Boom times (2016 Special Edition)


I have pulled out corporation tax figures so that corp tax and the rest can be compared.

I have doubled 6 month figures for 2016 to get a putative figure for the year, but it is not that meaningful because of end of year effects.

Extrapolating first six months of 2016 to a twelve months figure by comparing to 2015, I get 2016 all other tax to be 8% higher than 2015.

Year---------------------------total outturn------------corp tax----------------all other tax-------(y-o-y increase%)

2016 (extrapolated)----------------aaaaa--------------bbbb--------------------41,785-------------(8%)
2016 (2 times 6 months)-----------45,046-------------6,356-------------------38,690*




2012------------------------------------36,646------------4,216 --------------------32,430------------(6%)


37% increase for all other taxes for five years since 2011.

Average 6% p.a. over 5 years, or 7% p.a. for the last two years.


Well its seems someone has not the slightest idea who has been buying a big chunk of T Bills, sovereign debt, corporate debt and stocks the last four or five years. The Feds have pissed away close to $3T doing this, the ECB are into their second Euro 2T as we speak and last I heard the Swiss CB is still the second biggest owner of Apple stock. And the BOJ equity holdings are somewhere north of 1T by this stage. $ not Y.

Some of us were following closely when Japan first went this route back in the '90’s. This is a very familiar path. Which can continue for decades. If you have enough trillions of domestic savings to burn through. The subject was discussed in detail on the pin back in '09/'10. Was the world going to go Japanese? And the answer it seems is yes.

Another thing. Again, you do understand that the rise in stock indices is almost completely due to stock buy backs financed with zero cost corporate debt, CB intervention, the massive pile into ETF’s and just straight price inflation. In the real world economy in the US price inflation for the last decade has been at least 5% plus per annum and closer to 10% some years. I have not seen such a sustained increase in real world prices since the '70’s. The official inflation numbers are drive by the cost of COLA’s and nothing else. So deliberately distorted.

So factor out the cheap debt and direct CB intervention and the actual underlying performance of the stock markets has been as catastrophic as the mid / late 1970’s. Without the CB financed serial bubbles we are looking at a 1930’s style flat lining. Just look at how the markets react when there is a hint the CB’s are going to turn off the free money.

The last seven years have been economically catastrophic. The immediate effects have been cushioned by the CBs throwing out every last principal of monetary prudence to buy some time. To the tune of $7T plus. But as a result all the traditional economic levers are gone and they are reduced to trying harder and harder to blow more and more bubbles. With less and less effect. This is pure South American economics.

Last point, you have been following the massive layoffs in the trading rooms and related groups in London and NYC the two quarters. Especially in fixed incomes. It seems the people in the business, you know, who actually do this for a living, are expecting a god almighty crash some time soon. Whats going on at the moment is a more agressive more proactive version of the resuructuring / layoffs that started around Q3 2007. I expect Q3/Q4 2016 to have a very good chance of being another Q3 2008. But more political, and more like what happened in Asia in 2007.

But of course, this time will be different.

Its very easy to predict the what. It is impossible to predict the when. Except in hindsight.


First. It was a quick post. Pure ephemera. Not a fucking research paper. I scanned the numbers in from to me used the most relevant and happened to look one row to the left. Big fucking deal. I immediately made the correction on noticing the mistake. Second we discussed in detail here about four years ago just how total garbage the CSO number were when it came to getting an idea what was actually going on in the economy. That standard mid size economy econometric models bore no relevance to the Irish economy as it was little more than a small domestic economy with a huge MNC tax evasion sector bolted on. Then there was the fact that you had the bizarre granularity of the CSO numbers. Lots of obsolete sectors with small 6 activity and then single entries for sectors that were 9 and 10 figure with no break out. Basically the small domestic sector recorded in detail and the MNC sector deliberately obfuscated in a very few entries.

So sorry for using constant and current numbers without making the necessary multiplier adjustment but I used what was immediately to hand and in the context of the CSO statistics it makes damn all difference anyway. Ireland is so out of whack with any normal mid sized economy that all econometric pontifications based on a few percent here and there are utterly meaningless. The Irish economy by this stage is just little more than a much bigger version of the Cayman Islands.

Your last statement GNI/GNP makes no sense. We have been talking about GNI/GDP. In normal economies GDP=GNP. Give or take. Only Ireland has a big GNP/GDP gap. And the GNI / GDP gap is even larger. Unlike normal non tax haven economies.

Ireland is a tax haven economy and little more. Which ever way you slice the numbers.


“The reason it’s on the rise is because probably the boom times are getting even more boomer.”


No, the gap between GDP and GNI is lower than the gap between GDP and GNP. In 2015, GDP was €255.8 Bn, GNI was €203.9 Bn and GNP was €202.6 Bn

Anyone who follows economics knows there is a gap between GDP and GNP/GNI caused by the amount of multinationals here. But the gap is around 20%, make a claim that it is 40% like yesterday and it will be shot down.


an almost religious fervour to a mistaken ideology.

*“Fesd have pissed away $3T” buying T-bills…?
Now ask yourself, what is a dollar? Answer: It is a zero duration T-bill.

If that doesn’t set you down a road of understanding, little will.
Anyway, you can keep being wrong for as long as you want, and justifying it through whatever stretched means you want, that’s just what bad traders do.


think this post and figures are useful for this thread:


+1. Retail sales growing seems to be a good indicator.

#49 … -1.2720129

**The Financial Times: **"The Irish have written some notable works of fiction — James Joyce and Flann O’Brien produced imperishable classics. Now there is a new addition to the national oeuvre — the official narrative of the country’s economy.

