Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
and economic freedom


Online Articles

Low labour taxes – less unemployment

Low labour taxes – less unemployment 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 (...)

What’s Wrong With | increasing budget for EU Parliamentary assistants

What's Wrong With | increasing budget for EU Parliamentary assistants 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.

EU should not encourage Nigeria to increase income taxes. (Or anyone else.)

EU should not encourage Nigeria to increase income taxes. (Or anyone else.)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 (...)

It is not Brexit that endangers sovereign debt

It is not Brexit that endangers sovereign debtThere 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.

6 reasons to worry about inconclusive UK election
Political instability tends to worsen national debt

6 reasons to worry about inconclusive UK electionUK might not get a single party government after next month’s election. Again. Moody’s are not worried about the consequences for government finances. They probably should be.

What’s Wrong With | Greek death tax uncharitable to foreigners
Greek death tax uncharitable to foreigners

What's Wrong With | Greek death tax uncharitable to foreignersSay you want to pass your wealth to others after you die, since you cannot take it with you. If you pass it to friends and family, many (18) EU governments will take a hefty portion of it in inheritance tax. If you pass it to a charity, most governments won’t charge you tax. If you pass it to a (...)

Have you paid your tax? Belgian taxman won’t believe you.

Have you paid your tax? Belgian taxman won't believe you.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 (...)

Actual business tax? Almost half of profits in almost half of EU
Businesses pay a lot more than just corporate income tax.

Actual business tax? Almost half of profits in almost half of EUThe impression from media is that companies pay “only” somewhere around 20-30% tax rate in the EU, if they pay at all. That’s only the headline figure for one tax they pay. Total tax rates are well over 40%, French businesses pay 2/3 of their profits in tax. What’s worse, the big economies of (...)

EU’s complicated tax forms, measured

EU's complicated tax forms, measuredBusinesses 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 (...)

Text in e-books is irrelevant, says highest EU court

Text in e-books is irrelevant, says highest EU courtThe 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 (...)

The new Greek (Secret) Tax Police

The new Greek (Secret) Tax PoliceIf 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. (...)

February’15 Assessment of Commision’s Legal Action

February'15 Assessment of Commision's Legal ActionWe 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 (...)

Planned Obsolescence: a tax with strange effect on economy

Planned Obsolescence: a tax with strange effect on economyThe 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 (...)

Fiscal health means more than current government debt
Some “fiscally healthy” Eurozone governments are in fact in dire straits

The Greek bankruptcy of 2010 was the latest impetus for reviving the debate on robustness of governments’ budgets in the Eurozone. It became clear that in order to assess the long-term fiscal health, it is not enough to look at the much used public debt-to-GDP ratio. Additional indicators need (...)

A guide to the world of negative interest rates

A guide to the world of negative interest ratesNegative 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 (...)

Croatian government has just grown bigger. And more sinister.

Croatian government has just grown bigger. And more sinister.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 (...)

After banks and governments, now individuals want money for “unforeseen circumstances”

After banks and governments, now individuals want money for “unforeseen circumstances”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 (...)

Greek debt servicing is not at all crippling

Greek debt servicing is not at all cripplingGreece 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 (...)

TTIP: ending some protections while creating others?

TTIP: ending some protections while creating others?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 encourage EU governments’ profligacy

New rules encourage EU governments' profligacy 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 (...)

Economic freedom down in Eurozone, up in non-Euro countries

Economic freedom down in Eurozone, up in non-Euro countries9 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 (...)

Greeks have the safest jobs in the euro area
Greek labour market is hard to crack for an outsider

Greeks have the safest jobs in the euro areaThe Greeks have voted and the left-wing Syriza emerged as the clear winner. There will now follow intensive discussions about Greek reforms and the relationship between Greece and the rest of the world. The labour market is one of the core battlegrounds in Greece. It is very difficult for the (...)

Freedom helps: especially in times of crisis
Greeks suffer consequences of lack of economic freedom

Freedom helps: especially in times of crisisFor several weeks Greece has been, once again, at the centre of European economic policy. Grexit, Greece’s withdrawal from the Eurozone, is being debated again, in light of the forthcoming Greek election of 25 January. Proponents point to the opportunity after such withdrawal for a massive (...)

3 French Hens
Twelve Days of Fiscal Christmas

3 French HensThis article is from our mini-series looking at modern fiscal issues surrounding items listed in the famous 18th century English carol “Twelve Days of Christmas”. We believe that if the list can be used as an index measure of monetary inflation, it can equally well be used as an indicator of how (...)

2 Turtle Doves
Twelve Days of Fiscal Christmas

2 Turtle DovesTo replace the original sacrifice of two turtle doves, the biggest European authority in the Middle Ages, the Catholic Church, dictated what people should eat. EU governments continue doing the same, by fiscal means. However, this fiscal policy is full of paradoxes. Governments tax consumption (...)

1 Partridge in a Pear Tree
Twelve Days of Fiscal Christmas

1 Partridge in a Pear TreeA partridge in a pear tree, the famous gift of the first day of Christmas, is at the centre of an EU fiscal paradox: European taxpayers are paying for extensive programmes to protect the habitat of the dwindling species. At the same time, they are fiscally forced to help to destroy partridge’s (...)

ECJ ruling strengthens European Welfare States

ECJ ruling strengthens European Welfare StatesNew 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 (...)

Financial Transaction Tax cannot deliver

Financial Transaction Tax cannot deliverFree 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 (...)

Increasing Tax Withholding? Bad Idea

Increasing Tax Withholding? Bad Idea"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 (...)

November’14 Assessment of Commision’s Legal Action

November'14 Assessment of Commision's Legal ActionEvery 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 (...)

