Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
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TPA launches petition to freeze business taxation

TPA launches petition to freeze business taxationThe Taxpayers’ Alliance has launched a petition on its website (freezebusinessrates.org) to enable taxpayers to appeal to their members of Parliament on business rates.
Corporate taxation in the United Kingdom rose by 4.6 per cent in 2011, by 5.5 per cent in 2012. Yet the coalition government (...)

Romney or France’s Anti-Republican Obsession

Romney or France's Anti-Republican ObsessionIn his book The Anti-American Obsession, philosopher Jean-François Revel exposed French fantasies and clichés on the United States and towards its President. It is customary in France to poke fun at US Presidents, treating them like morons who have gotten elected head of state in some miraculous (...)

Taxpayers Alliance against union subsidies

Taxpayers Alliance against union subsidiesOur colleagues at the TPA have campaigned successfully against union subsidies. This means that the number of civil servants working for the unions at the taxpayers’ expense will now be reduced sharply. Currently, 0.26 per cent of the payroll in the Civil Service is spent on union (...)

Taxes are the largest expense for Swedes

Taxes are the largest expense for SwedesSwedbank has calculated what Swedes already knew: taxes are by far the largest budget item for any household. An individual earning SEK 25,000 per month pays SEK 17,500 in taxes (of which SEK 6,100 to the municipality, SEK 4,300 in pension dues, SEK 3,380 to the health care authority and SEK (...)

The German taxpayers’ association demands a rebate

The German taxpayers' association demands a rebateAs tax revenues are flooding into the Treasury, the German taxpayers’ association (BdSt) has asked the federal government to axe the "stealth" tax increases and to cut spending further. Current estimates show that tax revenues will be substantially higher than previously thought: a record 600 (...)

French budget 2013: IREF moves to appeal to the Constitutional Council

French budget 2013: IREF moves to appeal to the Constitutional CouncilIREF has examined the provisions of the French government’s 2013 budget proposal, and concludes that these are confiscatory and arbitrary. Henceforth taxpayers will be subject to taxation on revenues of which they do not dispose, and forced to pay taxes that are above the corresponding incomes. (...)

The greatest achievement of French statism: high unemployment

The greatest achievement of French statism: high unemploymentBy Nicolas Lecaussin
Can you imagine that unemployment has been “priority number one” for French politicians over the past 35 years! Left, right and center have all claimed that their first objective was to reduce unemployment, in particular among young people. Yet they have failed every time. (...)

The French 2013 budget: fiscal iniquity and inefficiency

The French 2013 budget: fiscal iniquity and inefficiencyJean-Philippe Delsol
Tax lawyer, deputy director of IREF
The government’s goal of reducing the budgetary deficit to 3 per cent of GDP is commendable, even though such a deficit will inevitably increase the French public debt as growth will be low or even close to zero. However, the tools (...)

The same euro mistake under a different name

The same euro mistake under a different nameDespite being bombed by information, it seems we have forgotten the roots of the debt crisis. Instead we play a martingale game, where the only precaution after losing a round is to double the bet for the next one. The solution is not called EFSM, EFSF, ESM, SMP, OMT or banking union. These are (...)

Sweden to slash corporate income tax

Sweden to slash corporate income taxAn old American joke has it that hell is where the Swedes are in charge of entertainment. But the last laugh in fiscal policy matters in Europe will probably go to Swedish legislators as they vote for implementing a reduction of corporate income taxes (...)

Warning: Last Exit to Belgium

Warning: Last Exit to BelgiumThe hyped rhetoric following the future Belgian exile of LVMH owner Bernard Arnault is no surprise to anyone well-versed in the French psyche.

The Single Income Tax

The Single Income TaxThe Taxpayers’ Alliance has published a summary of its final report, proposing a Single Income Tax to tax streams of income once. As stated by Allister Heath, Chairman of the TPA Tax Commission, "the old order is broken and needs radical reform. But we are also realists: our proposals, while (...)

