Thursday, 29 October 2015

Why Brexit might be good for Europe – and for social equality

James Wickham: As the Brexit referendum draws closer, progressive Europeans might start asking: do we really want them anyway?  Arguably a Brexit would strengthen that amorphous thing, the ‘European project’, not least because it could begin to restore Europe’s progressive dimension.

Wednesday, 28 October 2015

EU ruling will bring realistic approach to "Tax Wars"

Paul Sweeney: “I like to pay taxes. With them, I buy civilization.” said Oliver Wendel Holmes Jr, a US judge in 1927.

Today many major companies see tax minimisation as a core business strategy. And governments, until recently let them away with it. The EU rulings on Starbucks and Fiat will be welcomed by citizens. They should also be welcomed by governments which are cash strapped and cannot pay for much needed and often basic public services.

However, it is likely that the Irish government will be somewhat ambiguous in its response because it may think that the Apple case may impact on future foreign investment. But it could also bring in a lot of much needed tax. The judgement may help bring a more realistic approach to “Tax Wars” between states where the only winners are multinational tax avoiders.

Saturday, 24 October 2015

The State must intervene in housing market

Rory Hearne: The Irish housing system is in an unprecedented crisis. This is visible in escalating rents, ‘economic’ evictions, mortgage arrears, repossessions, waiting lists, substandard accommodation and the growing numbers of those unable to buy a home.

It is a national emergency and without a significant shift in policy the crisis will only worsen. At the current rate of families becoming homeless there will be more than 6,000 children in emergency accommodation by 2017. This is deeply traumatic for children and their families. It is arguably a breach of the UN Convention on the Rights of the Child.

Friday, 23 October 2015

The Commission and Illegal State Aid Rules

Jim Stewart: The EU has been investigating five cases of potential illegal granting of State aid via favourable tax rulings. The Commission means by favorable tax rulings “letters issued by tax authorities  to give a company clarity on  how its corporate tax will be calculated or in the use of special provisions” (Commission Press Statement, 21, Oct. 2015)

The Commission’s recent decision  confirms earlier preliminary findings in the case of two firms Starbucks and Fiat Finance and Trade.  Three cases remain to be decided one of which is Amazon and a case that is very important for Ireland, Apple.

Thursday, 22 October 2015

The problem with animals

David Begg: A few weeks ago I happened upon an RTÉ radio programme in which the author John Banville was talking about the genre of the Scandinavian crime novel. He noted that mostly these novels begin with a horrific crime scene with blood all over the place. Questioned by the interviewer about the attraction of extreme violence to readers he suggested that we have an inbuilt disposition to violence. He argued that this is what motivates young men to join ISIS, for example.

By coincidence there was an article by George Monbiot in the Guardian the following day arguing the direct opposite, i.e. that people are basically good. This is an argument that has divided philosophers – like Thomas Hobbes and Jean-Jacques Rousseau – down through the centuries.

Whichever side of the argument you prefer it is at least obvious that human beings are more complex and nuanced in their motivations than is allowed for in much of the theorising that underpins orthodox economic policy.

Wednesday, 21 October 2015

Independent Review of Ireland’s PPP Experience is Essential

Eoin Reeves: A largely unnoticed feature of the government’s new €27 billion capital investment plan – Building on Recovery -is the decision place a ten per cent cap on the total annual exchequer capital spending on Public Private Partnerships (PPPs).  This marks a significant shift in government policy on PPPs as it recognises the mounting annual spending commitments on existing PPPs.

Tuesday, 13 October 2015

Budget 2016: Budget ‘sweet-spot’ of €70,000 means the Top 10% is the big winner… again.

Cormac Staunton: In our analysis of last years ‘triple effect’ of changes to tax bands, tax rates and USC rates we found that Budget 2015 gave the biggest cash return – in absolute and relative terms – to those earning €70,000: which we dubbed the Budget ‘Sweet Spot’.

