Estimates of Receipts and Expenditure for 2025 published

skrooge said:

I like it but the Pyramids have wide bases, Irish tax receipts do not.

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The concern that Ireland relies on a small number of taxpayers for a significant part of its tax receipts is reasonable. Who are these large taxpayers. Among the largest tax payers in Ireland (2021) are 1 Apple 2 Microsoft 3 Google 4 Pfizer 5 Merck Sharpe and Dohme.

These are among the largest companies in the world, with a good spread between Tech, Pharma, Med Devices and Head Office Services. Much better to be taxing the world's largest companies than, well than anything else.

Of course in time some of these companies will fall away, but Ireland's success in attracting them in the first place suggests that we are well positioned to continue to attract their successors.

The one thing that might stop us is our failing infrastructure. With a successful economy building infrastructure is difficult and expensive. Waiting until our economy decays due to the bottle necks and then building when there are lots of unemployed labourers hanging about is well, nonsense.

Brendan Burgess said:

Here is my summary of the document.

We are spending €10 billion more than we are taking in in tax when you strip out the windfalls. Or a deficit of about €6 billion if you strip out the transfer to the Future Ireland Fund.

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Do you think we are likely to earn a lower return on the Future Ireland Fund than the cost of our debt ?

24601 said:

with the current level of concentration risk, even one or two of them moving their IP back to the US during a Trump presidency could see the public finances under acute pressure.

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Never mind moving IP back to the US....I personally see this as rather low probability event.....dont be under any illusions Ireland plays a key role in ensuring the success of US corporates as they step out on to the world stage.....tax deferral through offshore IP structures in low tax economies (facilitated by Ireland/Lux/Netherlands) is well understood by the US administration (on both sides of the aisle) to be a way that the US advantages its domestic companies to succeed globally. The value in this shows up not in the US treasury but in the 401k accounts of US retirees and in the economic dominance which twins nicely with strategic/military dominance of US companies in every sector you care to look at.

More plausible micro scenarios exist that would have serious budgetary consequences IMO.....for example......the iPhone 17 being a complete sales flop because of some engineering error made in Cupertino design studios which tanks sales & profits of that generation of iPhone.....this sales issue at Apple could genuinely swing us from an annual fiscal surplus into a deficit......another would be Google's search monopoly being unseated by an AI competitor that doesn't have their EMEA HQ in Dublin but Amsterdam instead.......these are just two companies.......and this is what concentration risk looks like.

A global GFC type macro downturn whereby our corporate tax receipts collapse for a couple years....while at the same time our ultra-high earners at FDI companies start getting P45's such that income taxes are collapsing concurrently would be a huge problem now that you've taken so many out of the effective tax net.......especially now in the context of Minister Humphreys coming up the genius fragility idea via enhanced dole payments for high earners....that turning a high tax paying employee into a super high cost welfare recipient is a great idea for a country as operationally leveraged to the global economy as we are!

Dont get me wrong.....I'm not saying that it isn't good we're getting the cash right now or we shouldn't be in the FDI game.....we absolutely should......what we shouldn't be doing is extrapolating out elevated corporate tax and income tax receipts and then basing recurring government expenditures against them.....everybody remembers the post-GFC period when Ireland's cost structure had gotten ahead of itself due a credit fueled boom......and because we dont control out currency we had to endure effectively years of an internal devaluation to bring us back into line.....well right now we are engaged in a fiscal spending boom which is fueling a change in Ireland's cost structure which is making us externally uncompetitive vis a vie the rest of the world........ its the road to hell we are on it right now........make no mistake about it.