Category Archives: Articles for SIPTU’s Liberty

“Death, taxes and childbirth! There’s never a convenient time for them.” – Margaret Mitchell, Gone with the Wind, 1936

It is hardly controversial to suggest that rational people prefer to pay less tax rather than more, assuming all else is equal. If one follows the public debate in Ireland, however, it soon becomes clear that rationality is not universal on fiscal matters.

As the government struggles to bring the budget deficit under control, and as we are in a phase of increasing rather than stable or falling taxes, this is all the more pertinent. What is at issue, from the government’s perspective, is how to distribute and minimize citizens’ inevitable displeasure at rising taxes.

All taxes are not created equal, it would appear. What you pay tax on, and how you pay it, seems to matter a great deal,  perhaps even more so than the extent to which taxes hit our pockets. Continue reading →

Perhaps the single best decision made by Charlie McCreevy as Minister for Finance was the establishment in 2001 of the National Pension Reserve Fund (NPRF). In addition to proceeds from privatizing Eircom, 1% of GNP was to be channeled annually into an investment fund dedicated to financing public service pensions from 2025 onwards.

Not only was the NPRF a sensible exercise in counter-cyclical fiscal policy, – in marked contrast to the habitual “If I have it, I spend it.” approach – it was a hefty down-payment on the otherwise unfunded public service pension liability.

Unfortunately, the best laid economic plans didn’t survive contact with Ireland’s world-beating banking crisis, the final bill for which will likely come in between a third and half of current national income. Continue reading →

If one accepts the definition of insanity as doing the same thing over and over again, and expecting different results, then surely re-doubling belt-tightening austerity, and expecting growth, is economic lunacy?

The only part of the Irish economy that is growing in any meaningful sense is our record-breaking trade surplus. Overall, the economy can only grow if this is enough to offset the opposing contractionary forces of fiscal austerity and inconspicuous consumption. Continue reading →

“It’s the economy stupid” was the maxim that propelled Bill Clinton to office in 1992. Clinton is a big believer in Ireland’s recovery story, but when he visited last year his chief caveat was on personal debt.

With what must have sounded like music to the ears of the many Irish people drowning in debt, he said that writing down personal debt more aggressively would speed recovery. Many activists and economists are in agreement on this, and the IMF recently weighed in with its support. Continue reading →