A Plan for Sound Money

A Plan for Sound MoneyIn response to the financial crisis in the euro zone, the Lithuanian Free Market Institute (LFMI) has worked out and submitted to public institutions a plan which would help countries potentially exiting the euro zone to build stable and sound money. LFMI‘s proposal can be also used by the euro (...)

Yearbook 2012

Yearbook 2012How far should redistribution go? Who should pay for it and how? What is the proper role of the State and what is better left to private initiative? Should insolvent banks be bailed-out? Is it better to tax individuals when they consume or as soon as they earn their income? Should we rely on (...)

Italy in the tax turmoil

This paper is excerpted from the forthcoming "IREF’s Yearbook on Taxation" 2012
On July 6 the Berlusconi government passed a first package of mandating modest immediate cuts in the expenditure and similarly modest immediate increases in tax revenue to address concerns on the capacity of Italy (...)

Ireland on the way to recovery

Ireland on the way to recoveryThis paper is excerpted from the forthcoming "IREF’s Yearbook on Taxation" 2012
In an unprecedented and historical move, the European Union forced the Irish government against its stated wishes to indebt itself in an € 85 billion international bailout comprising of the IMF, EU and bilateral (...)

Sweet Drop on Gauche Caviar: Chronology of the Portugese workers day saga

Sweet Drop on Gauche Caviar: Chronology of the Portugese workers day sagaPortugal is traditionally a leftist country. Since the Carnation Revolution in 1974, in which the Left threw out the fascist government of Marcelo Caetano, it is fashionable in Portugal to be leftist and being labeled socialist. If a proof was needed, in the 2011 elections, all 6 parties in (...)

French 2011 fiscal reforms in retrospect

French 2011 fiscal reforms in retrospectThis paper is excerpted from the forthcoming "IREF’s Yearbook on Taxation" 2012
In view of the great fragility of French public finances, all the candidates to the April 2012 Presidential elections have felt the necessity to explain their strategy to put the country back on track, if elected. (...)

Lessons from Lithuanian austerity

Lessons from Lithuanian austerityIn recent years, the Baltic States have been showcased as an austerity success story. While the whole world has seen countries such as Greece, Spain and Portugal struggling to reduce their public spending, Lithuania has been hailed as an austerity example. Lithuanian success in public spending (...)

The Spanish Corporate Income Tax Hike Will Hurt Economic Recovery

Last March 30, the Spanish Government announced its most important measures to reduce the fiscal deficit for 2012. These actions have been based on reducing public spending and, again, increasing taxes. “Again” because on December 30, 2011, the conservative new Government already raised the (...)

The Euro: A Community of Shared Destiny?

The Euro: A Community of Shared Destiny?In March 2010, when the Greek debt crisis was heating up, then-ECB president Jean Claude Trichet declared to the EU parliament that the “monetary Union in Europe is far more than a monetary arrangement. It is a union of shared destiny”. Less than two months later the ECB reversed its refusal to (...)

Urgent Tax Measures Needed by the Spanish Economy

Urgent Tax Measures Needed by the Spanish EconomyAs is publicly known, Mariano Rajoy, leader of the Spanish Partido Popular, recently became president of the Spanish government. Mr. Rajoy is poised to introduce new measures needed by the Spanish economy in order to, in first instance, stop the bleeding (in general terms, but in particular (...)

A few recommendations to Spain’s new leader

A few recommendations to Spain's new leader“What would you (try to) do to save your country from economic collapse?” This is indeed a difficult and tricky question, and one that is normally answered along the lines of interventionist economic thinking. The fatal conceit that Hayek wrote about is embedded in this same question: it assumes (...)

Individual Rights and the Fight Against “Tax Evasion”

Individual Rights and the Fight Against “Tax Evasion”The emergence of a global government cartel without any restrictions to tax and spend their citizens’ wealth would lead to a world that is less free and less prosperous. The financial and economic crisis that unfolded from 2008 has led many governments to intensify their efforts against what has (...)

French unions live the good life. For how long?

French unions live the good life. For how long?France is famous for its wine, cheese and…unions. It is well established now that any reform considered by any government, left or right, has to be approved by unions (or, at least, not strongly opposed) in order to have a chance to be passed. Strange situation in a country where less than 8% of (...)

