Thanks guys. You gave the SF populist narrative around unfairness of the tax system a good kicking there. Well done.
It’s just a shame that you’re probably preaching to the converted. You only listen to your podcast if you have an appreciation for economics, and if you have an appreciation for economics it’s difficult to justify voting for a party who pledged to build 100k houses for just €6.5bn in their 2020 general election manifesto. You can’t be interested in economics and believe that crap at the same time.
Meanwhile the younger SF voter instead of listening to the podcast consumes a video on social media proclaiming that it’s the greed of the wealthiest in society that’s to blame for their societal problem of choice, as worked out by the app algorithm.
Thanks. Agreed - for all sorts of reasons I don’t expect to change any/many minds. But that doesn’t mean we should give up. Indeed, one of the key reasons for SF’s success is that so many of us have given up. We have conceded, without a fight. Time to fight back, even if the cause is hopeless.
Hi guys enjoy the pod a lot. A question I'd have and something I'd like to hear discussed, is why is Ireland so reliant on social transfers in the first place? Seem very much to me that the two speed economy is a big issue - hospitality/tourism in particular is a sector that pays predominantly low wages, which effectively has to be subsided by high wage parts of the economy such as the multinational sector.
Not sure if there is (yet) a convincing answer to your question. Could have something to do with high-pay multinational sector. If that is compared to pay in 'domestic' sector, that's always gonna make Ireland unequal compared to other countries - unless Ireland has higher domestic pay than other countries, which we are pretty sure it does not. So the question should be: does Ireland have OECD average pay in its domestic sector or not? I haven't looked for data on this for a while so am not sure of the answer. But it is where the questions starts.
Hi Will. I’ve a theory on this and I’ve absolutely nothing whatsoever to back it up. :-)
Laffer curve. I wonder how many “comfortable” people there are in the workforce who don’t have the necessity to either work more or seek higher wage employment. Part of why they are so comfortable is because part time workers and the lower paid are not taxed very much at all, and they see the more stressful higher income jobs as simply not worth their while. Whereas if they were rewarded more for working more the gross of tax income inequality would be less. Just a thought.
We are on a short break - Jim is in the States. Was thinking about doing a sol run, just me, maybe for half the length of usual time. Not sure it would work, or maybe just take that break. Any views?
Hi guys, excellent podcast. I very much agree that facts do not seem to matter in Ireland and whilst I do not generally like criticising media I have come to the conclusion that mainstream Irish media do not generally challenge the economic policies of SF, PBP etc and seem incapable of reasonable economic comparisons of SF/PBP leftist policies with leftist populists in other countries. For example, the policies proposed by SF are even more extreme than those in Latin American countries led by leftist politicians, yet you would never hear the Irish media suggest that there is anything worth querying about the SF approach or what it might mean for the Irish economy - quite the opposite in fact. Sinn Féin's rhetoric and divisive approach is very similar to that of populist governments led by leftists such as Maduro in Venezuela, Obrador in Mexico and Castillo in Peru and the recently elected president of Chile, Gustav Petro. Logically, inward foreign investment has declined upon the election of Maduro, Obrador and Castillo and experience suggests the same will happen with Petro.
As for Ireland, if we end up with a leftist Sinn Fein led government after the next election, with all its planned new taxes on capital, employers, higher earners and private wealth, it is clear from my conversations with investors that there will be a negative impact on our economy. Investment capital is mobile, especially from a small open highly-globalised economy. The SF tribe of supporters/voters will not notice/care and everything negative will be blamed on the previous government. Economists and centrists will try to explain the truth, as we do vis-a-vis the UK's nonsensical Brexit, but as Chris says the politics of populists and their followers is to double down and stick with your tribe.
Finally, you might be interested in the letter I sent to the Irish Times last week prior to your podcast. My point within is to outline the issues we face heading into and following the next general election and to explain some facts to those who might still be interested.
Thanks Mark - good letter in the ITimes. I find it all quite strange - almost a sullen acceptance that SF's time has come.It's as if the fight has gone out of the other parties. The ITimes doesnt help with Fintan and Una daily telling us that Ireland is a dystopian hell-hole.
Thanks Jim and Chris - enjoyed the discussion on the distributive nature on our income tax system. Like others I would welcome a deep dive into our tax and social welfare system and I appreciate the complexity of this. Two questions to raise;
1. Is it possible to discuss the value gained from our tax payments? I appreciate value is a complex term but when people appreciate/understand value, they can 'see' what their taxes are paying for (from public services to social transfers)
2. In discussing the tax system, looking beyond salary/wages to income from assets - you referred briefly to a wealth tax (linked to property) but could the tax system drive change in other areas for the betterment of society (one example - reducing land hoarding for building new houses). In reference to Wills point below on a two track society- another version is those people who get income through assets rather than salary/wages.
