Discussion on Greek political, financial issues + new elections

[Stavroforos]

I don't defend the upper classes, I refuse to defend the lower classes. I believe everybody has to pay their part here, and yes that includes the poor, because yes they're among the guilty. There's a constant argument from Greeks that only politicians, bankers and other elites were behaving inappropriately - and that's blatantly untrue. I fully support measures to get the rich to contribute as they should, too.

Indeed, beyond what Greeks may post on internet forums, it's disturbing to see many Greeks here in Greece unwilling to accept the part the average Greek played in bringing about the crisis. They acknowledge the existence of client-patron state but few acknowledge their own part within it. What I am willing to accept is that since this client-patron relationship has been around since the beginning of the modern Greek state, it's a reality that is hard to escape, since there's no reward for honesty and abiding by the law, and in many cases it is in fact punishing to go against these established ways of operating.

[alhoon]

since this client-patron relationship has been around since the beginning of the modern Greek state,

Ahem... this client-patron relationship with governments have been around since the Athenian Hegemony, continued to the Byzantine era, under the Turkish occupation, after liberation and it's one of the many things we inherited from our ancestors and we spread throughout the Balkans through our conquerors (Romans and Turks).
I don't expect it to ever go away. At most, I hope it will lessen.

[Stavroforos]

Ahem... this client-patron relationship with governments have been around since the Athenian Hegemony, continued to the Byzantine era, under the Turkish occupation, after liberation and it's one of the many things we inherited from our ancestors and we spread throughout the Balkans through our conquerors (Romans and Turks).
I don't expect it to ever go away. At most, I hope it will lessen.

Indeed, which is why I also don't think it will go away any time soon.

[nemgod]

You're saying that no poor people evaded taxes, unless they did, in which case they were not really poor?

Half the population of Greece was on the fiddle. No scapegoating allowed.

Even IF (no sources backed up to claim your comment) That still leaves half who were not. Half of the country who did no wrong yet are being punished.

If this was a court case then you would be punishing innocent people. You can't just do that. You pinpoint those who ed up. Doesn't matter how long it takes. No innocent person should be punished ever, no matter if it is efficient. Instead take the money from the richest ups who hide it in Switzerland and be done with it. There is more money in there than the greek debt, do that and then work on sorting out the tax burden.

[neoptolemos]

Even IF (no sources backed up to claim your comment) That still leaves half who were not. Half of the country who did no wrong yet are being punished.

If this was a court case then you would be punishing innocent people. You can't just do that. You pinpoint those who ed up. Doesn't matter how long it takes. No innocent person should be punished ever, no matter if it is efficient. Instead take the money from the richest ups who hide it in Switzerland and be done with it. There is more money in there than the greek debt, do that and then work on sorting out the tax burden.

Seconded

[Stavroforos]

The whole reason people evade taxes is because they are usually successful in doing so, so it would be impossible to accurately track down those who evaded taxes and those who didn't in the pass. The only way to go forward is to catch whoever has evaded taxes and make it much harder to do so in the future. The thing about being in a society is that it tends to do well or do poorly together, so the supposed "good" 50% of Greeks still has to bare the burden of living in a society which allowed the other 50% to get away with breaking laws.

[Knight of Heaven]

The whole reason people evade taxes is because they are usually successful in doing so, so it would be impossible to accurately track down those who evaded taxes and those who didn't in the pass. The only way to go forward is to catch whoever has evaded taxes and make it much harder to do so in the future. The thing about being in a society is that it tends to do well or do poorly together, so the supposed "good" 50% of Greeks still has to bare the burden of living in a society which allowed the other 50% to get away with breaking laws.

Yes that is very nice and all, but i dont think you show understanding on why the Greeks evade tax. It isnt because it is easy alone or that is the only reason, as far i understand, the main reason is that Greeks, even more than their counterparts elsewhere, feel that their taxes are wasted, Greece’s public sector is more corrupt than that of any other EU state, according to Transparency International, a pressure group. Satisfaction with public services is extremely low. No wonder, then, that many Greeks have few qualms about not paying their share.
Greece also has high self-employment, which tends to lead to bigger underground economies. It is relatively easy for those working for themselves to evade income tax and social-security contributions. Greeks have plenty of incentive to do so: government levies account for 43% of labour costs, compared with the rich-country average of 26%.