Bank regulation: Troubleshooter or Troublemaker?

A widespread understanding of the 2007-2008 crisis places the origins of the crisis in a capture of global economy by the finance industry. The “occupy Wall Street” group would surely agree, as well as most of those who get their economics from the general media. And President Sarkozy in his (...)

Taxing the Rich: a Promising Tool According to Many European Member States

Taxing the Rich: a Promising Tool According to Many European Member StatesThe sovereign debt crisis forces our governments to stretch their imagination in order to find additional budget revenues. In Europe, as well as in the US, many voices call for additional contributions from the rich (not such a big stretch of imagination, in fact, if it was for the already high (...)

French austerity measures – more taxes and unconvincing plans to balance the budget

French austerity measures – more taxes and unconvincing plans to balance the budgetFor the French government, it is more than ever urgent to convince everyone that the State deficit is moving in the right direction and the public debt is sustainable. In the context of an uncertain future for the French credit rating triple A note, the present debate on the budget of the State (...)

In next year’s presidential elections, voters will choose between statism of the left and statism of the right.

In next year's presidential elections, voters will choose between statism of the left and statism of the right.This article appeared in The Wall Street Journal
In next year’s French presidential elections, it seems increasingly likely that voters will be asked to choose between two types of statism: statism of the left and statism of the right. Over the weekend François Hollande won the final round of (...)

Bank stress tests or how governments are trying to fool the market

Bank stress tests or how governments are trying to fool the marketEuropean governments are under pressure to shore up the banking sector in the face of growing worries about the industry’s capital levels, access to funding and earning power in the context of global crisis. Indeed, weakened by their bad sovereign debt holdings, several banks are scrutinized by (...)

Why do the rich want tax increases?

Why do the rich want tax increases?Yesterday, the US President Obama announced a new debt plan built on taxes on rich. He called for $1.5 trillion in new taxes on upper income taxpayers. His plan would end Bush-era tax cuts for top earners and would limit their deductions. This proposal is following the public debate on the (...)

G7 – in search of equilibrium

G7 – in search of equilibriumThe French Minister of Finance, François Baroin, concluded the G7 meeting in Marseille with a statement that an equilibrium had been found between the necessity for fiscal consolidation and the necessity to avoid a recession. What kind of equilibrium is he talking about and is this equilibrium (...)

What’s the Matter With the French Banks?

What's the Matter With the French Banks?The French bank BNP Paribas published a disclaimer to this article signed by our Director of development Nicolas Lecaussin and published in the Wall Street Journal. The paper is mentioning the difficulties of some of the French banks, including (...)

France - bad measures crowding out good ideas

France - bad measures crowding out good ideasThe game of representative democracy is such that we constantly have to choose, not between policies, but between programs that are best seen as baskets of policies to be implemented if the candidate supporting that program is elected. The basket that the French President, Nicolas Sarkozy, (...)

The French social model challenged by the debt crisis

The French social model challenged by the debt crisisIn 2009, 31.3% of the French GDP has been spent on welfare payments. Those include spending by the State-managed health care system, unemployment benefits and social benefits. The government agency in charge of those payments has tripled its deficits during the past 3 years reaching a record 28 (...)

Market Crises Versus Sovereign Crises

Market Crises Versus Sovereign CrisesThis article first appeared in the Wall Street Journal
Markets always make good scapegoats. When they do well, they are populated by profiteers. When they do badly, they are accused of causing trouble for everyone else.The denizens of the Dow, Nasdaq, CAC and DAX floors may be speculators and (...)

A new world

A new worldThe world is probably going to change after the recent downgrading by Standard&Poor’s of the US debt rating from triple A to AA+. Beyond the disturbing loss of the landmark Treasuries represented for global finance, what is important here is the awareness that even the biggest world economy (...)

Who should pay for Greek’s mess?

