2016 is going to be a crucial year for Royal Mail, RM, the 500 year old British postal operator whose privatization process (started in October 2013) was finally completed in October 2015. In a broad sense, it is a decisive time for the entire sector of delivery services in Great Britain. The (...)
Back in 2014, several European countries started including the revenues from drugs and prostitution into their national accounting systems. These two sectors have several characteristics in common. First, the consumption of drugs and paid sex is usually considered an immoral activity from a (...)
An historic decentralization deal in England
There is historically in England a North/South division. In the South, trade and financial services have made London the target of international investments and the principal source of economic growth in the country. In the North, there is no city (...)
Addictive Manufacturing (AM) is the name adopted in industries whose production is defined by the use of large scale 3D printing techniques. 3D printing is a technology which builds three-dimensional objects from a digital prototype. Today AM represents the foremost level of digitalisation in (...)
A deteriorated banking sector in a worn-out economy At the beginning of 2016, in the context of the new EU legislation on “bail in”, Italy found itself unprepared to face the emerging crisis of its credit system, mainly caused by two correlated elements: 1. a banking sector weakened by a large (...)
How is NHS coping with winter?
Winter is historically, and not surprisingly, a very challenging time for the UK National Health System, NHS, due to lower temperatures and the spread of viral infections. Winter 2015/2016 seems to be particularly bad and the system is showing clear signs of a (...)
Net neutrality: what is the debate about?
The Internet has probably been the fastest developing industry of the last two decades, leading it to become a necessary instrument in our daily life and a possible engine of economic growth. In this context, the net neutrality principle broadly says (...)
The UK labour market at the beginning of 2016 is in a rather good shape. The rate of unemployment has decreased steadily in the last two years and is now approaching pre-crisis figures. Employment at 73.9% is reaching also record levels.
Presenting the summer budget, George Osborne, the (...)
The Nobel-Laureate Douglass North passed away at the end of November. Though he didn’t specialise in fiscal questions, his analysis of institutions in early modern Europe reveals that actual fiscal choices about how to finance an army help to determine the fortunes and falls of European powers. (...)
The UK government has been watching Jamie Oliver’s TV shows and now wants to implement his plans for a new tax on sugar. The Commons‘ Health Committee has reported its overwhelming support for the idea at the end of November. Other than arguments that such taxes are “good per se“ because they will (...)
At the beginning of October, England became the last constituent part of the United Kingdom to introduce a compulsory charge for plastic shopping bags (to be paid by the shopper), after similar taxes had been introduced in Scotland, Wales and Northern Ireland in previous years. The relevant (...)
Strange behaviours are often caused by strange taxes or subsidies. The strange behaviour of Volkswagen believing it could cheat and not get found out was motivated partly by the strange tax/subsidy policies in Europe which subsidised diesel at the cost of petrol (...)
In an alarming trend, individuals, companies and institutions that have committed no crime are increasingly finding themselves subject to public witch-hunts on ill-defined ‘ethics’ charges. The practice is gaining traction in several countries, though it remains unclear who has the authority to (...)
Two routes exist in theory towards making people behave more environmentally: through taxation, and through better defining and upholding of property rights. Empirical evidence suggests that at least in the EU, environmental taxation does not seem to work. Greater reliance on property rights (...)
An essential component of a free society is independent press. It plays a central role in preventing both state actors and private interest groups from pursuing their own interests through state power too aggressively. Journalists independent from political and economic power work effectively (...)
The best way how rich countries can help the poorer ones has always been to teach them how to fish. Not giving them fish. And certainly not taking fish away from them.
Yet this is what the EU has been doing since the 1970s, and in September it has renewed three multi-year greatly underpriced (...)
Germany Income per capita is not only high in Germany, it is also relatively equally distributed in the population. OECD data indicate that only a few small countries have income both higher and more equally distributed than Germany. In other large European countries like France, UK, Italy or (...)
"Fair tax(es)" is a beautiful idea everybody wants to subscribe to. Including, of course, modern EU politicians. Their idea of "fair tax", however, differs very much from the way in which people understood the concept in the past.
It is no longer about making sure the tax is fair to the (...)
It is good when foreigners buy agricultural land. Johnny Foreigner will have evidentnly paid more than anyone else, and he can bring access to better capital, technology, know-how or marketing channels. That’s what the single market is for.
Yet governments fear him and legalise against him - (...)
