3 2 mins 10 yrs

It’s so painfully obvious and yet most governments fail to appreciate that the ONLY way for them to boost their tax take is to…CUT TAXES. The Republic of Ireland has just CUT the VAT rate for the tourism sector to 9%. I believe this is an excellent step forward as it will reduce prices, provide improved value for consumers and thus encourage extra expenditure of disposable income. In turn this will help grow the stagnant domestic economy. VAT is just one of the many iniquitous taxes we are forced to pay although in fairness at least it is on consumption. The Republic should now cut personal taxation, seek to protect low corporate taxation, and reduce welfare costs. This is the simple recipe for economic growth. Oh – and leave the Euro because without that nothing else can be achieved. The high tax economic model so beloved of the Brussels elite will keep Ireland enslaved. Liberty, if it means anything, means telling the EU where to go. However I doubt that the political cast in Dublin have the guts to do anything about it.

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3 thoughts on “BOOSTING REVENUE BY CUTTING TAXES…

  1. “It’s so painfully obvious and yet most governments fail to appreciate that the ONLY way for them to boost their tax take is to…CUT TAXES. “

    The “only” way? I can’t agree with that.

    There Laffer curve is real and there is a point beyond which increased taxes will result in lower revenues but lowering taxes will only increase revenues if we aren’t at that point.

    If the United States cut their exceptionally high corporation tax then they would probably increase their revenues in the medium term but if Ireland cut its low corporation tax lower that would that really do much?

  2. The profits which companies make (and are taxed on) ultimately get shared out to individuals as dividends, and therefore corporation tax can be viewed as a sort of “income tax’s cousin once removed”. If you increase the rate of CT, you’ll ultimately be reducing the level of receipts from income tax, and vice-versa. In this sense, Pete M is correct when he states that all tax is ultimately paid not by companies but by individuals.

  3. Tom Tyler –

    It’s true that firms cannot pay taxes. It’s an example of “tax incidence”, where the actual burden of payment falls somewhere other than intended or implied by the law.

    Shareholders do partly pay CT via diminished returns, so do customers with higher prices, but research suggests that the incidence falls greatest on emplyees via lower wages.

    Whenever anyone calls for CT to be raised they are, whether they know it or not, calling for employees to be paid less.

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