Tuesday, 3 May 2016

Tax havens, secrecy and policy options

Jim Stewart: Panama is primarily a secrecy jurisdiction. The main function of the firm at the centre of the leaked documents, Mosack Fonseca, is to incorporate entities. This often involved a chain of ownership across several ‘tax haven’ type jurisdictions. A chain of ownership is used to make identification of true owners very difficult. This is one reason why this leak is of far greater significance than other leaks, for example the Luxleaks, because the web of interconnections and chain of ownership has been revealed.

Friday, 29 April 2016

Tax havens and the Panama Papers

Jim Stewart: This blog is about tax havens: their growth; functions, characteristics, and how they might be defined. A related blog tomorrow considers in greater detail the role of Mossack Fonseca (the Panama firm at the centre of the leak), whether Ireland is a tax haven, and some of the effects and policy issues arising from publication of the Panama Papers.

Monday, 25 April 2016

The Danger of Deflation

Paul Sweeney: The danger of deflation, i.e. falling prices, is that people wait to consume and so demand falls and that ultimately puts people out of work. Deflation has been hovering around for some years but so far, it has not bitten. However, it is not far off as European countries have been enduring low inflation for some time. There is also very weak demand and little growth.

Friday, 22 April 2016

Misplaced views on the keys to competitiveness

Proinnsias Breathnach: A key topic on Ireland’s radio airwaves this morning was the publication of the National Competitiveness Council’s annual “Cost of doing business in Ireland” report.  The report featured prominently on both Morning Ireland and the Seán O’Rourke programme on RTE.

Most Irish economists and business journalists have a fixation on production costs, and particularly labour costs, as the key to Ireland’s international competitiveness.  This has the nature of a religious mantra about it, based on blind faith rather than the available evidence.

Monday, 18 April 2016

Health Inequality Worsens for Irish Children

Rory Hearne: Health inequalities affect children in a number of ways. One measure of health inequality is waiting lists for various forms of treatment or assessment in our public hospital system. The recent HSE figures show that the trend in waiting lists is worsening for children in Ireland. The numbers of children waiting to be seen in hospital day cases, for example, has risen by a third (33.7%) in just over a year (from December 2014 to March 2016).

Sunday, 17 April 2016

Rebuilding Ireland: It’s time to end bogus self-employment in the construction industry

James Wickham: As far as the tax system is concerned, many workers on Irish building sites are not workers at all.  Instead of getting wages for doing a job, they are receiving a fee for a contract.  Yet many of them are working in exactly the same way as if they were being paid wages.  Indeed, many building workers can only get jobs if they agree to work as self-employed sub-contractors rather than PAYE workers.  They are in other words, some of the new ‘bogus self-employed’.  In a recent report from the Working Conditions in Ireland project TASC documented the growth of this practice and highlighted its negative consequences for workers, for the state’s finances, and indeed for the industry itself.

Thursday, 14 April 2016

How to Fund Housing and Infrastructure

Paul Sweeney: There is a simple solution to directly funding an immediate major social housing programme and other infrastructure. It is to use the billions already flowing into the Exchequer from the sale of the shares in the rescued banks for infrastructural investment, instead of paying down the national debt. Interest on the debt is only 0.7 percent and it can be paid down over a longer period from taxation.

Wednesday, 13 April 2016

Low pay in Ireland: causes, consequences, and solutions

Cian McMahon: This blog provides a brief overview of TASC’s recent submission to the Low Pay Commission on the level of the national minimum wage and the high proportion of women on the minimum wage. Our contribution highlights the economic and social consequences of low pay in Ireland, while also advocating for a progressive policy response.

At 23%, Ireland has among the highest incidence of low paid jobs in the OECD. The low paid are mainly women, who represent 60% of all low paid workers in Ireland. This high level of low pay amongst workers contributes to Ireland’s high level of gross (pre-tax-and-transfer) income inequality.

Friday, 8 April 2016

Five Proposals for A New Programme for Government

Rory Hearne: TASC has produced a new report (Towards Cherishing All Equally: Five Proposals for a New Programme for Government) outlining five policy proposals that could address some of the economic inequalities in Ireland. It is hoped that those involved in forming a new government, and those with a role as a responsible opposition, will find these useful. What is revealed by our analysis of the key indicators of economic inequality (see Chart 1) is that deep seated inequalities exist in Ireland. 

Monday, 4 April 2016

More Actions Needed to Curb Tax Cheating

Paul Sweeney: The recent stories in the news that there is widespread tax evasion and avoidance by the rich and powerful is hardly new. In my last blog, below, called Good News on Corporate Tax Avoidance, I was optimistic on the role of the OECD BEPs process. 
In spite of the news I still hold that there has been some progress. The  downward spiral of avoidance and evasion is being reversed. Evasion and avoidance is still continuing on an industrial scale in the globalised economy which assists such actions, but things are changing, at last. Tax paid by multinationals and the global rich – the 1%ers – is very low, but the public is less tolerant of it.