Sorry for the ramble but wanted to raise the two points. For me the value perspective hasn't been looked at. Cheers
Thanks Richie. Your first question is really about efficiency in the public sector. At least two questions arise. First, can the service provided by the public sector be done (at all) by the private sector? If the answer is yes, then we should simply go with the cheapest option, subject to strategic/security concerns. If the necessary service can only be provided by the public sector then we need a way of measuring 'value for money', fraught with politics, fraught with subjectivity. Audits of various kinds are done of course.
Vacant land taxes are a good idea. More generally, taxing of 'economic rents' is a good idea. You don't want to end up like the UK where your water company executives earn £3m a year - that's an economic rent that should be taxed at 99.9%
Thank you for your use of facts. What I find frustrating is that most media do not call the political parties out for their lack of facts and do not use facts in their commentary, they are only interested in bad news stories. Listening to the media listing and complaining about our problems with either no facts or no context to the facts and usually not even debating the solutions is disheartening and potentially very dangerous. Keep up the good work
Great Pod as usual - I look forward to a deep dive on populist approach to hard economic data and statistics on your written substack - enjoy the break Jim
Looking at this OECD report - Denmark doesn't have any Social Security contributions for employees or employers - Seems a lot more straightforward and clearer for everyone to understand rather than needing to keep PRSI/ USC numbers in mind + tax credits.
Yes, Denmark is a good benchmark in many ways. Many people are surprised at its labour market policies. And yes, there is a good case for arguing that tax and social security contributions should be integrated - tax systems are way too complicated and are ripe for simplifying reforms.
Thanks guys. You gave the SF populist narrative around unfairness of the tax system a good kicking there. Well done.
It’s just a shame that you’re probably preaching to the converted. You only listen to your podcast if you have an appreciation for economics, and if you have an appreciation for economics it’s difficult to justify voting for a party who pledged to build 100k houses for just €6.5bn in their 2020 general election manifesto. You can’t be interested in economics and believe that crap at the same time.
Meanwhile the younger SF voter instead of listening to the podcast consumes a video on social media proclaiming that it’s the greed of the wealthiest in society that’s to blame for their societal problem of choice, as worked out by the app algorithm.
Thanks. Agreed - for all sorts of reasons I don’t expect to change any/many minds. But that doesn’t mean we should give up. Indeed, one of the key reasons for SF’s success is that so many of us have given up. We have conceded, without a fight. Time to fight back, even if the cause is hopeless.
Hi guys enjoy the pod a lot. A question I'd have and something I'd like to hear discussed, is why is Ireland so reliant on social transfers in the first place? Seem very much to me that the two speed economy is a big issue - hospitality/tourism in particular is a sector that pays predominantly low wages, which effectively has to be subsided by high wage parts of the economy such as the multinational sector.
Not sure if there is (yet) a convincing answer to your question. Could have something to do with high-pay multinational sector. If that is compared to pay in 'domestic' sector, that's always gonna make Ireland unequal compared to other countries - unless Ireland has higher domestic pay than other countries, which we are pretty sure it does not. So the question should be: does Ireland have OECD average pay in its domestic sector or not? I haven't looked for data on this for a while so am not sure of the answer. But it is where the questions starts.
Hi Will. I’ve a theory on this and I’ve absolutely nothing whatsoever to back it up. :-)
Laffer curve. I wonder how many “comfortable” people there are in the workforce who don’t have the necessity to either work more or seek higher wage employment. Part of why they are so comfortable is because part time workers and the lower paid are not taxed very much at all, and they see the more stressful higher income jobs as simply not worth their while. Whereas if they were rewarded more for working more the gross of tax income inequality would be less. Just a thought.
Yes - go for solo Chris ... so many things are happening ... it would be a shame to miss out altogether.. 25/30 mins ... a lot could be said
You know you want to!! 🤣
Thanks for the vote of confidence -will probably put it up tomorrow. Hope I didn’t spoil your walk!
Thanks Chris - Look forward to your opinions
Had to listen to music on this morning walk … so not spoilt at all 👍
Aug 27th
Missing my weekly catch-up on all things economic, political & social ... looking forward to a punchy next podcast!
