Options for raising tax revenue in Ireland

Abstract

The mission of the Economic and Social Research Institute is to advance evidencebased policymaking that supports economic sustainability and social progress in Ireland. ESRI researchers apply the highest standards of academic excellence to challenges facing policymakers, focusing on 12 areas of critical importance to 21st Century Ireland.The Institute was founded in 1960 by a group of senior civil servants led by Dr T.K. Whitaker, who identified the need for independent and in-depth research analysis to provide a robust evidence base for policymaking in Ireland.Since then, the Institute has remained committed to independent research and its work is free of any expressed ideology or political position. The Institute publishes all research reaching the appropriate academic standard, irrespective of its findings or who funds the research.The quality of its research output is guaranteed by a rigorous peer review process. ESRI researchers are experts in their fields and are committed to producing work that meets the highest academic standards and practices.The work of the Institute is disseminated widely in books, journal articles and reports. ESRI publications are available to download, free of charge, from its website. Additionally, ESRI staff communicate research findings at regular conferences and seminars.The ESRI is a company limited by guarantee, answerable to its members and governed by a Council, comprising 14 members who represent a cross-section of ESRI members from academia, civil services, state agencies, businesses and civil society. The Institute receives an annual grant-in-aid from the Department of Public Expenditure and Reform to support the scientific and public interest elements of the Institute's activities; the grant accounted for an average of 30 per cent of the Institute's income over the lifetime of the last Research Strategy. The remaining funding comes from research programmes supported by government departments and agencies, public bodies and competitive research programmes.

Income inequality in Ireland, 1987–2019

“…Some calculations exclude the highest and lowest centiles of the distribution to account for well‐documented issues of non‐response, undersampling and misreporting at the tails (Atkinson et al., 2011; Brewer, Etheridge and O'Dea, 2017; Callan et al., 2021). As in many countries, neither SILC nor its predecessors collect information on realised or unrealised capital gains, which are more prevalent towards the top of the income distribution, not least because of their preferable tax treatment relative to employment or dividend income (Advani and Summers, 2020; Björklund and Waldenström, 2021; Kakoulidou and Roantree, 2021).…”

Increasing Pay Related Social Insurance to fund the State Pension: Incidence and effectiveness

“…On a statutory basis, employee PRSI is paid by employees while employer PRSI is paid by employers. However, as discussed by Kakoulidou and Roantree (2021), there is much international evidence to suggest that reforms to employer PRSI are at least partly borne by employees through wage decreases. A meta-analysis by Melguizo and González-Páramo (2013) suggests that two-thirds of labour tax reforms may be passed on to employees although Adam et al (2019), among others, estimate that these effects may be limited in the shortrun due to sticky wages.…”

https://www.esri.ie/publications/poverty-income-inequality-and-living-standards-in-ireland-third-annual-report

“…Finally, as with any household survey, there is likely incomplete coverage of the very top of the income distribution by the household surveys we utilise due to nonresponse and undersampling (Atkinson et al, 2011;Callan et al, 2021). In addition, like in many countries, neither SILC nor its predecessors collect information on realised or unrealised capital gains which are more prevalent towards the top of the income distribution, not least because of their preferable tax treatment relative to employment or dividend income (Björklund and Waldenström, 2021;Kakoulidou and Roantree, 2021).…”