Irish economy grows 26%

gazapc

Of course with larger GDP will their EU budget contribution rise?

mwpt

And you guys say the remain voters are negative.

Alan_Brown

I read an article on this where the Irish government were concerned about the UK flagging that we could lower Corporation Tax rate to 15% and the impact it would have on Ireland (it also discussed the impact it would have on Northern Ireland who have just recently received devolved powers to lower their own CT rates).

The gist of the article was that personal taxation in the UK is much lower than in Ireland and so a UK with a comparable CT rate to Ireland but lower personal taxes would attract a larger number of companies because of their increased ability to attract staff.

I would hope that a balance is struck to allow a reduction in CT but not so much that the government have to increase Income Tax to make up for the shortfall in tax. It'd be outrageous to have the Irish model where ordinary people have higher taxes so that billion dollar companies have lower tax.

mwpt

Alan_Brown wrote: »

I read an article on this where the Irish government were concerned about the UK flagging that we could lower Corporation Tax rate to 15% and the impact it would have on Ireland (it also discussed the impact it would have on Northern Ireland who have just recently received devolved powers to lower their own CT rates).

The gist of the article was that personal taxation in the UK is much lower than in Ireland and so a UK with a comparable CT rate to Ireland but lower personal taxes would attract a larger number of companies because of their increased ability to attract staff.

I would hope that a balance is struck to allow a reduction in CT but not so much that the government have to increase Income Tax to make up for the shortfall in tax. It'd be outrageous to have the Irish model where ordinary people have higher taxes so that billion dollar companies have lower tax.

This topic is an interesting one. Could you explain, apart from moral reason, why you would prefer corporations to pay higher taxes than individuals?

My hints on how I think this through: Taxes to corporations are often passed to consumer. Which demographic is impacted most by a rise on cost of goods? Do you think that high earners should be paying a higher percentage of salary as tax?

marathonic

Thrugelmir wrote: »

There's no personal tax allowance. From €1 upwards income tax is paid. Might as well move to the UK.

There are tax credits which means you calculate income tax on your total income but you offset your credits against tax owed.

A married couple will receive a Personal Tax Credit of €3,300 and each person will also have a PAYE Tax Credit of €1,650 - others are available but these are the main ones.

For a married couple with one earner, for example, the person will have a total tax credit of at least €4,950. If that person pays tax at 40%, this is equivalent to a personal tax allownace of €12,375.

https://en.wikipedia.org/wiki/Tax_credits_in_the_Republic_of_Ireland

Alan_Brown

mwpt wrote: »

This topic is an interesting one. Could you explain, apart from moral reason, why you would prefer corporations to pay higher taxes than individuals?

My hints on how I think this through: Taxes to corporations are often passed to consumer. Which demographic is impacted most by a rise on cost of goods? Do you think that high earners should be paying a higher percentage of salary as tax?

I actually didn't say that corporations should pay higher taxes than individuals. I remarked that I hoped a balance could be struck to allow a reduction in CT but not by so much that the government have to increase Income Tax to make up for the shortfall.

On a wider discussion around taxation, I think that if the state provides the circumstances for individuals and companies to prosper then some of that prosperity should be returned to the state. The amount returned shouldn't be unduly onerous and a large proportion should be re-invested to further prosperity.

I feel that companies with higher profits should pay more taxation than companies with lower profits, and this also holds true for individuals, with higher incomes paying more than people with lower incomes.

Thrugelmir

mwpt wrote: »

And you guys say the remain voters are negative.

As the saying goes if it looks greener on the other side there's probably more manure.

Generali

Ireland's GDP may have risen 26% but its output didn't rise by that amount.

This graph probably sums up the reality of Ireland's economic recovery far better:



If you're interested this is Irish consumption compared with the UK's since 2000:



A good example of what is going on is in aircraft leasing.

A Spanish airline Xyz Air sets up a company in Ireland, Xyz Air Leasing (Ireland) Pty Ltd, to lease planes to Xyz Air. Xyz Air Leasing (Ireland) buys a load of planes that are not made in Ireland that will rarely if ever fly in Ireland because the profits the company makes are taxed at 12.5% rather than because of any genuine desire to operate in Ireland.

The turnover of the company will be counted as part of Irish GDP but it is very hard to see how it adds that much to Irish output in any meaningful sense. Yes, they probably employ a handful of people and need auditors once a year, legal advice now and again and pay a bit of tax (assuming that they haven't done a sweetheart deal with the Office of the Revenue Commissioners but their contribution to GDP will be completely out of step with their genuine contribution to output.

Ireland made some hard decisions and seems to be coming out of the other side of the GFC pretty well but Irish output has not risen by 26% even if GDP has. GDP as a measure of output has some known limitations and this very clearly demonstrates some of them.

CLAPTON

Generali wrote: »

Ireland's GDP may have risen 26% but its output didn't rise by that amount.

This graph probably sums up the reality of Ireland's economic recovery far better:



If you're interested this is Irish consumption compared with the UK's since 2000:



A good example of what is going on is in aircraft leasing.

A Spanish airline Xyz Air sets up a company in Ireland, Xyz Air Leasing (Ireland) Pty Ltd, to lease planes to Xyz Air. Xyz Air Leasing (Ireland) buys a load of planes that are not made in Ireland that will rarely if ever fly in Ireland because the profits the company makes are taxed at 12.5% rather than because of any genuine desire to operate in Ireland.

The turnover of the company will be counted as part of Irish GDP but it is very hard to see how it adds that much to Irish output in any meaningful sense. Yes, they probably employ a handful of people and need auditors once a year, legal advice now and again and pay a bit of tax (assuming that they haven't done a sweetheart deal with the Office of the Revenue Commissioners but their contribution to GDP will be completely out of step with their genuine contribution to output.

Ireland made some hard decisions and seems to be coming out of the other side of the GFC pretty well but Irish output has not risen by 26% even if GDP has. GDP as a measure of output has some known limitations and this very clearly demonstrates some of them.

welcome back

Generali

CLAPTON wrote: »

welcome back

Thank you CLAPTON.