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

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 (...)

Governments should not be able to blame courts for their deficits
Portuguese Constitution is too PC

Governments should not be able to blame courts for their deficitsPortugal’s Constitutional court joined the ranks of those European courts that have halted crucial welfare reforms by governments. IREF reviews the evidence and concludes that fiscal policy must, for better or worse, remain the sovereign responsibility of the government held accountable at the (...)

Strange property of property tax: an Irish tale

Strange property of property tax: an Irish taleDesperate times call for desperate measures. European governments cannot raise enough tax to cover their spending. Ireland has even been forced to adopt what economists generally consider the least distortive tax feasible. That is good (considering the alternatives), but its execution leaves (...)

The Sol y Sombra of one sombre tax reform by los sombreros

The Sol y Sombra of one sombre tax reform by los sombrerosSpanish government has just announced it will cut some taxes. The actual cut will not come until early next year, and just like a Spanish rodeo arenas, it has a sunny and a shady side to it. The sol is the riddance of tax breaks. The sombra, however, is ushered by the EU pressing for higher (...)

The Invisible Tax Riseth

The Invisible Tax RisethStalin said: No man – no problem.
EU governments’ tax policies are following suit. Shifting taxes onto a man who does not (yet) exist is one way of solving problems. Are governments also subtly changing existing taxes into less visible ones? Is this a more humane form of “No man protesting – no (...)

Race to the bottom? What race?

Race to the bottom? What race?Tax harmonisation in the EU is pursued in order to prevent competitive lowering of tax rates, an alleged race to the bottom. What race?, IREF asks. Taxes are an ever increasing (at best stable) portion of GDP, and have been for (...)

28 Shades of Grey
Gross domestic product is getting more gross

28 Shades of GreyProstitution is going to enter official Italian GDP figures, allegedly to help the government meet its fiscal targets... The story went viral.
IREF brings you the real story beyond the headlines. Prostitutes in GDP are perfectly normal, everywhere. It’s the way that we measure our governments’ (...)

Does turnout affect fiscal policy?

Does turnout affect fiscal policy?How economics - and the fiscal cycle - affect voter turnout is a richly studied question. But what about the other way? Can turnout - how many or few voters turn up to vote - affect the fiscal situation in the following period? IREF investigates and finds that people simply going and voting can (...)

A New Ocean Discovered! - or just another subsidy?

A New Ocean Discovered! - or just another subsidy? Cypriot government has unilaterally “redefined” one of the conditions of its 10bn bailout package and lifted a ban on government officials traveling business class. Is this an exercise in customary opulent luxury or is it actually a hidden subsidy? And aren’t all governments (...)

Geographic Distance from Brussels Matters

Geographic Distance from Brussels MattersVoter turnout at the latest European Parliament election is much debated. Many countries saw further drops compared to last EP elections in 2009, fuelling concerns about widening democratic deficit. Beyond the general facade, IREF discovers an interesting geographic pattern in the turnout (...)

What would be a “living wage” in the EU? The answer may surprise you.

What would be a “living wage” in the EU? The answer may surprise you.The concept of Living wage is gaining popularity throughout the EU. The social pressure of its advocates probably stands behind the recent proposals to increase substantial minimum wages. Closer scrutiny of the proposed levels of living wages by the IREF reveals, however, that the relationship (...)

Swiss referendum on minimum wage and the EU
LLL: Location, Largess and Lessons

Swiss referendum on minimum wage and the EUIf the Yes campaign wins today, Switzerland will have by far the biggest minimum wage on this planet. We analyse this trend in a wider context of contemporary European popular movements. We suggest that the Swiss Minimum wage proposition has actually very little to do with the traditional (...)

Wealth and growth: Mr. Piketty’s fallacious statistics
The misadventures of a new scientific materialism

Wealth and growth: Mr. Piketty's fallacious statisticsIn his new Capital in the 21st century, as forbidding as his previous work on High Wages in France in the 20th century, Thomas Piketty presents a mass of data on asset growth in several European countries and the United States. This information improves the knowledge of our society’s (...)

Basic income is not so basic after all

Basic income is not so basic after allNobody likes poverty. But how do we end it? Suppose we give everyone some money. This will automatically include the poor, we don’t have to identify them, problem solved. Is it doable? Will anyone still work, create new ideas, write poetry, love?
The answer depends largely on how basic the (...)