**Nobel Prize-winning economist Paul Krugman: **“Leprechaun economics.”

New York Times: "Politicians, lawmakers and officials have derided ‘inversion deals’ which allow an American company to move its headquarters overseas to cut its tax bills. In Ireland, they are celebrating them.

**Bloomberg: **"No Western country has posted such a rate of expansion in this century, though small but oil-rich Azerbaijan grew 34.5 percent in 2006, when oil prices rocketed.

“Unfortunately, Ireland’s freak growth has less tangible causes. It is a result of tax shenanigans and a clear indication that GDP increases shouldn’t be considered the ultimate measure of policy success.”

**Huffington Post: **“Want to grow your economy? Turn your country into a tax haven.”


Ireland’s Economy Grows 26% as U.S. Companies Chase Lower Taxes - -> … ower-taxes

Irish tax break addiction and failed entrepreneurship - -> … urship-651


Ok so everyone knows the figures are bullshit - but (as a non expert) can someone explain if that matters?

Is the risk the government start trumpeting how great they are, the public believe them and want a slice so they match spending somewhat to GDP growth?

Or is it a case that headlines like this might make US authorities take a harder line on companies funneling cash through Dublin?


Similar to the BS that happened in 2001-2007 where the not-sustainable construction bubble screwed things up big time, and the GDP figures in the day should have highlighted those unsustainable moneys. Main difference is probably that at least back in the day it was sort of “real” money (even if paid for by credit), whereby last years figure are fool’s gold.


While you are right it doesn’t address the substance of his criticism. The fact is that the CBs have been throwing money at the problem with little to no result. Can this continue?

After reading Debunking Economics by Steve Keen I have now come to the almost surreal conclusion that someone who has watched ‘money as debt’ on youtube probably has more of an idea how an economy works than most neoclassical economists who seem to largely ignore the role of debt. Alternatively, Michael Hudson and Steve Keen adhere to this ‘Post-Keynesian’ economics in which debt plays a central role.

So the basic problem is debt and its growth and destruction. QE is an attempt to increase the money supply (debt) and ameliorate the problem of slow debt growth (society is maxed out) but it is not working as intended (mainly as Daniel Plainview’s signature points out banks do not loan reserves so increasing them makes little difference) but instead is largely responsible for asset/stock bubbles.

So how exactly is the economy to grow without an increase in debt? Impossible.

Here are two articles that outline what I am talking about (although watching money as debt is useful): … a32e65358c … -Decade-14

#54 … my-and-eu/

There’s 280million that the people who actually pay tax in Ireland will have to stump up; that is the cost of a green jersey.


The IDA can actively seek to persuade certain kind of company MNCs to base in Ireland such as Google, Facebook, who we don’t make much CT off but we get their Income tax.

But the Irish Gov are caught with the new EU system of counting the like of aircraft leasing. Our CT rate is encouraging many of them to base here now with little employment generation behind it.

Reckon Luxembourg’s figure will be massive too…


How much tax (if any) is likely to be paid on the “fake” new chunk of GDP, and what therefore will be the net impact on the exchequer of this new contribution to the EU?

As always, there seems to be no real analysis of this in any of our media, but I’d assume that the net impact is definitely not just the €260m being reported. If they bring in no extra tax, or €260m extra, or €500m extra, those are three very different stories.


I think the reporting on this issue in the media (especially RTE) has been very poor on this over the last 24 hours.

Corporate tax take was over 50% ahead of target last year. In cash terms that is €2.3 billion. In the first 6 months of 2016 it was over €500m ahead of target again.

Coming up to last year’s budget, Michael Noonan was asked whether the surge in corporate tax was a once off or repeatable and he said it was largely repeating. At the time, there was speculation as to how such a rise could come about in one year and we now know it was due to a small number of very large companies changing their tax domicile status to Ireland.

The department of Finance hasn’t split out exactly how much of the corporate tax surge is directly linked to these newly ‘Irish’ companies that increased GDP in Q1 2015 by about 20%, but the correlation is likely to be very high.

So in a rough guesstimate, we will benefit this year to the tune of about €2.5 billion in higher corporation tax and pay out maybe €300 million more to the EU budget due to these companies moving to Ireland. Not such a bad deal when you put it like that, is it?


You are saying that an increase of about 42billion in GDP which may or may not be attributable to inversions and brazen offshoring will result in a net 2.2billion increase in corporation tax; i.e. these corporations will pay 5% corporation tax. I don’t believe they will be paying anywhere close to 5%.


also, when your actions are shrinking the GDP of your partners in the E.U. they are contributing less to the E.U.

The reason you are not seeing report in the media is because there is no appetite for the story and there aren’t Reporters competent to report it.


Well corporation tax has cumulatively been €2.8 billion ahead of target over the past 18 months. It was 50% ahead of profile for 2015 and 19% ahead in H1 2016. While economic growth is strong, there is no way underlying corporate profitability is growing at the levels seen in the tax take.

At the same time corporate taxes were booming, GDP surged by around 20% more than expected which has now been attributed (by the CSO - so I don’t think it’s a case of may or may not) to a small number of tax inversions and/or corporate tax-avoidance machinations.

You doubt that all of that corporate tax surge can be attributable to these tax avoidance schemes? Fair enough. Let’s be conservative and say that ‘only’ €1 billion of the gain in corporate taxes is attributable to this activity. That is still about 4x what we will have to paid to the EU budget for the 20% increase in GDP last year.

Whatever way you spin it, we are quids in. And if these companies ever jump ship to some other location, then our GDP will fall and so will our contributions to the EU budget.