It has been particularly interesting listening to Finance Minister, Paschal Donohoe, talk about his plans for tax rates. He wants to reduce income tax on the ‘squeezed middle’. This is undoubtedly a laudable move. Excessive taxation cripples people, as too do excessive retail prices.
In Ireland, we have a vicious combination of excessive cost of living and a heavy burden of tax on the average person. To give you an example of this, the price of a typical basket of food in Ireland is on average 31pc higher than a similar basket in Germany, yet German and Irish wages are about the same.
Add to this the fact that, on average wages, the typical Irish person is paying over 40pc tax and it is quite understandable that most Irish people do not have any money left at the end of the month to bolster their savings.
Therefore, it is not surprising that the Finance Minister wants to reduce taxes. However, if he reduces taxes in one area, he will have to either raise taxes somewhere else or cut expenditure. The Fine Gael party wants to be all things to all men ahead of an election, so it won’t risk cutting expenditure. Thus, the minister’s objective looks impossible – unless we get significantly more growth.
More economic growth is the result of more spending and investing in the economy, and as spending and investing are taxed, taxes rise. Furthermore, as unemployment falls, income taxes rise too, and welfare spending falls, thus giving the State a virtuous cycle, where revenues are increasing. Such buoyancy allows the State to cut taxes without hitting expenditure and still balance the books.
This high-growth scenario is the Garden of Eden for all would-be reformist finance ministers. It also allows the luxury of integrated thinking. When your back is against the wall, it is difficult to see things clearly, but now that we are motoring, it’s possible for the minister and his officials to think a bit laterally.
One thing puzzles me and has done for a long time and it is this: why doesn’t anyone in the Government articulate coherently what exactly the plan is for the country, not just in terms of growth, but also in terms of fixing other problems? And why does no one link one with the other?
So, for example, why not link our industrial strategy with our housing strategy?
All around the world, small countries have big vision that identifies the industries and the strategies that they want to focus on which may facilitate growth and achieve other objectives. These always involve an industrial/commercial plan. These plans are usually integrated to address not just growth but to alleviate some other problems that the country may have. What is Ireland’s plan apart from low tax for multinationals?
Have we ever thought of integrating this plan with, say, a plan for housing and hit two birds with one stone?
Consider something as obvious as linking on-going generous tax breaks to multinationals that locate in Dublin with an obligation for those same multinationals to provide accommodation for their prospective employees; this is a bit of an “I scratch your back and you scratch mine” strategy.
MORE than 100 years ago, Guinness was doing precisely this by constructing the Iveagh Buildings all around the city; it is not revolutionary. As the rent returns to the mother company, it is actually a very attractive use of capital for the corporation, while at the same time making these companies better corporate citizens and embedding them in the city much more concretely.
For most multinational companies, the attraction of Ireland is two-fold. The first is the tax breaks; the second is access to potentially the best micro workforce available in the 500 million-strong population of the EU. If Ireland (and for the moment we are really talking about Dublin) can host the best European talent, then American capital will continue to flood here. This is actually much more important than the tax breaks because the single biggest factor holding back corporations is talent, not capital. In a world of almost zero interest rates, capital is cheap; people are expensive.
Ireland can host these people who are coming from other European countries as well as India and other parts of Asia, provided we can house them. The latest census figures, released this week, revealed that Ireland is a cultural melting pot. The problem is rents and taxes.
Taxes are too high and rents are too high. If we want to capitalise on Brexit and become the location of choice for English-speaking commerce within the EU, then we have to sort both of these. The commercial future for Ireland is to turn itself into a trading hub, not unlike urban Shanghai in the period 1890 to 1940, when Shanghai was a free-trading city, linking China with the rest of the world. Venice did something similar in the 1500s, as too did the Hanseatic ports of the Baltic before that.
An obvious way would be to jump together with global companies and outline a 30-year plan where we pledge to keep corporation taxes low, and keep our doors open to European talent. In return, they undertake to use their burgeoning balance sheets to do as Guinness did and build infrastructure for their precious employees. Initially, Dublin would be the epicentre of this, but with an upgraded motorway and higher speed transport, there’s nothing to prevent urban centres like Cork, Limerick, Galway, and Waterford benefiting hugely.
It’s time to see the country as one small unit in a globalised world where for most foreigners the distances between our major cities are commutes, not journeys.
We could be on the cusp of something very big, all we need is to open our arms to the world, make the place welcoming, and give the world a plan for Ireland.
In that context, the minister’s plans for tax would appear very achievable and frankly a little unambitious.