Revenue’s analysis of income tax cases showed that a gross income of €75,000 puts someone in the Top 10% of earners in Ireland - which highlights the regressive nature of tax changes that give the greatest benefit so high up the income distribution.  Simply put: these tax cuts were not ‘targeted at lower and middle income earners’.  Looking at the changes to USC and tax introduced in Budget 2016 we see the same principle applied … with the same outcome.

Cash gains in Budget 2016

Budget 2016: Opportunity missed to address social crisis, particularly housing, as chronic under-investment in infrastructure continued

Rory Hearne: So what do the expenditure measures announced in today’s Budget 2016 do to address Ireland’s worsening social and economic inequality? And note the CSO figures show that deprivation rates have increased from 24.5% in 2011 to 30.5% in 2013 while the Gini-Coefficient increased from 31.1% to 31.3%. Firstly, it is to be welcomed that, rather than further austerity, the government has decided to increase public spending and investment, particularly in the area of childcare, education and the extension of free GP care.

However, the increase in spending is insufficient to address the various social crises and austerity related under-investment and the indication is that this is just a once off ‘stimulus’ in an election year with government estimates showing no similar expenditure increases in coming years. The increase in spending in this Budget of €750 million should also be put in the context of the €21bn reduction in expenditure over the period of 2008 to 2014. The increase in Budget 2015 is just 1/30th (just under 4%) of the austerity cuts to spending. And that doesn’t take into account the increased demand and requirement for investment due to changing demographics and people’s needs.

Tuesday, 6 October 2015

Flat Tax benefits Top 25% of earners and reduces services for everyone

Cormac Staunton: When trying to understand the impact of changes to the income tax system there are two vital bits of information that are needed: how much do people earn, and how much do they currently pay in tax.

This is especially important if we are to understand the impact of a radical change such as RENUA’s proposal for a flat tax system. Looking at RENUA’s Q&A on their “flat tax” proposal it seems that a number of myths surrounding these two important questions continue to hold sway. 

Here I will show that because people earn less and pay less tax than we think they do, the proposal by RENUA will lead to tax cuts for the Top 25% of earners, higher taxes for the bottom 75% and fewer public services for everyone. 

Can Corbyn win? - A Look at the Stats

Oisin Gilmore: For over the last 100 years or so progressive politics in Western Europe has been dominated by a small number of major parties. Some of them such as the Sozialdemokratische Partei in Germany, the Labour Party in the UK and the Parti Socialiste in France continue to play this leading role, while others are now just history such as the Parti Communiste Francais, which has shrunk to insignificance, and Partito Comunista Italiano, which has transformed into the Democratic Party. Therefore, the development of these parties has not been merely of domestic interest, but rather it has been of interest for the left across Europe.

It mattered for everyone when the Mitterand government failed in 1983, it mattered for everyone when Lafontaine resigned from the SPD and it mattered for everyone when the Blairite’s launched the ‘Blair Revolution’.

After 30 or so years of shifts to the right in each of these parties, this summer saw a distinctive leftward shift in the UK Labour Party.  Against all odds, Jeremy Corbyn, a rank outsider, won the leadership election. How Corbyn came from the miniscule Socialist Campaign Group (which prior to his election contained 9 of the 252 Labour MPs) to win the leadership election is a story for elsewhere. The fact is that he won. What he can do with that victory is today a more pressing question. And what he can do with his victory depends ultimately on two issues: the policies he proposes and his ability to get those policies implemented.

Here I want to look at this latter question, and I want to focus on it in a very restricted way by looking solely at his ability to get elected.

Friday, 2 October 2015

Making Dublin the capital of Ireland

James Wickham: Two opportunities are about to be lost for dramatic improvements to Dublin. There seems to be considerable push-back against Dublin City Council’s plan to turn Trinity Traffic Junction (officially still known as College Green) into a civic space worthy of a capital city.

Meanwhile the proposed DART Underground project has been deferred again.  Although both issues may appear to be just about transport, they also involve fundamental questions about social inclusion and social cohesion.  In this post I look at the first of these.