A big shadow economy, naturally, crimps government revenue , but a severe tax crackdown might not be that beneficial in changing the paradigm.. from what i seen since 2011 it hasnt been.
Not forget that over 25% (at least) of Greeks are officially unemployed; the shadow economy is a lifeline to many of them. Two-thirds of shadow earnings are spent almost immediately at businesses that do pay tax. Too severe a crackdown on tax evasion might put all that in jeopardy, making matters worse effectively. It has been the case for many, where you seen people effecively relegated to below poverty lines.
Many small firms in Greece deliberately avoid taking out loans because it involves being more transparent. And thus Unproductive firms pay low wages.

Take a law passed in 2011 but yet to be implemented, which mandates that certain workers use time clocks to monitor their working hours. It may simply discourage bosses from hiring, thus bringing in little revenue while lowering incomes.. even more.

Greece should instead try to coax shadowy businesses into the open, offering tax breaks to small businesses that take out loans, as well short-term tax exemptions for those who work a second job at night. Both schemes would encourage workers and firms to register with the government, making it easier to shrink the shadow economy over time. For example.
The best cure, though, would be a sustained economic expansion. The urge to go underground will wane if that is the case over time. That is what happened from 1993 to 2003, when growth averaged 2.5% a year and the shadow economy shrank by a third.
Of course sustained economic expansion is laughable at best currently, the root of this problem is an economic one, shocker i know...

Im afraid it is far from being a simple matter of tracking down tax evaders ( wich is impossible to work 100%), and quite possibly very costly as well, and specialy when there is much more things at stake.
Imo.
An interesting note, on actualy lower income jobs, or the poor werent the greatest responsables of the Greek tax evanding monster phenomena.. as alot of people in this thread do so belive aparently...

THE RESEARCH

A native of Greece, Tsoutsoura knew tax evasion was a fact of life in her home country. But just how pervasive was it? She and Morse, along with Nikolaos Artavanis, assistant professor at the University of Massachusetts at Amherst, were determined find out.
The researchers realized Greek banks had a strong financial incentive to calibrate their clients' true incomes against what they reported to the government in order to determine how much loan money to offer. So Morse, Tsoutsoura, and Artavanis obtained access to loan data from one of the country's large banks and compared it with government data. They documented what they found in their paper, "Tax Evasion Across Industries: Soft Credit Evidence From Greece."
They found that self-employed, highly educated professionals such as lawyers, doctors, and accountants evaded more income tax than lower income occupations. In sum, tax evasion by the self employed was worth at least a stunning total of $38 billion (€28 billion) in 2009.
Assuming that money would have been taxed at 40 percent, the lost revenue was equivalent to almost a third of that year's budget deficit shortfall of $48 billion (€35.4 billion).
In their data comparison, the authors found that if one believed the monthly income that self-employed households reported to the tax authority, these households would have had to spend 59 percent of their monthly income just servicing debt. In the case of the highly educated professionals - lawyers, doctors, financial service professionals, and accountants - the ratio rose above 100 percent.
The authors understood that these numbers were outlandish. Not only would such accounting leave loan-takers with, at most, a fifth of their income to live on, it also would mean a borrowing rate far above the 30 percent level seen as standard practice by banks in Greece and elsewhere across Europe and the United States.
In reality, average self-employed workers earned almost twice as much money as they declared in their tax returns. The biggest offenders were professionals, with doctors earning two and a half times what they reported.
"It is one thing to say that an economy has pervasive tax evasion, it is another thing when you can demonstrate it with scientific evidence and put it out as a platform for people to use," Morse said.

http://www.chicagobooth.edu/magazine/35/2/feature1.aspx

[Stavroforos]

I'm fully aware of why people in Greece evade taxes, and your argument isn't off the mark, but it's only right in a roundabout sort of way. Greeks don't evade taxes because they don't see any return on their taxes, but instead because they can and because everyone wants to pay as few taxes as possible. However, beyond the weak enforcement of tax collection, the fact that tax money doesn't have any visible return in the form of amenities means that people just have one additional reason to pay taxes.

Let's oppose this to your average German or Swede taxpayer. Most of the times I've heard them talking about taxes, they seem to think that they are high, and they will try to find ways to pay the least amount of taxes possible, because everyone wants to have more money. What stops them from actually evading taxes though? First and foremost it is the higher probability of getting caught for those who contemplate evading taxes, but the respect for law and order for the majority of people who don't contemplate tax evasion. Having respect for the law and the state means that you know it can catch you when you do something wrong, but that what you're giving up will be put to use. In Greece, very few people don't pay taxes solely because they don't see that money going somewhere, but the fact that that money doesn't go anywhere along with the higher possibility for respect and the corruption within government make it much easier to do, both practically and ethically.