The obvious reasons why a national business model is not articulated are that either: a. those in Min Fin and Dept of Taoiseach best positioned to develop one lack the ability to do so, perhaps because of conflicting lobbying by US MNC’s and the EU Commission b. concern about openly stating what is in fact the operating business model, due to the aggressive response it would provoke from the EU and other states. I think b. is the true reason. The Irish business model is to mortgage its tax sovereignty to attract US MNC’s to the jurisdiction. They then employ… Read more »
“To give you an example of this, the price of a typical basket of food in Ireland is on average 31pc higher than a similar basket in Germany” – and, one has to add, this doesn’t even include the cost of renting, which is twice as high in Ireland as in Germany. Add all of these difference in a typical basket, plus compare the cost commuting to work (the price of monthly integrated public transport ticket in Berlin is €80; the price of monthly integrated – well, sort of integrated – public transport rambler ticket in Dublin is three times… Read more »
Subscribe.
https://www.amazon.com/Seasteading-Floating-Environment-Liberate-Politicians/dp/1451699263/ref=as_li_ss_il?_encoding=UTF8&qid=1508077592&sr=8-1&linkCode=li3&tag=joejarme-20&linkId=f14caef7998985948cba2dacd8f97f97
Seasteading may be the way of the near future. It is far easier and more practical than settling space. City states with minimal government and hotbeds of entrepreneurship. People ebbing and flowing to where their interests are best realized.
I am not sure if the mncs will participate in it. They are here to grab as much as they can for themselves. A better strategy would be better planning. And in that department, the Institutional state has prven highly effective as a bottleneck on economic agility, and performance with respect to the private sector workforce. The wagon-wheel design of the bus system in Dublin being an obvious example. The restrictions on urban development in an urban area, being an even more concerning example. With Eamon Dunphy type protesting against apartments being built in most desirable living zone on the… Read more »
To borrow a quote from Canadian Academic, Jordan Peterson….Irelnad…”you need to sort yourself out”.
It appears to me that official Ireland is in denial, and is refusing to sort anything out.
Too busy maintaining pretence behind expensive showcases like Conference Centre (the Cowen can) and the rebuilt inspiration for concussion centre in Landsdowne road.
Lots of things are over-rated in this article : e.g. the physical [ understood ] + investment enormity needed to solve the home crisis High-rise [ 20 storey ] spacious actual condominium blocks [ terraced storeys / stepped storeys is what is required ] as part of condominium villages with all the typical services needed in normal village also built-in to the scheme can be built : very soundly + cheaply + quickly by : Communism Business Model ; State doing so solely involving : National Service — physical if capable — by all : Public Service especially Army ;… Read more »
Joined up thinking.
The solution is simple and it’s out there.
The government and top brass in the civil service needs to identify the join up thinkers already on their books and then start promoting them to positions of influence.
“Laura Byrne Retweeted
Laura Byrne? @LolsyByrne 3 hours ago
I DON’T KNOW HOW TO PREPARE FOR HURRICANE OPHELIA I STUDIED MACBETH FOR THE LEAVING CERT HELPPPPP”
Something we do know that all the political parties + the permanent government [ The Civil Service ] + “The Deep State / The Hidden State” of The Irish State have in their plan is furtherance of LBGT agenda, incl. LBGT Parades . e.g. . . https://twitter.com/MarkACollett/status/919476184035061761 . . Seriously, a nation should be sourcing enterprise from its own people primarily ;. And, u ain’t gonna keep the best of native Industrialists & Entrepreneurs when they reflect that their own nation are but[t] deviants. The greatest of industrialists & Entrepreneurs mostly had as prime motivation in their plans, for their… Read more »
And, now Just-in “Fake” True dew [ Son of Fidel Castro ? ] is stipulating that bending over for LBGT stuff be pre-condition for International Trade Agreements ;
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https://twitter.com/HenryMakow/status/919644963973017600
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Does Varadakar have a plan to save our asses from that agenda ?
