Taxes will have to rise to pay for the big increases in public spending announced last year or we’ll run a high risk of plunging the public finances into crisis, Central Bank economists have warned. The Central Bank economists say that spend, or around €19bn more last year than government took in, was needed and should continue over the short-term in order to stabilise the economy. "The analysis shows that permanent increases in current spending could only be sustainably accommodated if accompanied by offsetting revenue raising measures. In their model, the researchers say they assume a rise in income taxes to fund the spending, but that a range of options including carbon taxes and VAT could be considered. However, the Central Bank researchers reject that notion.

Source: Irish Independent March 22, 2021 16:31 UTC