Who should pay for Greek's mess?After a huge transfer-loan of €110 billion last year, Greece is once again pending on EU-IMF charity in order to avoid default, or at least, to benefit from a smooth default (assuming such a thing exists). Meanwhile, the Greek economy is paralyzed and tensions grow inside Greece as well as in (...)

Portugal turns the page

Portugal turns the pagePortugal has undergone a huge change. There is a completely new political leadership: younger, better prepared, and much more open to the civil society. But even this “right wing” government lack the theory to understand the causes of the crisis Portugal currently faces, and thus seem unable to (...)

Taxation on savings in Switzerland approved by most of EU member states

Taxation on savings in Switzerland approved by most of EU member statesAfter being seriously blamed by Italian Minister of finances Giulio Tremont last month, Switzerland finally finds itself largely approved on its private savings policy in the recently revealed by the EU Commission report on enforcement of taxation on savings regulation. As a matter of fact, (...)

What is going on with Italy’s public finances?

What is going on with Italy's public finances?Moody’s rating agency warned on Friday on Italy’s public debt and mentioned the reviewing of Italy’s credit rating for a possible downgrade. This change, if it happens, would increase the government’s borrowing costs and have a very negative impact on public (...)

Portugal -the State grows, the economy languishes

Portugal -the State grows, the economy languishesPortugal is the third EU country after Greece and Ireland to need financial bail-out in order to avoid bankruptcy of the State. How did things go so wrong and for what reason - is it only the fault of the international financial crisis, or - more probably - bad management of public finances (...)

Denmark is reforming tax policy

Denmark is reforming tax policyIn January 2010, the largest tax reform in Denmark in more than ten years began taking effect, shifting some DKK 30 billion (€ 4.0 billion) of tax revenue when fully implemented in 2019. Of this, more than DKK 25 billion (€ 3.4 billion) is used to lower the marginal tax on income in order to (...)

France will soon change (again) its fiscal law, but not its fiscal policy

France will soon change (again) its fiscal law, but not its fiscal policyFrance’s government presents a project to introduce several modifications in the fiscal law; a project to be validated by the National Assembly before the symbolic date of July 14.

In Praise of Fiscal Divergence

In Praise of Fiscal DivergenceThis article appeared in the Wall Street Journal.
In the past year, Brussels has revealed its near-obsession with fiscal convergence in Europe. As the euro zone’s debt crises roil financial markets, the EU’s leaders have made clear that the only path they see to survival is centralized budgetary (...)

The Common Consolidated Corporate Tax Base - An instance of the EU’s Icarus Complex ?

The Common Consolidated Corporate Tax Base - An instance of the EU's Icarus Complex ?On Wednesday16 March 2011 the EU Commission published a proposal to introduce a Common Consolidated Corporate Tax Base (CCCTB). A few days earlier, on Friday 11 March, the heads of state of the Euro area almost agreed on a « Pact for the Euro » to save the common currency from financial meltdown (...)

Harmonization of the European corporate tax base – not such a great idea

The European Commission has recently relaunched the proposal for a common system for calculating the tax base of businesses operating in the EU. According to the officials, the aim is to significantly reduce the administrative burden, compliance costs and legal uncertainties that businesses in (...)

Simpler and Clearer Fiscal Rules

Simpler and Clearer Fiscal RulesLast year discussions for introduction of the so-called fiscal board in Bulgaria led to a project of the “Financial Stability Pact" prepared by the Ministry of Finance and presented by Simeon Djankov (see here). The pact provides for fiscal rules which cannot be bypassed by a simple majority in (...)

Why the Portuguese government fell?

Why the Portuguese government fell?Because the music stopped.
As Thatcher said, “They [socialists] always run out of other people’s money”. Portugal is now a perfect study case for this golden rule, with its quadruple-crisis.

Free market is not to be blamed for the private debt bubble: the case of Spain

Free market is not to be blamed for the private debt bubble: the case of SpainWhen reflecting on the causes of the current economic and financial crisis, the huge upsurge in private debt is one of the most cited reasons. Some people insist on blaming the private sector for this. According to them, the sustainability of its behavior has been clearly put into question by (...)

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