Very recently DMW bemoaned basically : X] excessively high “common” taxes ; e.g.s VAT Customs Excise Levies Y] excessively low “sector” taxes ; e.g.s Annual taxes [ e.g. Rates ] on Property ; Especially allegedly “under-used” property . income tax ; vis. excessively low income tax on super high earners . ………………………………………………… . As solution for the above, DMW propounds the opposite . ……………………………………………….. . Sounds a touch Communist to me And, I say this even though I have as option a taxation model which might be classed as even more Communist ; Although, it novel & not in current… Read more »
Irish Tax v EU Tax The demand by the EU to harmonise taxation among the members in Europe will be difficult. Unlike mainland Europe there are inconsistencies and misunderstandings of what constitutes the meaning of the word ‘Taxation’ in Ireland. On the mainland taxation is meant to mean an operative process ‘to charge/levy’ and it’s origins can be found in Latin ‘taxare: to charge’. In Ireland it is a very different matter. To complicate that, their finance acts use two separate words that have two different meanings ( not contested) . There are no simplifications to justify that both words… Read more »
If there was anything to strengthen my doubts about the Irish media unable to do up-to-date reporting, it is this tilly bit of news from this hour: The Irish Times says that there are 360,000 people without electricity: https://www.irishtimes.com/news/environment/hurricane-ophelia-three-dead-and-360-000-without-power-as-monster-storm-hits-1.3257434 While the Taoiseach and The Sun say that there are 100,000 people without electricity, in an article with a headline that 22,000 are: https://www.thesun.ie/news/1674768/taoiseach-says-ophelia-being-treated-as-national-emergency-as-22000-across-ireland-without-power/ I know that the latter article is written earlier and the former later, but they are posting it as of this hour and you cannot get it wrong by 260,000 and still pretend that you are the… Read more »
A Jihadists sentenced for terrorism given high profile job in London Council:
http://www.express.co.uk/news/uk/864401/terror-london-jihadi-suicide-bombers-council-job-southwark-Mulumebet-Girma
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http://www.ibtimes.co.uk/angela-merkel-minister-wants-muslim-festivals-be-public-holidays-germany-1643111
No comment on that
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Nordrhein-Westfalen suffers from the scabies epidemy. The hospital in Bonn had to close one of its departments because of it. The dermatologist from this hospital says that before 2015, there were no scabies cases in his department. Nordrhein-Westfalen is the land that has taken most “refugees”.
https://www.welt.de/regionales/nrw/article169617591/Bonner-Krankenhaus-schliesst-ganze-Station-wegen-Kraetze.html
Do you know what? I think it’s because of the Poles – it must be!
From Micheál Ua Chiarmhaic Cuathán na Sceilge On stormy nights you could hear the rafters knocking, the wood creaking with the force of the strong gusts of wind. It is many a hurricane moving in from the Skellig to the west that destroyed these same houses. I had a bed up in the back-loft and my father often woke me in the middle of the storm to tell me to hurry down for fear the house would be knocked down. You would hear the big gusts of wind approaching one after another like waves of the great sea. There were… Read more »
And so, the Irish State must always know its “friend” across the water ;
Britain.
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And, here is a useful handle on “The Frankfurt School” + “Champagne Socialist” Labour Party ;
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https://labour25.com/
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Now, knowing that the Irish State are copying the sinister policies of the British establishment, should we not consider that our political parties & our civil service too is riddled with P-E-D-O-P-H-I-L-E-S too ?
Budget is only a guide to :
1.
cutting spending
2.
obtaining income
3.
spending
Any of elements 1., 2., & 3. of the guide can permissibly be over-stepped
And, so, how about without further delay proceed to cut wasteful & very destructive spending as revealed by the one-&-only Camilia Paglia [ a Bi-sexual woman herself ] ? ;
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https://twitter.com/HenryMakow/status/919921809612525568
corruption is endemic. “As the mainstream media continues to obsess over $100,000 worth Facebook ads allegedly purchased by Russian spies in 2016 seeking to throw the presidential election, we’re almost certain they’ll ignore the much larger Russian bombshell dropped today in the form of newly released FBI documents that reveal for the very first time that the Obama administration was well aware of illegal bribery, extortion and money laundering schemes being conducted by the Russians to get a foothold in the atomic energy business in the U.S. before approving a deal that handed them 20% of America’s uranium reserves…and resulted… Read more »
“Silver coin proposal discussed on Mexican TV by Salinas Price”
http://plata.com.mx/enUS/More/330?idioma=2
“Hugo Salinas Price Interview, October 14, 2017, in Mexican TV Channel ADN40, speaking about his campaign to introduce the Libertad One Silver Ounce into circulation, as a vehicle for savings of the common folk.”
“The commercial future for Ireland is to turn itself into a trading hub” TRANSLATION -> WE MUST BE PROSTITUTE OUR NATION -> SO CORPORATIONS CAN MAKE BIGGER PROFITS -> BY BRINGING IN AS MANY NON IRISH AS POSSIBLE -> SO CORPORATIONS CAN MAKE EVEN BIGGER AND BIGGER PROFITS -> BY PAYING US LESS AND LESS -> THROUGH MORE ZERO HOUR CONTRACTS -> AND WE IF WE ARE LUCKY -> WE CAN AFFORD TO LIVE IN A CHEAPLY MADE CARDBOARD HOUSE @David McWilliams -> IS BEING A HUB FOR CORPORATE PROFIT OUR ONLY REASON FOR EXISTENCE? -> IS THERE ANYTHING THAT… Read more »
EDITORIAL, STAFF NEWS & ANALYSIS
Bring Out The Gimp: Everybody Loves Hitler
By Peter De Boer – October 18, 2017
http://www.thedailybell.com/news-analysis/bring-out-the-gimp-everybody-loves-hitler/
Everybody loves Hitler.