Greece's reality forces one to be very pragmatic and realist in order to achieve their short-term goals, but the problem is that this same mentality will constantly cause long-term problems. Most Greeks weren't happy to participate in corruption, but most of them viewed it as a necessary evil for day-to-day works. If your father is in hospital and needs surgery and the surgeon asks for a bribe, you're going to give him the bribe rather than report him to the authorities, who may or may not have results in bringing this person before the law anyway. Normally that would be an extreme example for most people outside Greece, but the phenomenon of bribing doctors to perform surgeries, prescribe medicine, etc., was very wide-ranging until recently. Both the doctor and the patient (or his close ones) were engaging in corruption and tax evasion, but alternatives don't really exist. Now, to take it on a less life-or-death scenario, say you want to get your new license plates or register your car...you can wait hours and days or weeks in lines or pay a small bribe to get it done quickly. Here, it's not a question of someone dying if you don't bribe someone, but of it being much more convenient to give a small bribe to get your job done much faster. It's these sorts of activities which Greeks have been engaged in day in and day out which make everyone complicit in the state of Greece, but it's really a reflection of Greek culture than it is a reflection of deliberate law breaking. When thinking of Greece, I end up thinking of how applicable the northern model of governance, of responsible states and responsible citizens, is to Greece, and that the two should simply be viewed as different societies and different approaches rather than being held up to the standards of other countries.

[Knight of Heaven]

An interesing CNN article. btw

"Wherever the olive tree grows, you won't find much tax being collected," the mayor of a small town in southern Spain told me a few years ago. He shrugged; such was life.
He probably had no idea that some high-powered academics were about to come up with the same conclusion. When they analyzed Europe's "shadow economies" -- defined as areas that fall beyond the reach of the taxman -- those of Greece, Italy, Spain and Portugal were much larger (relatively) than those in northern Europe.
That is partly because of the higher number of self-employed and family businesses, which tend to deal in cash and pay little tax. But to many economic commentators, tax evasion is also a national pastime in much of southern Europe, and a significant factor in the region's burgeoning financial crisis.
According to a 2007 paper by Austrian economist Friedrich Schneider, the shadow economy in Italy accounted for 22.3% of gross domestic product (GDP), that of Spain 19.3%; Portugal 19.2% and Greece a staggering 25.1%. By comparison, the U.S. shadow economy was 7.2% of GDP. A recent European Union report came up with similar figures.
Silvio Berlusconi mused several years ago that high tax rates in Italy made evasion a "natural right" for many. And the evidence does suggest that wherever tax rates and social security contributions are high, the shadow economy is larger.

http://edition.cnn.com/2011/11/02/op...dow-economies/

Let's oppose this to your average German or Swede taxpayer. Most of the times I've heard them talking about taxes, they seem to think that they are high, and they will try to find ways to pay the least amount of taxes possible, because everyone wants to have more money. What stops them from actually evading taxes though? First and foremost it is the higher probability of getting caught for those who contemplate evading taxes, but the respect for law and order for the majority of people who don't contemplate tax evasion.

lets face it it is easier to want to pay taxes when you have a clear return in social services (etc), and see working results of the taxes you pay... any individual would rather pay taxes ( even work) in Germany or Sweden or even Norway, then to pay it in Greece... this respect of authority is usualy earned as it is how respect itself works, a dissatisfied population have more problems in folowing authority or the rules that much is granted.
Not discounting matters proper of the local economic tissue, that seems to function in a different manner traditionaly.
Small/self business and Family business, family households etc.

[Akrotatos]

lets face it it is easier to want to pay taxes when you have a clear return in social services (etc), and see working results of the taxes you pay... any individual would rather pay taxes ( even work) in Germany or Sweden or even Norway, then to pay it in Greece... this respect of authority is usualy earned as it is how respect itself works, a dissatisfied population have more problems in folowing authority or the rules that much is granted.

This. I see it myself with the retirement and insurance fund for engineers. It used to be good but nowadays we pay tons of money for health care and who knows what pension (if I live enough to collect it or it doesn't go bankrupt).

If I could I would not pay at all and use the money for private healthcare and pension fund.

Multiply this feeling to every public sector. Everything is in bad state: education is bad, healthcare is worse, state of roads is a joke, public services are a trip to hell, no protection from the government regarding working rights (I work 10 hours per day on average and can only dream the actual 8-hour day in Europe)...I am sure to forget many things. And not only every single thing the government oversees is , we have to pay extra.

