Irish economy/austerity effects

Fianna Fáil (indeed) are apparently having a hard time after their pimpin’ austerity programmes:
http://www.rte.ie/news/election2011/results/index.html
A percentage loss of 24% and likely an even bigger loss in seats. They got 81 of 165 last time around.

On a side-note, it’s pretty cool to follow an election that uses STV.

So briefly glancing over the parties wikipedia pages it seems the irish are dramatically swapping one centrist grouping for an ever so slightly more right wing centrist grouping.

Is that about accurate Irish board members?

EDIT: Though looking at the current results I’m guessing a coalition with labour might also be on the cards.

Final results are trickling in, and it seems Fianna Fáil is down 75% in seats to 20 from last election. Labour almost doubled their representatives to 35-40, and Fine Gael went up from 51 to 70-75.
Sinn Fein also had a pretty good election.
What this means policy-wise you’ll have to ask the Irish about, but that was one hell of an electoral slaughter.

So it looks like Fine Gael will probably have to form a coalition with Labour to make a stable government. The other potential partners look like they will be too small, too discredited or, I suspect, too disparate (independents) to form a decent size coalition.

At this point it’s hard to say. If they had achieved enough of a majority to form a government without anyone else, Fine Gael’s policies would be more or less the same as Fianna Fail’s. The existence of two centre-right parties in Ireland is sort of a quirk of history - both parties have their origins in the original Sinn Fein, which split over their issue of The Treaty (the same treaty that precipitated the Irish Civil War in 1922). The pro-treaty side became Fine Gael, the anti-treaty side became Fianna Fail and the Civil War has influenced Irish politics ever since. So really, in respect of ideology and fiscal policy, neither party is a million miles apart.

Fine Gael are going into coalition with Labour, who are centre-left, so what we’ll end up with in respect of policies is going to be a left/right compromise. Fiscally, I would expect to see more of the same. They’ve been making noises since before Christmas about re-negotiating with the IMF/ECB but based on what the IMF have themselves been saying over the past few days it looks like that might be something of a moot point (the IMF are talking about restructuring the terms of the bailout anyway).

To be honest, I’m more interested in the social/political reforms that both parties were talking about during the campaign.

Interesting, kind of sounds like the strange effects of the Civil War on US party politics.

Political Reform? I doubt it.
I also don’t see Enda Kenny as being the type of personality to go to Europe and
A) Defend our corporation tax vigorously(as for some reason Merkel and Sarkozy seem to think something other than effective corporate tax rate is important?)
B) Try to renegotiate a different deal when it comes to the rescue package as part of a wider European initiative.

I just can’t see the new government achieving anything more than FF could have, which is a shameful condemnation on just how lacklustre our politicians are.

Keeping up the tax haven while actually paying the bills of a modern society…tough nut to crack.

The Estonian government, on the other hand, seems to have managed to survive the crisis quite well. I guess they’re willing to take the cuts.

Are we a tax haven, having a 12.5% corporate tax rate? Merkel and Sarkozy et al are missing the point anyway - Ireland’s low corporate tax rate isn’t stealing Google and Amazon and so on away from Germany or France, it’s stealing them away from places like Singapore and India. Besides which, how exactly does making Ireland uncompetitive for multi-nationals to become established in help us pay our debts?

It’s a nominal 12.5% rate that becomes an effective 0% for any multinational able to jump through some fairly trivial hoops. When my last office (a division of France Telécom) moved to Dublin in 2007, the fact that we could pay no corporate tax at all was a big part of the decision to relocate from Paris.

I remember seeing a study on Corporate Tax Rate’s in Europe vs how much of a country’s GDP was made up from foreign MNC’s - strangely corporate tax rate had little to no effect on it.

Also, let’s look at the effective coporate tax rate in European Countries:

While there are tax loopholes in the Irish system that I wouldn’t have a problem with being closed, attacking our nominal coporate tax rate is disingenuous. The fact that Merkel and Sarkozy think nominal tax rate actually means anything is laughable, and goes to show just how little the leaders of two of the largest countries in Europe know(and how little their advisors do too).

I didn’t say it was an isolated problem.
Lack of tax income across western nations is making things hard, and do you REALLY want to compete with India for tax and workers rights?

That the rich can benefit from modern societies, yet move their cash to tax havens is criminal.

Same source, total tax rate:

Hong Kong, China 24.1% 18.7% 5.3% 0.1% 24
Singapore 25.4% 7.4% 14.9% 3.1% 28
Canada 29.2% 9.8% 12.6% 6.8% 37
Switzerland 30.1% 8.9% 17.6% 3.6% 41
United States 46.8% 27.6% 10.0% 9.2% 124
Australia 47.9% 25.9% 20.7% 1.3% 127

I’m not going through the methodology behind that graph, but I think it’s looking at the pure income tax figure, and excluding a lot of other figures. And it doesn’t take into account our higher tax rate for earners over €40,000.

Income tax is:
20% low/44% high

Pay Related Social Insurance from the employee:
4% low/8% high

Pay Related Social Insurance from the employer:
10% flat

Universal Social Charge
4% low/7% high

So for low earners you’re talking a total of roughly 28% from the employees paycheck and 10% that the employer has to contribute.

For high earners you’re talking a total of roughly 59% from the employees paycheck and 10% that the employer has to contribute.

And on top of all that, most of our tax is paid by high income earners, so raising the lower rate has little effect.

A lot of guides that look at our tax system at worst seem to only look at the low level pure income tax, while ignoring the high level. And at best they exclude the additional taxes that are in effect an income tax but aren’t nominally an income tax. And that’s before you get into standard taxes equivalent to your sale tax (ours is Value Added Tax) of 20%+, and motor tax, stamp duty, capital gains tax, other duties, carbon levy, etc…

If you think labor taxes end up being paid entirely by the employee (which most economists do, I gather) than those don’t really count.

Was that in response to me? If it was it went completely over my head, I have no idea what you’re saying.

What he’s saying is that there really aren’t any employer paid labor taxes because any tax paid by the employer really just comes from reduced compensation to the employee. At least that’s what I think he’s saying…

Ok…

I can understand that it weighs in as a factor in what the employee is paid, but so does any other cost, like health insurance, subsidised canteen/gym/travel. That doesn’t mean it isn’t paid. People don’t have to suffer from a tax for it to be a tax.

And more than that, I was responding to the idea that income tax is low. When in reality, there are more factors to it than simply the lowest base rate that even excludes all the other taxes levied on “income.”

The theory is that in a competitive labor market, if the government mandates “you must pay a tax equal to X% of the employee’s salary” that’s basically identical to a mandatory wage increase, so after it all works out it just increases labor costs; the employers don’t really “pay” any of it. Again assuming competitive market, this doesn’t raise overall employee compensation; it just rearranges it from cash to tax.

So assuming all that, including labor taxes (which have no impact on profits) right next to profit taxes and regulation (which do impact profits) gives a really misleading picture in terms of how easy it is to start or run a business.