A Major Economic Crisis
INTRODUCTION
BACKGROUND OF THE STUDY Ireland had a major economic crisis happened started in 2008 until 2011 this is because this country are falling into recession for the first time since 1980’s. The government of Irish officially announced it was recession in September 2008. This announcement leads to sharp rise in unemployment in the following months. In January 2009 is the highest month that record number of people claiming unemployment benefit it rose to 326000 people. Before the crisis happen in Ireland, Ireland is the country that impose standard rate of corporation tax is among the lowest in the world at 12.5%.The Irish tax system is primarily in place to pay for current expenditure programs, such as universal free education (including third level), taxpayer funded healthcare, social welfare payments such as old age pensions and unemployment benefit and public capital expenditure, such as the National Development Plan. When the crisis happen revenue of the country low, the government have to bear high of expenditure to solve the problem government have to increase to tax rate. Tax rate is one of the incomes of government. The tax rate imposes by Irish government from the lowers in the world 12.5% to normal rate 20%.
Spending is greater than revenue because of higher compensation of government employees, social benefit, interest on the public debt, subsidies and gross fixed capital formation. Ireland also exposed to problem of property bubble. The residential and commercial property markets went into a severe slump with both sales and property values collapsing. The property developers are currently suffering from substantial over-supply of property, much still unsold. Many Irish property developers speculated billions of Euros in overvalued land parcels such as in the urban Brownfield and Greenfield sites. Ireland entered into an economic depression in 2009. In the first quarter in 2009, GDP was down 8.5% from the same quarter the previous year is
BACKGROUND OF THE STUDY Ireland had a major economic crisis happened started in 2008 until 2011 this is because this country are falling into recession for the first time since 1980’s. The government of Irish officially announced it was recession in September 2008. This announcement leads to sharp rise in unemployment in the following months. In January 2009 is the highest month that record number of people claiming unemployment benefit it rose to 326000 people. Before the crisis happen in Ireland, Ireland is the country that impose standard rate of corporation tax is among the lowest in the world at 12.5%.The Irish tax system is primarily in place to pay for current expenditure programs, such as universal free education (including third level), taxpayer funded healthcare, social welfare payments such as old age pensions and unemployment benefit and public capital expenditure, such as the National Development Plan. When the crisis happen revenue of the country low, the government have to bear high of expenditure to solve the problem government have to increase to tax rate. Tax rate is one of the incomes of government. The tax rate imposes by Irish government from the lowers in the world 12.5% to normal rate 20%.
Spending is greater than revenue because of higher compensation of government employees, social benefit, interest on the public debt, subsidies and gross fixed capital formation. Ireland also exposed to problem of property bubble. The residential and commercial property markets went into a severe slump with both sales and property values collapsing. The property developers are currently suffering from substantial over-supply of property, much still unsold. Many Irish property developers speculated billions of Euros in overvalued land parcels such as in the urban Brownfield and Greenfield sites. Ireland entered into an economic depression in 2009. In the first quarter in 2009, GDP was down 8.5% from the same quarter the previous year is