Pretence of Knowledge: The Case of Jean-Claude Juncker
The EU as an investment bank we can do without

Pretence of Knowledge: The Case of Jean-Claude JunckerAccording to several reports, EU Commission President Jean-Claude Juncker is planning to introduce a 300 billion-euro investment package this Wednesday (November 26th). The idea is to establish a European fund that will assume liability risks on behalf of private investors. Only profitable (...)

Are tax cuts always necessarily good?

Are tax cuts always necessarily good?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 (...)

Swede dreams
What happens when high tax rates drop

Swede dreamsHow do you pay for increased government spending on education, health care and social services? By lowering the tax rate, of course… Wait, what?! Oh indeed. A new report on Swedish fiscal developments over the last dozen or so years shows what’s possible to achieve when a country tries to shake (...)

“Water Tax”, the Ire of Ireland

“Water Tax”, the Ire of IrelandIt 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 (...)

Taxing the internet – is Hungary leading the way?
8 myths busted

Taxing the internet – is Hungary leading the way?Large demonstrations took place over the weekend in Hungary. Somewhat unusually, people were not protesting against spending cuts, but against a new tax. A targeted tax on internet traffic. The issue of taxing this new paradigm of our lives will not go away anytime soon. As a companion to your (...)

Regulatory Role of One Jean Tirole

Regulatory Role of One Jean TiroleThe 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 (...)

Deutschland Wages Über Alles
Minimum wage is a tax on those who create jobs

Deutschland Wages Über AllesGermany’s minimum wage has been created at a pretty high level, higher than its equivalents in the UK or the US. Increasing the price and reducing the quantity of an economic activity it acts as a tax. A pretty unsocial one as it destroys jobs for the poor and punishes those who create them. (...)

All aboard the fiscal board. Are you bored?
Should fiscal policy be taken away from governments?

All aboard the fiscal board. Are you bored?When governments are unable to take care of their finances, is it time to appoint them a guardian who will take care of that business and (co-)determine fiscal policy? When is such guardian irreplaceable and how could they help?

New EU members banned from zero
Dawn of Zeroastrianism?

New EU members banned from zeroIn 2006, the EU outlawed the zero, banning it from VAT rates of member states. Within two years the zero struck back. It now rules supreme in at least three economic areas, but in the tax domain it continues to be banned. Any newcomers to the EU will be hit especially hard. Why would anyone (...)

Fiscal assets and liabilities during a state divorce

Fiscal assets and liabilities during a state divorceWith 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 (...)

Nobelist plays poker. For a pound.

Nobelist plays poker. For a pound.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 (...)

5 ways of responding to financial crisis

5 ways of responding to financial crisisMost 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 (...)

Textbook guru: “Scrap corporate taxation!”
Why is anyone against it?

Textbook guru: “Scrap corporate taxation!”A famous economist, author of even more famous economics textbooks, is calling for an end to corporate taxation. Not because he has been bought by the corporate world and multinational companies, but because it makes economic sense. Perhaps most surprisingly – it should make sense even to (...)

EU in bolshevik footsteps: the new GOELRO
A century later....

EU in bolshevik footsteps: the new GOELROEU governments are increasingly subsidising electric plug-in cars. Many countries have “five year action plans” to electrify their roads, using tax money. Environmental benefits will actually decrease with e-car proliferation, and the governments are forcing us to pay for something we may soon (...)

Cumbersome German pension schemes: Pool them!
New IREF Policy Paper

Cumbersome German pension schemes: Pool them!A new IREF Policy Paper by Senior Fellow Alexander Fink analyses the colourful patchwork of various private pension schemes the government has created, and compares their inflexibility and other disadvantages to the US system. A “single pot” which would enjoy some of the currently individualized (...)

For whom the toll bells
So who would build roads without taxes?

For whom the toll bellsA century after privately built and operated roads were either nationalized or closed down, a new private toll road has sprung up in England. It is popular with drivers, if not with the local government. Is it always wrong to charge for use of infrastructure built from tax money? Is it OK that (...)

Naked truth about France
Government is blatantly nudist

Naked truth about FranceSummer temperatures bring new wave of strikes to France (not that they’re seasonal…). Two concurrent current strikes involve nudity. Fiscally, though, they have very different implications. It does not depend on what you do with your clothes, it depends on who is your (...)

Caveat Venditor. Should governments compensate companies for embargos?

Caveat Venditor. Should governments compensate companies for embargos?After many Occidental countries imposed sanctions on some Russian businesses, Russia has retaliated by restrictions on some Occidental ones. Trade wars rarely work. However, a new fiscal phenomenon has appeared: affected EU companies seek compensation from the state for loss of markets. Should (...)

Silly season of silly taxes

Silly season of silly taxesThe media world calls Summer “the silly season”. When politics takes summer break, it is time to roll out the “silly stories” to fill the media. Not this year. Politics strikes back and rolls out silly taxes on media. Hungary’s ruling party introduced a new tax on advertising revenues of up to 40%. (...)

If you’ve won Wimbledon recently, read this.
Key to post-Wimbledon life? Lose the key!

If you've won Wimbledon recently, read this. Carrying keys on your person is dangerous if you are a Wimbledon champion, tax authorities will charge you heavily for such audacity. At least one EU government’s budget apparently relies on its citizens winning the Wimbledon. And it encourages envy. If successful sports-people representing (...)

0 | 50 | 100 | 150 | 200 | 250 | 300 | 350 | 400

 css js

CLOSE

Monthly newsletter
Receive our publications for free

By continuing browsing our website, you agree with our cookies policy