Education? If your child is not exceptionally disciplined and smart and you can't afford to pay private tutors you can pretty much forget a higher education.
Healthcare? You end up paying for everything, not to mention any bribes you might have to pay to get treated like a person. At least we are not at US levels. Yet.
Roads? Tolls and road taxes must be among the most expensive in Europe.

And so on. Yeah, I am going to pay taxes for the first time in my life this year (I was a student and a conscript previously) and I am not very thrilled to pay taxes from which I will not benefit at all.

[Platon]

There is one pretty easy sollution. We remove cash and have all transactions made with pay/credit cards. This way the tax authorities can track and tax all transactions - problem solved!
I've suggested this in many discussions but people simply don't get it.. I mean the technology is already here - why would it be so difficult to implement??

[removeduser_487563287433]

lets face it it is easier to want to pay taxes when you have a clear return in social services (etc), and see working results of the taxes you pay... any individual would rather pay taxes ( even work) in Germany or Sweden or even Norway, then to pay it in Greece...

That's hilariously circular logic.

Even IF (no sources backed up to claim your comment)

Might want to reread my post. Then I might reply to you.

[Knight of Heaven]

That's hilariously circular logic.

What isnt in this whole issue? More sequeezing, and higher taxes often means an increase of the shadow economy look at the historical examples of this.
More recently Italy.
Sociologicaly, and even the economicaly the tissue of southern european countries difer from the North europeans. It is a different reality, historical even.

Statistics cleary see a strong gap in trust of their instituitions in the South of europe, comparing to those of north of europe as well. ( even if the tendency is decreasing overall, not a good sign for Europe i guess)

A good hint is that the shadow economy has seen a boom under the troika austerity in this countries.
In Spain alone, as of 2013, up to 30% of business was hidden from government and tax inspectors, while in 2007 was at 19.3%

So while might be a circular logic, it is how it is, and imo the way to break that cicle is as i explained in previous posts.
Mostly sustainable Economic expantion, and proper policies to facilitate that change in the economic tissue and functioning.
As Greece did in the 90s, the same with Portugal for example, when these countries did witness a fast development, too fast maybe considering current state of afairs.
It is interesting because serious progress was being made in south of europe regarding the shadow economy, until the crisis came, and austerity policies begun to be implemented. Not only that progress was ground to a halt, but shadow economy begun booming again.

But Europe isnt in an Era of economic growth atm ( on the contrary, cleary severe economic depression as a whole), and so Greece and the South of europe cant be there.
My point is cleary all this afair made matters worse not better in this particular department.
While we discuss fiscal methods of fighting tax collections, and the merits of anti-tax evasion policies, when the core problem is economic, it is a hilarious logic as well.

Another example as in 2012..
http://www.reuters.com/article/2012/...80F0WA20120116
And as of 2014....
http://algarvedailynews.com/news/420...es-record-high

The black economy is nearing its full potential in Portugal with some €46 billion now estimated to be traded without trace or taxation...The government measures designed to fight tax evasion appear to have had little or no impact on a healthy underground economy as €46 billion has slipped past the taxman in a 12 month period, the equivalent of six times the NHS budget.

[Garbarsardar]

Even IF (no sources backed up to claim your comment) That still leaves half who were not. Half of the country who did no wrong yet are being punished.

If this was a court case then you would be punishing innocent people. You can't just do that. You pinpoint those who ed up. Doesn't matter how long it takes. No innocent person should be punished ever, no matter if it is efficient. Instead take the money from the richest ups who hide it in Switzerland and be done with it. There is more money in there than the greek debt, do that and then work on sorting out the tax burden.

Two things here:

No one suggested that innocent people should be penalised. What was reiterated was that not only rich people evaded taxes. The old, retired, and very respectable plumber that usually fixed the drains, was never a rich guy and he never issued any receipt.

I am certain that a considerable number of my compatriots are innocent of tax evasion; I am equally certain that we should carry a common responsibility (the ones who were eligible to vote) for our choices in the not too distant past.

There is one pretty easy sollution. We remove cash and have all transactions made with pay/credit cards. This way the tax authorities can track and tax all transactions - problem solved!
I've suggested this in many discussions but people simply don't get it.. I mean the technology is already here - why would it be so difficult to implement??

Remove cash wordwide? Or even Europe-wide? Because this is the only way what you propose would work (for a while).

[removeduser_487563287433]

What isnt in this whole issue? More sequeezing, and higher taxes often means an increase of the shadow economy look at the historical examples of this.

No, let's be totally explicit. You implied it's okay not to pay taxes if services are shite. But of course, services won't be good until there's the funding to pay for them. That's the circular, self-defeating logic.

