Welcome to the website of the Irish Government Economic and Evaluation Service (IGEES), which will present analytical and statistical outputs from the Service. The site contains recent analytical papers across a range of public policy and expenditure topics.
Our most recent publications are set out below.
The papers have been prepared by members of IGEES and do not necessarily represent the policy positions of the relevant Departments, Ministers or the Government.
Searching for the Inclusive Tax Growth Grail: The Distributional Impact of Growth Enhancing Tax Reform in Ireland
Abstract: The economic literature suggests that a revenue-neutral shift of tax revenues from income taxes to property taxes would increase GDP per capita in the medium term. This paper analyses for Ireland the consequences of such a shift in the tax mix. In particular, it examines whether this can be carried out in a way that would neither undermine income distribution nor depress government revenue. Simulations using the ESRI tax-benefit model, SWITCH, suggest it is possible to achieve such a broadly revenue-neutral tax shift in a non-regressive way, while lowering marginal tax rates for most taxpayers. In particular, reductions in the Universal Social Charge would reduce marginal and average tax rates and have a positive impact for the income of most households. This could be funded by shifting the tax base toward residential properties, though this might have an adverse effect on income distribution, due to Ireland’s high rates of home ownership throughout the income distribution. The analysis shows that low income groups could be protected through the careful introduction of income-related supports, with revenue losses recovered through a more progressive property tax rate structure. Overall, the simulations show that a shift from labour to property tax can be pro-growth and pro-employment, without equity losses. The paper therefore suggests that tax reform can be inclusive.
The paper is available here: The Distributional Impact of Growth Enhancing Tax Reform in Ireland
Applying Behavioural Economics in Irish Policy
This report provides a summary of Behavioural Economic projects across a number of Departments. A detailed overview of the application of Behavioural Economics is given for two example projects, a trial run by the DPER IGEES Unit with the Department of Social Protection to improve attendance at Group Information Sessions for jobseekers, and a trial carried out by the Office of the Revenue Commissioners to increase responses to the 2013 survey of SME Taxpayers. Short summaries are then be provided for 11 other Behavioural Economics projects which have been carried out by a number of different Departments. Of the 13 examples summarised in this paper some of the projects use randomised control trials, while others use behavioural findings or insights to inform delivery.
The paper is available here: Applying Behavioural Economics in Irish Policy 2016
Analysis of recent Property Price Development and Implications for Local Property Tax Liabilities
This paper reflects the significant residential property price growth which has occurred since the initial valuation date, May 2013, and estimates the implications for LPT liabilities of a hypothetical revaluation at May 2015 property prices. Drawing on a range of data sources, the authors use a transition matrix approach to illustrate the likely changes in LPT valuation bands and liabilities for residential properties. Revaluation is estimated to significantly increase tax liabilities for some taxpayers, with properties in higher valuation bands in May 2013 incurring larger increases in liability. The analysis also indicates substantial regional variation in band changes, with the largest band movements mainly occurring in Dublin.
The paper is available here: Analysis of recent property price developments and implications for Local Property Tax liabilities and revenue yield
Economic Evaluation of the R&D Tax Credit 2016
This evaluation of the R&D tax credit is part of a series of rolling tax expenditure evaluations that are conducted by the Department, in accordance with its Guidelines for Tax Expenditure Evaluation (Department of Finance, 2014). The paper first sets out why R&D is important for economic growth and why government intervention may be warranted. Following this, the current level of business R&D and Government support is reviewed. The previous review of the R&D tax credit recommended greater alignment between the different forms of support for business R&D; with this in mind, care was taken to include information and analysis on R&D grants to enterprises where appropriate in this analysis. A later chapter introduces the methodology we employ, which relies on a treatment and control group framework implemented through difference-in-difference regression analysis. Following this, our results for additionality are outlined, along with discussion on the firm characteristics and dynamics associated with this. A short conclusion ends the paper.
The paper is available here: Economic Evaluation of the R&D Tax Credit 2016