Wednesday, 26 October 2016

What Cutting Corporation tax to 10% would mean for the UK

Richard Murphy: Some of the smaller economic brains inside the Brexit camp are suggesting that the UK should cut it’s corporation tax rate to 10%. Let me suggest some of the consequences.

First, we would lose over £20 billion of tax revenue a year. That’s one third of the total forecast UK deficit. There’s not a shred of evidence that we would recover any of this from alternative new taxes: at best such a tax cut might keep some business in the UK that would otherwise leave, but there is almost no chance business will now relocate to the UK for tax purposes for the reasons I note here, and because it is widely known that tax is usually fifth or sixth on any criteria ranking for location decision making. Being outside the EU will always outweigh the value of this cut for multinational corporations.

Second, many of those paying much less tax will be small UK companies. In fact, every self employed person will have a massive incentive to incorporate their business (as happened when Gordon Brown had a 10% small company tax rate early in this century) and tax avoidance will be enormously boosted as a result at no real gain to the economy.

Or, third, massive anti-avoidance rules will have to be put around small business to prevent them getting advantage of this gain, which will be administratively cumbersome, hard to enforce and reinforce the idea that is already prevalent in tax that their is one rule for big companies that favours them enormously and another for small ones which always does them down. This encourages both social and economic division and at the same time encourages tax evasion.

Fourth, if those rules are not put in place inequality in the UK will rise significantly: the wealthy who could record their income in a company and who do not then withdraw it from the company to live off (which is a certain sign of being wealthy) would be able to accumulate their wealth at a vastly lower tax rate than anyone itself: this is the way to ever deeper social divisions.

And, fifth, any hope of fair markets where the ability to serve the customer is the sole criteria for success would be even further undermined by favouring some who could access this rate and denying others the opportunities to do so, in the process killing any chance of fair economic competition and so undermining the essential nature of free markets that suggests that they have a valuable role to play in society.

There is nothing pro-market in using tax as a competitive tool. This policy is a policy that is instead about destroying market capitalism. It’s ironic hat it comes from the political right as a result, except for the fact that it reveals their real motives: this policy is about increasing inequality and reinforcing the exploitative monopoly rights of a few in this country and not about the well-being of the UK as a whole. And that’s why it has to be opposed.

Richard Murphy is a chartered accountant and a political economist. He is Director of Tax Research UK.

Monday, 24 October 2016

The Impact of Driverless Cars: Blog 2

Paul Sweeney: In the last blog, it was forecast that driverless cars will be in mass production and in use in less than ten years. In this Blog, I will briefly examine the impact of driverless cars on different areas of the economy and society.

Thursday, 20 October 2016

The Massive Impact of Driverless Cars, Blog 1.

Paul Sweeney: A few weeks ago, Uber introduced the first driverless cars on the road: a self-driving taxi fleet in Pittsburgh. Uber, partnered with Volvo, Google, Tesla, Volkswagen, Ford and GM are all investing heavily in driverless cars.

Tuesday, 18 October 2016

Insider lobbying and transparency - the hidden influence of expert and advisory groups

Nuala Haughey: After a full year in operation, the legislation behind Ireland’s lobbying transparency regime is being reviewed by the Department of Public Expenditure and Reform.

This is an important troubleshooting opportunity, as glitches in the law or its implementation can undermine its contribution to increased transparency in public decision-making.

Sunday, 9 October 2016

Opinion poll shows Budget 2017 should provide significant increase in investment in public services and infrastructure

Rory Hearne: Another opinion poll, this latest one from the Irish Times/Ipsos MRBI, shows that “a large majority of voters favour increasing spending on public services and welfare ahead of reducing taxes and charges”. This week’s Budget should reflect this public mood and provide a very significant increase in investment in key public services and infrastructure, particularly housing, a reversal of regressive austerity measures and outline a plan for the restructuring of the Irish economy away from failed neoliberalism towards a more social economy model of development.

Wednesday, 5 October 2016

The Private Rental Crisis: Towards a Solution

P.J.  Drudy: A recent survey of rising rents by is a further wake-up call for all of us and for the government.  During the last three months alone private sector rents nationwide rose by almost 4% and have risen 39% since 2011. 

Tuesday, 20 September 2016

Some People Pay Much More Tax Than Others (ITI Report)

Nat O'Connor: The Irish Tax Institute (ITI) has just published Perspectives on Ireland's personal tax system, which will be discussed on RTÉ Primetime tonight. Their main argument is that taxes are skewed, with those on high and "middle" incomes paying too much, and those on low incomes paying very little.

There are a number of problems with the ITI's analysis, including the prominence given to unorthodox measurements and a lack of context for their comparison with other countries.

