The Telegraph tells us that:
OECD figures from 2021 show that 16pc of Ireland’s £423bn gross domestic product that year came from taxes on US tech businesses.
Ahahaha. No.
That 16% would be £67.6 billion. For Ireland:
“Revenue collected total gross receipts of almost €96.6 billion, including €17.5 billion in non-Exchequer receipts collected on behalf of other Government Departments, Agencies and EU Member States. Net Exchequer receipts of €67.5 billion were up by 20% or €11.3 billion on 2020.”
It really isn’t true that the Republic runs on nothing but tax revenue from the Big Tech companies. It would be lovely if it did of course, no one in the country would have to pay income tax, VAT, sin taxes on the stout or anything else. Anyone who has ever been to Ireland will know - even if only from the price of a stout - that this isn’t true.
Now it is true that there’s something very odd about Irish economic statistics. It’s one of the few places in the world where using GNP, not GDP, is necessary (here’s, as with sticky-backed plastic, one we made earlier) as our model.
But that 16% of the economy, that’s more like the Big Tech revenue which flows through Ireland. Sounds about right, that’s similar in size to the difference between Irish GDP and GNP and that difference between the two economic measures is largely the Big Tech revenue that flows through Ireland.
Connoisseurs of corporate accounting will understand that revenue is not the same as profits and of course neither are the same as the tax lifted from the flow of funds.
We do not insist that everyone knows these sorts of details about national income accounting. We would hope that those who write the business pages do - for, of course, the business pages are one of those places where everyone gains their imperfect knowledge of these details.
One of the things (and given that he’s safely ensconced at Berkeley, you might imagine there aren’t that many) we agree with the American economist Brad DeLong upon is his insistence that basic economic numerology is something that should be taught to journalists. He’s gone so far as to actually teach such classes, if any editor wishes us to do so here please do get in touch.
We’re not suggesting that all should be propagandised into agreeing with us on the joys of free markets red in tooth and claw - altho’ we do think the world would be a better place if all were. Rather, those who write the daily record should be aware of basic economic numbers. If only to the sort of level of getting the right number of digits and with a hope of getting the first digit itself correct.
UK GDP is around the £2 trillion mark, the government is in the 40 to 45% range of that. There’re approaching 70 million in the UK, around 30 million in the workforce. Corporate profits are possibly 10% of GDP, the capital share possibly 20% and so on. Just a general guide to what is around and about true - the importance of which is that a statement which is untrue, wildly outside possibility, then becomes jarring and so is checked.
As with on the sports pages, employing someone who didn’t know that 15-0 is a most unlikely association football score (tho’ it has happened) while nothing too far out of the ordinary in rugby football would be considered most, most, odd.
We don’t actually mind whether it’s all called economic numerology or economic numeracy - nor whether we’re involved in inculcating it - but we do recommend it to the editors of the nation.