We are on a short break - Jim is in the States. Was thinking about doing a sol run, just me, maybe for half the length of usual time. Not sure it would work, or maybe just take that break. Any views?
Hi guys, excellent podcast. I very much agree that facts do not seem to matter in Ireland and whilst I do not generally like criticising media I have come to the conclusion that mainstream Irish media do not generally challenge the economic policies of SF, PBP etc and seem incapable of reasonable economic comparisons of SF/PBP leftist policies with leftist populists in other countries. For example, the policies proposed by SF are even more extreme than those in Latin American countries led by leftist politicians, yet you would never hear the Irish media suggest that there is anything worth querying about the SF approach or what it might mean for the Irish economy - quite the opposite in fact. Sinn Féin's rhetoric and divisive approach is very similar to that of populist governments led by leftists such as Maduro in Venezuela, Obrador in Mexico and Castillo in Peru and the recently elected president of Chile, Gustav Petro. Logically, inward foreign investment has declined upon the election of Maduro, Obrador and Castillo and experience suggests the same will happen with Petro.
As for Ireland, if we end up with a leftist Sinn Fein led government after the next election, with all its planned new taxes on capital, employers, higher earners and private wealth, it is clear from my conversations with investors that there will be a negative impact on our economy. Investment capital is mobile, especially from a small open highly-globalised economy. The SF tribe of supporters/voters will not notice/care and everything negative will be blamed on the previous government. Economists and centrists will try to explain the truth, as we do vis-a-vis the UK's nonsensical Brexit, but as Chris says the politics of populists and their followers is to double down and stick with your tribe.
Finally, you might be interested in the letter I sent to the Irish Times last week prior to your podcast. My point within is to outline the issues we face heading into and following the next general election and to explain some facts to those who might still be interested.
https://www.irishtimes.com/opinion/letters/2022/08/13/taxation-policies-in-a-time-of-uncertainty/
Thanks Mark - good letter in the ITimes. I find it all quite strange - almost a sullen acceptance that SF's time has come.It's as if the fight has gone out of the other parties. The ITimes doesnt help with Fintan and Una daily telling us that Ireland is a dystopian hell-hole.
Thanks Jim and Chris - enjoyed the discussion on the distributive nature on our income tax system. Like others I would welcome a deep dive into our tax and social welfare system and I appreciate the complexity of this. Two questions to raise;
1. Is it possible to discuss the value gained from our tax payments? I appreciate value is a complex term but when people appreciate/understand value, they can 'see' what their taxes are paying for (from public services to social transfers)
2. In discussing the tax system, looking beyond salary/wages to income from assets - you referred briefly to a wealth tax (linked to property) but could the tax system drive change in other areas for the betterment of society (one example - reducing land hoarding for building new houses). In reference to Wills point below on a two track society- another version is those people who get income through assets rather than salary/wages.
Sorry for the ramble but wanted to raise the two points. For me the value perspective hasn't been looked at. Cheers
Thanks Richie. Your first question is really about efficiency in the public sector. At least two questions arise. First, can the service provided by the public sector be done (at all) by the private sector? If the answer is yes, then we should simply go with the cheapest option, subject to strategic/security concerns. If the necessary service can only be provided by the public sector then we need a way of measuring 'value for money', fraught with politics, fraught with subjectivity. Audits of various kinds are done of course.
Vacant land taxes are a good idea. More generally, taxing of 'economic rents' is a good idea. You don't want to end up like the UK where your water company executives earn £3m a year - that's an economic rent that should be taxed at 99.9%
Thank you for your use of facts. What I find frustrating is that most media do not call the political parties out for their lack of facts and do not use facts in their commentary, they are only interested in bad news stories. Listening to the media listing and complaining about our problems with either no facts or no context to the facts and usually not even debating the solutions is disheartening and potentially very dangerous. Keep up the good work
Great Pod as usual - I look forward to a deep dive on populist approach to hard economic data and statistics on your written substack - enjoy the break Jim
As usual, great listening.
Thanks Shane
Looking at this OECD report - Denmark doesn't have any Social Security contributions for employees or employers - Seems a lot more straightforward and clearer for everyone to understand rather than needing to keep PRSI/ USC numbers in mind + tax credits.
https://www.oecd.org/tax/tax-policy/taxing-wages-ireland.pdf
Yes, Denmark is a good benchmark in many ways. Many people are surprised at its labour market policies. And yes, there is a good case for arguing that tax and social security contributions should be integrated - tax systems are way too complicated and are ripe for simplifying reforms.