Saturday, 17 September 2016

Tuesday, 6 September 2016

The harsh impact of economic inequality on children in Ireland: Part 2

Rory Hearne: Children’s well-being is deeply affected by economic inequality. This is linked to, and results from, inadequate public expenditure on public services like health and education and wider economic inequalities in Irish society, such as income and wealth. In this blog, the second of two blogs dealing with Children and Economic Inequality in Ireland, I look at inequalities relating to health and housing and also some causes and potential solutions relating to reducing child inequality. 

Monday, 5 September 2016

On Apple tax, State must side with its citizens

Paul Sweeney: It is widely agreed that globalisation has bought immense benefits. But it is also recognised that these benefits are not equally distributed. Last week’s Apple decision demonstrates the complexity of the issue of distributing the benefits of globalisation. The Irish Government, faced with a windfall of some €13 billion, appears to have sided with the world’s largest and most profitable company against the welfare of its citizens.

Friday, 2 September 2016

The profound impact of inequality on children in Ireland

Rory Hearne: The impact of economic inequality on children’s levels of wellbeing has received increased attention internationally. This blog draws on the findings from TASC’s second annual report on economic inequality in Ireland, Cherishing All Equally 2016, to provide a brief analysis of the extent and impact of economic inequality on children in Ireland.

Wednesday, 31 August 2016

Appeal of Apple tax ruling is not in the public interest

James Stewart: The commission assessment of unpaid taxes at €13bn plus interest, to be recovered by Ireland is much higher than most expected, especially the Government.

Thursday, 25 August 2016

Replacing USC with 600% Property Tax is Not Likely

Nat O'Connor: Talk of a 600% increase in property tax is a catchy headline, but not realistic fiscal policy. However, it is useful if it gets people thinking about how we pay for public services—and who pays.

There is a political promise in the Programme for Government to abolish USC (the Universal Social Charge). Yet USC brings in around €4 billion per year. So, officials in the Department of Finance (and presumably Revenue) have produced a document spelling out various ways to raise €4 billion elsewhere if the USC was abolished.

There are two key questions: Do we want to keep the same level of tax revenue in order to provide the same level of public services? Who should pay more or less tax?

Housing and homelessness crisis worsens

Rory Hearne: This week’s figures on homelessness and rent increases provide further evidence of the on-going housing crisis. Unfortunately the Government’s recent Action Policy for Housing and Homelessness provided no significant change in direction from the policies that caused the current crisis. Therefore, issues of homelessness and housing unaffordability are going to worsen in the coming months and years with harsh results for those most affected.

Wednesday, 24 August 2016

Despite recovery, Ireland remains a hugely unequal society

Rory Hearne: The fact that the number of homeless children in the capital exceeds 2,000 for the first time since current records began is further evidence Ireland is a deeply unequal country. Economic inequality is worsening despite the recovery and, for those experiencing inequality, particularly children, Ireland is a very harsh place.

Sunday, 21 August 2016

London on the Liffey? Some impacts of the relocation of financial services jobs to Dublin

James Wickham:  Post-Brexit it is widely believed that Ireland will benefit from the relocation of some  financial services employment from London to Dublin.  There are some issues about the type of employment generated by mobile financial services...

Thursday, 18 August 2016

The Not-Sharing Economy Part 2 – Uber and Airbnb

Paul Sweeney: In my last blog, I argued that the so-called “sharing economy” is based on an increasingly “fissured workplace.” Many technology firms can have a negative impact on jobs, workers’ conditions, on taxes and indeed on the sovereign state and democracy. This blog will examine two of these firms in the so-called sharing -  Uber, the world’s most valuable start-up and Airbnb, the  third most valuable one.

Uber has had endless global litigation, including a class-action lawsuit from drivers in California and Massachusetts which it recently settled for $100m. It avoids Irish VAT by shipping payments through Netherlands. 

Monday, 15 August 2016

Women’s unpaid care is pivotal factor in gendered economic inequalities

Dr Ursula Barry and Dr Maggie Feeley: Despite the issue of gender inequalities being well-aired in the past decades, current evidence shows that women in Ireland still experience immense economic disadvantage.

Wednesday, 10 August 2016

The “Sharing” Economy is based on a Fissured Workplace

Paul Sweeney: Uber and Airbnb are not the Sharing Economy. Instead, they represent a rapid increase in the “Fissured Workplace”. 

This “sharing” is large businesses shedding their employees and sourcing labour through "a complex network" of external entities, creating intermediaries between the workers and profiting from that work.

The fissured workplace is developing between a ruthless breed of capitalists, a shrinking elite of core workers, and the rest.