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.
ESRI Series Number: 201738 Research Area:Macroeconomics Date of Publication: September 11, 2017 Published Online: September 11, 2017 Publisher: Economic and Social Studies Place of Publication: Dublin View External Link
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