Friday, 1 April 2016

Inequality and the Millennial Generation

Rory Hearne: A global debate is taking place about the plight of the Millennial Generation and the ‘intergenerational inequalities’ they face. This also starting to receive some attention here in Ireland. The Millennials have suffered a significant level of ‘generational inequality’ in regard to a disproportionate impact from the recession and austerity. This includes higher unemployment rates, higher increases in rates of suicide and self-harm and higher emigration rates.

Thursday, 31 March 2016

Good News on Corporate Tax Avoidance

Paul Sweeney: The public anger at the low levels of corporation tax paid by multinationals has forced action by states and may be beginning to bring in some extra taxation to hard pressed governments. Public anger also forced governments to curb their ambiguous relationships with the corporate multinational world. 

Previously, governments have increasingly vied with each other in the zero sum game of Tax Wars (“tax competition”) for foreign direct investment. The G20 asked the OECD to work on avoidance and they came up with BEPS or Base Erosion and Profit Shifting. It seems to be working. 

Apple and Ireland

Monday, 21 March 2016

A Challenge to Ireland’s Wealthy

Paul Sweeney: “We can well afford to pay our current taxes, and we can afford to pay even more. Our state needs to invest this revenue in our struggling schools, in antipoverty measures and in infrastructure improvements.” So say a group of 40 New York millionaires.

Sunday, 20 March 2016

Retreat on Comprehensive Reform on Pension Taxation in Ireland and the U.K.

Prof Gerry Hughes: In the last fifteen years the cost of pension tax relief has doubled in Ireland and the U.K. and most of the tax relief accrues to higher taxpayers. In both countries there has been official concern about the sustainability of the cost of government subsidies for private pensions and some steps have been taken to make the system more equitable by, for example, introducing limits on the lifetime size of a pension fund and on an annual contribution to a pension.

Wednesday, 16 March 2016

Good News on Climate Change

Paul Sweeney: It is not often that we get good news on climate change, but a report from the International Energy Agency is positive and interesting. It found that Global energy-related carbon dioxide emissions (CO2) – the largest source of man-made greenhouse gas emissions – has remained flat for the two years in a row.

Sunday, 13 March 2016

Lifetime Community Rating and Inequality

Nat O'Connor: We are coming up to the first anniversary of Lifetime Community Rating (LCR) in private health insurance and it is timely to consider how this policy reinforces Ireland’s multi-tier health system and entrenches income inequality.

The previous government introduced LCR in May 2015, affecting everyone aged 34 or older. For every year a person does not hold health insurance, he or she must pay an additional 2 per cent per annum on the cost of an annual health insurance premium.

For example, someone who first takes out health insurance aged 39, five years beyond the age threshold, will pay a 10 per cent additional cost for life; so a €2,000/year premium* will cost that person €2,200/year instead. This adds up, and with the added unknown of health insurance price inflation, the crude percentage increase caused by LCR could have an even greater effect.

(* An average premium of €1,925 in 2015 was cited by a survey carried out for the Health Insurance Authority/HIA, although most people goaded into taking up insurance by LCR appear to be paying around €1,000 for the cheapest policies; schemes that come with so few benefits that serious questions could be asked about them).

But wait, wasn't LCR motivated by equality, or at least solidarity between the generations? LCR pushes younger people to sign up to insurance, which keeps the system funded (and the majority of insurance beneficiaries are older people or people with long-term illnesses). In theory yes, but if someone has a poor start in life or has many demands on their income (from children, disability, elderly relatives, siblings, or whatever) he or she may simply not be able to afford to buy health insurance until later in life – and he or she will be punished by the LCR system for this.

Wednesday, 9 March 2016

Wealth rising at the top

Rory Hearne: The increasing concentration of wealth at the top of society has become a major economic, social and political issue.  It is surprising, therefore that last week’s Knight Frank Wealth Report 2016, which suggests that the number of ultra-wealthy individuals in Ireland is set to increase by 28% over the coming decade, did not garner more attention.

Tuesday, 8 March 2016

The price of car dependency

James Wickham: Three almost random stories about Dublin’s transport disaster.  The first two show what happens if there is little investment in public transport; the third shows one consequence of stop-go investment, governed by short-term expediencies…

Monday, 7 March 2016

An EU Mirror Held Up To Ireland’s Economic Policies

Paul Sweeney: In this final blog on the recent EU report on Ireland, a few more issues will be examined. 
We Irish are fascinated with how other perceive us, particularly as our economy is recovering after the self-inflicted Crash of 2008. This report is like a mirror allowing us to see ourselves our policies and actions.

Thursday, 3 March 2016

The EU on Ireland's Lack of Investment and the Improving Irish Labour Market

Paul Sweeney: I continue my examination of the recent EU report on Ireland EU Country Specific Recs. Ireland. It recommends three priorities for EU economic and social policy in 2016: re-launching investment; pursuing structural reforms to modernise Member Statesʼ economies; and what they call “responsible” fiscal policies. It is a staff working paper and while not necessarily reflecting the views of the Commission, it is close, in my view.