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

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.

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.

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.

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.

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.

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…

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.

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.

Why the EU Commission is right to call for increased public investment in infrastructure

Paul Sweeney: The new EU report on the Irish Economy EU Ireland report 2016 makes for interesting reading, if only to see how Brussels views our recovery. There is probably something in its 85 pages of analysis and data for everyone, depending on your perspective. 

Open government mid-term report shows need for sustained momentum behind reforms

Nuala Haughey: An independent report charting progress (and lack of progress) on Ireland’s open government reforms will be published in Dublin this week. The report is a mid-term assessment of the extent to which Ireland has fulfilled the goals set in its first Open Government Partnership National Action Plan 2014-2016.