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How Sensitive is Irish Income Tax Revenue to Underlying Economic Activity?

Author

Listed:
  • Yota Deli

    (University of Glasgow)

  • Derek Lambert

    (Houses of the Oireachtas)

  • Martina Lawless

    (Economic and Social Research Institute, Dublin and Trinity College Dublin)

  • Kieran McQuinn

    (Economic and Social Research Institute, Dublin and Trinity College Dublin)

  • Edgar L. W. Morgenroth

    (Economic and Social Research Institute, Dublin and Trinity College Dublin)

Abstract

In this paper we examine the elasticity of Irish personal income taxation revenue with respect to aggregate national output – both GDP and GNP. This enables us to estimate the sensitivity of this key taxation aggregate with respect to changes in economic activity. Understanding the elasticity of the different taxation components vis-à-vis their underlying economic activity should enable policymakers to place the public finances on a more sustainable footing and hence avoid the sharp booms and busts that have characterised Irish taxation receipts over the past 20 years.

Suggested Citation

  • Yota Deli & Derek Lambert & Martina Lawless & Kieran McQuinn & Edgar L. W. Morgenroth, 2017. "How Sensitive is Irish Income Tax Revenue to Underlying Economic Activity?," The Economic and Social Review, Economic and Social Studies, vol. 48(3), pages 317-336.
    • Handle: RePEc:eso:journl:v:48:y:2017:i:3:p:317-336
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    References listed on IDEAS

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    1. Acheson, Jean & Deli, Yota & Lambert, Derek & Morgenroth, Edgar, 2017. "Income tax revenue elasticities in Ireland: an analytical approach," Research Series, Economic and Social Research Institute (ESRI), number RS59, June.
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    Cited by:

    1. Deli, Yota & Rodriguez, Abian Garcia & Kostarakos, Ilias & Varthalitis, Petros, 2018. "Dynamic tax revenue buoyancy estimates for a panel of OECD countries," Papers WP592, Economic and Social Research Institute (ESRI).
    2. Acheson, Jean & Deli, Yota & Lambert, Derek & Morgenroth, Edgar, 2017. "Income tax revenue elasticities in Ireland: an analytical approach," Research Series, Economic and Social Research Institute (ESRI), number RS59, June.

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    Keywords

    income tax; Ireland;

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