Hitler is a one-size-fits-all kinda guy. He’s always on time, never complains and works for free. The perfect Government stooge.
Have doubts about free-for-all immigration?
Annoyed by militant feminism?
Believe in traditional values?
Not seduced by Socialism?
Got no love for Sharia law?
Why, you must be a Nazi.
It’s simple.
Post 1986, house prices in Dublin have increased by a multiple of 12.Multiculturalism means half a million Irish adults live with parents. What a joke. Next crash within two yrs.
The best and only real option for the Master plan is to revoke the odious national debt. Then leave the “Odious European Union” and their bureaucratic controls over the peoples. Then reclaim the 200 mile continental shelf economic zone and get rid of the predatory EU claims on that zone. Then revoke all assumed bankers’ illegal debt that is added to the national debt. Then close the central bank. Then establish a new sovereign currency issued directly from Treasury. Then govern in the interests of the people in the fashion of Iceland which with its small natural resources and fishing… Read more »
https://www.wsj.com/articles/first-they-came-for-the-biologists-1506984033
“However, you might not be aware that Central Banks outside of the U.S. continue printing money that is being used to buy stocks and risky bonds. The Bank of Japan now owns more than 75% of that nation’s stock ETFs. The Swiss National Bank holds over $80 billion worth of U.S. stocks, $17 billion of which were purchased in 2017. The European Central Bank, in addition to buying member country sovereign-issued debt is now buying corporate bonds, some of which are non-investment grade.”– “This dynamic is the direct result of the money printing and credit creation which has enabled the… Read more »
Claiming credit for the “lowest unemployment rate” will likely come to rebound as the current rate is still 22%. Truth will(eventually) out.
http://www.shadowstats.com/alternate_data/unemployment-charts
The US labour participation rate is the lowest in many years.
https://tradingeconomics.com/united-states/labor-force-participation-rate
Any minister of finance has to have reliable statistics. Based on the US ones here they are nothing but deceit and lies. I suspect this is a widely disseminated problem.
The first thing to do in any government is to stop lying to the people and return to honest moral practices.
“The Fine Gael party wants to be all things to all men ahead of an election, so it won’t risk cutting expenditure. Thus, the minister’s objective looks impossible – unless we get significantly more growth.” DMcW Surely it is Pascals duty to make financial decisions based on logic and data rather than politics. Elected TD’s have a duty of care to the greater public good. Tv3 TONIGHT SHOW 5 jan 2017 ( still on tv3 player) – Dr James Gray and Martina Harkin Kelly told us that Ireland have 10,000 hospital beds less than the oecd average. Ireland has 15000… Read more »
Decentralising food production has many healthy outcomes.
good food
Good exercise
Good health.
http://www.thedailybell.com/news-analysis/latest-fear-mongering-about-self-sufficiency-salmonella-in-backyard-chickens/
The state of affairs in a progressive state.
A fifth-generation Californian laments his state’s ongoing economic collapse.
A primer on what NOT to put in the budget.
https://spectator.org/adios-california/?utm_source=American+Spectator+Emails&utm_campaign=6e1b467cf4-EMAIL_CAMPAIGN_2017_10_20&utm_medium=email&utm_term=0_797a38d487-6e1b467cf4-104365713
Bitches in Heat !
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https://www.lifesitenews.com/news/pro-abortion-feminists-deface-catholic-cathedral-with-burning-trash-paint-a
Coming here ?
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DO WE HAVE A PLAN ?
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https://www.rt.com/uk/407082-homelessness-poverty-councils-england/
Trump talks to Widow of serviceman killed in Afghanistan.
https://www.youtube.com/watch?v=78Dr37eHvgk&feature=player_embedded
100% David…
Show ambition is the title of the piece. The people who print money have ambition alright; Hi David, I was thinking of another question in this case a true or false type one for your next economics paper in trinity; Q; The price of the S&P 500 doubled between June 2010 and June 2016 give or take a few point. US economic output hasn’t double in that period of time not even close. It was twice as expensive price wise to by a share in an ETF based on the S&P 500 in June 2016 than it was June 2010… Read more »