A new study from a German economics institute claims that the German state has already made €100bn from the Greek crisis as lenders flee from Greece into the safe haven of German government bonds, reducing their interest rate and saving the German government money on debt interest payments. (...)
The imagination of EU governments to come up with new kinds of tax is apparently inexhaustible. Tax on meat is now being prepared, as an answer to alleged “problems” with meat production and consumption. But taxes are generally bad solutions to “problems”, especially when those problems are created (...)
It’s not just USA who is raising minimum wages significantly. New or increased minimum wages are spreading all across the EU, too (e.g. Germany, UK, Portugal..). If we take McDonald’s as a symbol of "minimum wage jobs", which governments are working the hardest to deprive such workers of any job (...)
If it wasn’t obvious already, Greeks do their taxes differently.. They rely more than is customary in OECD on the less visible taxes of VAT and Social Security. Income tax revenue (from people and companies) is much less prominent. If they are risking a lot less, it time to try to actually lower (...)
New retail tax in Hungary discriminates big business, which just happens to coincide with the finance minister’s nationalistic interest. New retail tax in Czechia favours big business, which just happens to coincide with the finance minister’s business interest. Curious thing, (...)
You’ve heard of Bitcoin. Is it primarily a currency or a service?
Its users probably could not care less; for many it will be both. Yet a distinction is necessary. Why? Well, taxes, of course! What else?
If it is primarily a currency, buying or selling bitcoin (exchanging it for your ordinary (...)
Greece failed to pay a 1.5 billion installment by the end of June. The rhetoric has long portrayed the lenders as fat cats living off Greece’s misery. Varoufakis had his sight on 1.9 billion which he called “ECB’s profiteering on poor Greeks” and should be “returned” to the Greeks to cover the IMF (...)
How do you make a credible list of countries whose tax policies you don’t agree with? Do you ask only half of your members, let them decide their own criteria, and have it approved by a few interest groups? If you are the EU, then (...)
Two decades after the last EU bananagate, it’s going bananas again. EU subsidy programme to bring "fruits, vegetables and bananas" [sic!] to schools is only partly trying to do a "good thing". Partly it’s changing schools into dumpsters for excess output of oversubsidised agriculture. And the EU (...)
So you thought you could have your cake and eat it. That you reduce tax on something which has benefitial implications for a disadvantaged social group, saves resources and is good for the environment. Think again, says the EU Court. Your young ones are, apparently, not a legitimate aim of (...)
How do you know that any institution has too much money? When it does not manage, in spite of best intentions, to spend them all. Then there is room for scaling down the budget. The money will not disappear - it will be spent by the original "donors" instead. We show that the EU is, at least to (...)
An age-old phenomenon: Some unemployment exists and politicians want to fight it by creating conditions for new jobs. The usual recipe involves expanding government spending and investment programs. Figures for OECD countries show that places with low taxation of labour tend to exhibit low (...)
European Parliament has just voted to increase the budget each MEP can spend on their assistants. This can hardly be justified. Worse, it can increase the deluge of new regulations.
International institutions like IMF or World Bank do often give economic policy advice to poorer countries, but generally only after thorough analysis. EU does not specialise in such anaislys, and its diplomats should avoid dispensing such unfounded advice (...)
There are plenty of reasons to panic about the level of UK government deficits and debt. But Brexit, even if it actually came, is not one of them. We review the relationship between a UK-sans-EU and public finance.
In the Middle Ages in the Middle East, merchants and travellers would sometimes have a proof of having paid their tax tattooed on their necks, to prove that they don’t have to pay again. Modern EU has devised a less painful alternative – a “Portable Document A1”. It is automatically recognised (...)
Businesses both pay taxes and collect them from others for the government. How administratively burdensome is this activity across the EU, North American and EFTA? We assess the evidence and identify, whether it is the frequency of filing or complicated tax returns that (...)
The European Court of Justice (ECJ) ruled last Thursday that e-books are not allowed to enjoy the lower VAT that “normal” books enjoy in some EU states, and that they have to be taxed at the standard (much higher) rate of other goods. The ECJ’s justification sounds strange and very (...)
If you are playing for time, you have to swamp your creditors with proposals how you are going to improve. “This time it’ll work, honest, guv.” So the Greek government is now proposing a secret tax police, where ordinary citizens would be wired with cameras and microphones to catch tax evaders. (...)
