Why is Ireland drowning in cash? Why is the UK not? The connection between low UK growth and the blow-up in the government bond market.
An appeal to Ireland: draw the obvious lessons about what happens when you elect a bunch of populist headbangers to government.
The Tories are now ungovernable. Maybe the UK is as well.
https://play.acast.com/s/the-other-hand-with-jim.power-and-chris.johns/substack%3Apost%3A75460958
In our latest Podcast we trace the links between the multi-decade withdrawal of the UK pension fund industry from its primary function - supplying long term capital to the economy. That’s one of the reasons why the new UK chancellor doesn’t have any money.
By contrast, the Irish government is awash with cash. Already, last week’s budget projections look to be conservative. Let’s hope it stays that way. Britain, unlike Ireland, now looks to be ungovernable. At least the Tory party is. That’s at least partly a reflection of the country at large.
An appeal to Ireland: draw the obvious lessons about what happens when you elect a bunch of populist headbangers to government.
Hi, this podcast isn't appearing on google podcast app for some reason? C
Jim, Chris – super podcast; very informative. Regarding Ireland making the same mistakes as the UK, Ireland’s mistakes will be worse as we know that business, investors and wealth fear far left populists even more than far right populists and so they will leave Ireland in their droves. If Sinn Fein, People before Profit, supported by Labour and the Soc Dems get into government they will roll out the SF taxation plans in full – I have no doubt about that. Sinn Fein’s budget Budget 2022 and Budget 2023 documents show they will hit higher earners, wealthy people and businesses hard - they confirm they will introduce an additional 3% tax on incomes above €140,000, remove tax credits on incomes above €100,000, significantly increase Employers’ PRSI, reduce the Standard Fund Threshold for private pensions and lower the earnings contributions cap for allowable reliefs, and remove the Special Assignee Relief Programme for multinational employees. Sinn Féin also plans to increase the rates of Capital Gains Tax and Capital Acquisitions Tax and to reduce the threshold for inheritance tax to levy more tax on children of deceased parents, to introduce a new annual Net Wealth Tax, to increase Stamp Duty on higher valued residential properties and on all commercial properties. The clear message from Sinn Féin is that it can extract ever increasing taxation from the productive sector, employers, investors, multinationals and higher earners and these stakeholders will accept their fate, with no negative consequences. Reality, should these policies actually be implemented, will be very different. Taxation yields will fall, and public services and investment will suffer. Ireland will become poorer within one 5-year term of SF-led leftist government.
We know that investors, wealth and many businesspeople and multinationals will leave any country dominated by far left populist taxation policies. France's old socialist wealth tax and super-tax on high incomes drove tens of thousands of millionaires out of the country, including many high-profile wealthy investors and business leaders. Unsurprisingly, as these highly-mobile people departed, France lost significantly more income tax, VAT and other tax revenues than it gained from the wealth tax. The left's tax policies in France led to it being labelled "Cuba without the sun" by President Macron, who when elected went on to reform the tax system including replacing the wealth tax with a property tax similar to Ireland's current property tax. France’s economy has never done better than under the centrist President Macron. However, the populist French left leader Jean-Luc Melenchon wants to go backwards saying he would tax the wealthy hard and reduce the already low retirement age in France, making populist promises that even some on the left must think are fanciful. He not only likes to promise guaranteed jobs, but capital controls too. Hugo Chavez would approve.
Ireland should seriously beware the populist left but it seems that rage, division and anti-success populism may well prevail here, if polls are anything to go by.