 by Micheál Collins

One of the lessons of the recent economic collapse (I hope!) has been the importance of a stable tax base. Total stability is impossible for a small open economy like Ireland; we will always have swings in economic performance which will alter the volume of economic transactions and tax revenues. However, policy should aim to limit exposure to tax revenue instability as well as closely monitor those areas where revenues are unstable.


Despite these lessons, we pay limited attention to the stability of the corporate tax system - one of the four main areas of exchequer revenue. Based on the recent Department of Finance Stability Programme Update (April 2013) corporation tax revenues account for 11% of total taxation income.

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Permanent link | Categories: MacroeconomicsTaxation

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