Woes of Wolf of Wallstreet

Woes of Wolf of WallstreetThe latest Scorsese blockbuster is still making the headlines for its novel artistic work with timelines. Does the Wolf, however, have anything whatsoever to say about Wall Street? Very little, and it may actually work to strengthen and entrench any bad practices that remain in the financial (...)

Are Members of European Parliament Smart or Dumb?

Are Members of European Parliament Smart or Dumb? European elections are upon us. In a series of articles, IREF is helping to inform voters’ decision. Last week we analysed attendance rates by voters at elections and reasoned that European elections may be bad for democracy. It’s now time to turn the tables and consider attendance rates of (...)

The useless reshuffle : another French exception

The useless reshuffle : another French exceptionFollowing lacklustre performance at local elections, the French President has appointed a new Prime Minister. Is it a good tactic, and will it change anything?

The fallacious statistics of Mr. Piketty
Book review

The fallacious statistics of Mr. PikettyIn his new book Capital in the 21st century (Belknap Press, April 2014), French economist Thomas Piketty presents a mass of data on asset growth in several European countries and the United States. This information improves the knowledge of our society’s relationship to capital and the divide (...)

Are European Elections Bad for Democracy?
Where have all the voters gone....

Are European Elections Bad for Democracy?“Nothing to see here, move on.” So goes the “apology” for low turnout rates in European elections as penned by many European analysts and commentators. “The US have them just as low at mid-term elections, so why worry?” Closer analysis of individual country data by the IREF, however, reveals that the (...)

Government’s Fiscal Monopoly: Mono or Poly?

Government's Fiscal Monopoly: Mono or Poly?European nations’ fiscal authorities must be doing an excellent job if people are willing to pay hundreds of thousands of euros for the privilege to pay taxes to them… Or is there something else behind the new market for EU citizenship?

The Butch Dutch
They want to be taxed.. or so they say.

The Butch DutchGovernment’s mortgage interest subsidy, besides creating a lot of social costs, benefits almost solely the rich, yet it’s precisely the rich who boldly claim to want to scrap the programme. What’s going on?

Dutch Disease, 2nd edition
… And Then There Were Three…

Dutch Disease, 2nd editionLadies and Gentlemen, please welcome to the stage Dutch Disease, 2nd edition. This time it’s not natural wealth that makes you poor, it’s a natural consequence of a poor policy.

Odd Odd-Number Experiment Has Odd Consequences. What Are The Odds?

Odd Odd-Number Experiment Has Odd Consequences. What Are The Odds?Only those Parisians whose licence plates end with an odd number could drive their cars down the Boulevards last Monday. It was the 17th, an odd number. This is no solution to a real underlying problem which exists because of a lacking (...)

Anti-Pollution Measures: A Third Of Abuse Of Power, A Third Of Mismanagement And A Third Of Demagoguery

Anti-Pollution Measures: A Third Of Abuse Of Power, A Third Of Mismanagement And A Third Of DemagogueryAnd maybe even a fourth third of “electoralism” in order to win the hearts of green voters! In fact, the executive power has nothing but contempt for users, taxpayers and citizens.

The Precautionary Principle Against Science

The culture of the single transgenic maize (MON810 , produced by Monsanto) approved by the European Union has been banned from France. It is the third time since 2008 that genetically modified corn is banned from the French territory. The decree of March 15th states that "in light of scientific (...)

Just How Unequal Would We Still Be If We Were All Equal?
Distribution Of Wealth Over The Life-Cycle And Inequality

Just How Unequal Would We Still Be If We Were All Equal?Suppose we had a society where the only difference among its members were their age. How unequally would wealth then be distributed?

Matteo Renzi And The Reform Challenge In Italy

Matteo Renzi And The Reform Challenge In ItalyOf all the shortcomings of the Italian economy, youth unemployment (40%) is the most worrying. The new Prime Minister, Matteo Renzi, took up this issue through labor law reform since it was outdated and harmful. Will he succeed where Mario Monti failed? Yet what happened at Fiat’s may be (...)

Obama The Ultimate Survival Guide
A Book By Wayne Allyn Root (Regnery, 2013)

Obama The Ultimate Survival GuideUltimately, how to resist the Obamamania that is ruining the United States?

France: Away From Global Economy?

France: Away From Global Economy?"Made in France" produced and exported: it is indeed a very popular program, but it can only be achieved if companies want to stay in or move to France. However, they are escaping from this fiscal and regulatory hell. Abroad, corporate taxes are much lower than in France and the legal framework (...)

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