[Knight of Heaven]

No, let's be totally explicit. You implied it's okay not to pay taxes if services are shite. But of course, services won't be good until there's the funding to pay for them. That's the circular, self-defeating logic.

I didnt implied anything. I stated in my view how it is in the south of europe, and how people see it, i never said it was ok not to pay taxes.. if anything i implied why people in south of europe dont pay taxes.

Being explicit here Troika austerity failed and keeps failing combating tax evasion, i dont see how can you defend it.
Given that Shadow economy actualy has been growing, not decreasing.
Something cleary is not right, if pushes people to evade tax even more.
In italy...
http://www.transcrime.it/wp-content/...In_a_time_.pdf

[removeduser_487563287433]

I didnt implied anything. I stated how it is in the south of europe, and how people see it, i never said it was ok not to pay taxes.. but you are ignoring my posts.

I will take you at face value if you say that wasn't your meaning, but it certainly seemed clear in your post.

B

eing explicit here Troika austerity failed and keeps failing combating tax evasion, i dont see how can you defend it.
Given that Shadow economy actualy has been growing, not decreasing.

Source on this?

[alhoon]

If this was a court case then you would be punishing innocent people. You can't just do that. You pinpoint those who ed up. Doesn't matter how long it takes. No innocent person should be punished ever, no matter if it is efficient. Instead take the money from the richest ups who hide it in Switzerland and be done with it. There is more money in there than the greek debt, do that and then work on sorting out the tax burden.

By the same logic, not every rich person that has money in Switzerland stole it from Greece.

And BTW, democracy is a team sport: We all fail together for the decisions (or indecisions) or poor judgment of the majority. Including the few that didn't evade taxes.

The old, retired, and very respectable plumber that usually fixed the drains, was never a rich guy and he never issued any receipt.

...
I am equally certain that we should carry a common responsibility (the ones who were eligible to vote) for our choices in the not too distant past.

Agree 100% but:

I am certain that a considerable number of my compatriots are innocent of tax evasion

I am not. Virtually everyone I know evaded taxes when they could. Including the "We can't evade taxes!" Public employee groups.
When you pay 50Euros without receipt for the plumber you mentioned to clean your drain instead of 70 Euros that include tax, you both evade tax.

Now, think again please and tell me how many crazy people you know, that consistently ask for receipts from technicians and taxis willing to shoulder the tax, even when the rest of their family calls them morons and scream for the plumber to ignore them and get just the 50 Euros without receipt and without the extra 20 Euros.

If you think those are half the population then you know much, much more responsible people than I do.
If those few weirdos that ask for receipt and pay ~40% more are 5% or less, then we come in contact with the same society.


When we were doing repairs in a house we had for rent this summer, my family arranged with the engineers and technicians that painted it, redecorated it, fixed electric stuff and did plumbing to get paid when I wasn't around. You see, I'm a weirdo that insists we get receipts even when it costs 35-40% more.
They tell me "we saved thousands from taxes! We couldn't afford all the stuff we did if we paid all the taxes!" as if it matters.
That's not money we "saved", it's money we stole from pensioners, from schoolkids etc. in order to buy better bathroom stuff so we could ask a higher rent.

[Knight of Heaven]

I will take you at face value if you say that wasn't your meaning, but it certainly seemed clear in your post.

B

Source on this?

Realy? every report i read continously over these last few years, says the same thing. Here in Portugal despite tight fiscal measures, and increased revenue, deficit situation is still not balanced , and shadow economy as reportedly increased...
Sources are the Institute for National Statistics, and Centre for Economics and Fraud Management at the University of Oporto.
Various news outlets, talk about the resurgent of the Mafia in Italy, and how it has become recently the number one credit lender.
Acording to the economist estimated 24% of all economic activity in Greece went undeclared to evade tax and regulation..
Obviously those are all estimates, given that is very dificult to pinpoint with accuracy.
Here is one from last year about Spain in the Guardian.
http://www.theguardian.com/business/...omy-gdp-growth
Another interesting blog about the subject in spain.
http://expatmadrid.com/2013/05/22/au...round-economy/
The new york times
http://www.nytimes.com/2012/05/17/wo...lump.html?_r=0

Even without offcial numbers, i can see the difference here in Portugal, every service, either repairman, construction, usualy small medium busyness presents us a budject with VAT or without VAT, more often then used to be. And i can understand why.

But then again that is my personal experience, but from what i can tell of data arround is... indeed the shadow economy is increasing.

[removeduser_487563287433]

I would like a source that tax evasion in Greece has increased since the austerity measures, as you claimed, please.