We are continuing our assessments of monthly packages of legal actions initiated by the European Commission against member states. Unfortunately, no information was made available by the EC since our November assessment until the current February package. At the beginning of December, the next (...)
The French government is hoping to help consumers – and increase growth – by making it illegal to manufacture products with artificially shortened lifetime. We argue that proving such case will be nearly impossible in modern technology and the ban will act as a tax, with consequences even worse (...)
Negative interest rates here, there, everywhere. What used to be taught as "impossible" in textbook is now a reality throughout the EU. And for the first time it even affects corporate bonds, not just "safe" sovereign ones. Why would anyone lend more than they receive, when they can just hang (...)
The poorest poor in Croatia are having their debts wiped out by the government. The motivation may be noble, but the apportioning of the costs is despicable. Once again, government’s power and reach grows, yet it keeps this fact under the carpet. Who’s (...)
Earlier this week, Russian borrowers with Euro or Dollar mortgages called upon Putin to relieve them of their now increased interest payments. Banks should bear the costs, whilst the borrowers bore the benefits until now. We show that this bailout is just a repeated story of bank and government (...)
Greece is said to be suffering under crippling burden of debt servicing. However, the official debt servicing is already lower than in other EU countries with much smaller debts. Furthermore, the actual interest payments payable by Greece are close to those that Germany is having to make on its (...)
Transatlantic Trade and Investment negotiations are resuming. Popular support varies across Europe, we identify four distinct groups. Removing trade protectionism will generally benefit ordinary people. However, some protectionism may increase, especially in investment chapters. If governments (...)
New rules about deficits run by Member State governments have been announced by the European Commission. They are phrased as “guidance” so no Parliamentary approval is needed. They are said to “encourage structural reforms and investment”, but IREF shows that they discourage structural reforms and (...)
9 EU countries have not adopted the Euro, 19 have. Both groups include similar proportions of countries with high, medium and low levels of economic freedom. However, IREF’s investigation of what has been happening to economic freedom in the two groups reveals significant differences. While (...)
New ECJ ruling confirms that member states can currently deprive non-residents of welfare payments. Yet, it has been popularly portrayed as a new tool to protect the spiralling costs of EU welfare states. We show that on the contrary, costs may rise, both in the short and long run, and the (...)
Free movement of people, capital, goods and services across national borders. Those are, allegedly, the pillars of European integration. One of them, the free movement of capital, crossed swords twice this week with EU policy makers convened at the regular meeting of financial ministers. It (...)
"In order to prevent tax fraud, income tax withholding should be increased so that governments over-withhold and most taxpayers receive a refund." This is the policy prescription in a new research about to be published. We argue that this conclusion is wrong. The authors have not proven the (...)
Every month, the EU Commision starts dozens of legal actions against Member States for non-compliance with EU law. We evaluate the November crop of fiscally-related cases. While 2 such actions are generally a good idea, 4 are a bad idea, reducing EU citizens’ opportunities for an efficient and (...)
Tax cuts are pretty rare in the real world. When they do happen, they tend to be very partial, offering unjust advantages to a specific group. But even broader tax cuts can paradoxically do much harm. Using Italy as an example, this piece argues that when tax cuts lead to greater debt, they (...)
It is becoming a pattern. Another weekend, another 100,000+ protest against a new tax. Only not Hungary and tax on the internet, but Ireland and “tax on water”.
At least that’s how many media are reporting it. ABC runs with the headline "Marchers Protest Ireland’s New Tax on Water Supply", RT (...)
The new Nobel Memorial Laureate is one of prime architects of modern regulation of markets. To many that will make him a social engineer. However, as modern EU governments’ budgets are increasingly suffering from similar problems of failed previous regulation and self-regulation, his voice (...)
With the Scottish referendum around the corner and other ones looming on the horizon, IREF investigates the accounts of states thinking about a divorce. What are assets and liabilities to be split? Is the currency such asset, for (...)
Scotland’s coming referendum is offering the country “independence”. Politicians cannot agree about what exactly it would mean, especially what currency the new state would have. Now an economics Nobelist has added his voice to the debate. At face value the question of adopting another country’s (...)
Most companies were hit hard by the freezing up of financial markets after 2008. Governments responded selectively – by selective tax cuts and subsidies, but they could have more meaningfully “help” everyone, not just big companies, by lowering corporate tax rates. Did they? IREF investigates, and (...)