I really don't see what's so difficult to understand
Yeah, that's because you're hilariously trying to redpill the world on the virtues of socialism. Guess what sociopolitical features Venezuela, Cuba and Greece have in common---I mean aside from desperation, poverty and a prevailing need to blame the CIA for everything from crop failures to overpriced toilet paper?
There is little need to look for external causes for Greek dysfunction---it's not some vast bankster conspiracy---since the same mechanisms and pressures were applied to Ireland, Portugal and Spain. In fact the harshest austerity measures at the start of the 2008 recession weren't even imposed on Greece; that honor goes to Ireland. And yet today
the Irish have one of the fastest growing economies in the EUand Spain has just reported its eighth consecutive quarter as the fastest growing of the big four.
Your BBC article apologizing for the Greek revenue clusterfuck even touches on this., even as it arrives at the exact same conclusion that everyone has been making about the Greek inability to run a government. Too bad it punts on the how the Greek tax-evaders (namely, everyone) absorb government spend and dodge every tax they can manage.
BBC_sl said:
There is also evidence to suggest that the Greeks aren't very good at collecting taxes even outside the shadow economy.
In 2011, an OECD survey ranked Greece as one of the worst rich countries in the world at collecting VAT receipts and social security payments. When the OECD had tried to do similar surveys between 2005 and 2009 they found that the data was simply "missing".
A study quoted by the IMF suggests that between 1999 and 2010 the shadow economy in Greece made up 27% of the country's GDP.
That article then fails to explain how the
University of Chicago paper explains how the widespread tax-evasionis actually performed by the Greeks: with the collusion of its state banks. Greek banks (under tacit approval of state banking authorities) turn a blind eye to WIDESPREAD tax evasion by everyday Greeks who routinely report themselves as self-employed and simultaneously perpetually in debt:
UC Berkeley_sl said:
banks lend to tax-evading individuals based on the bank's perception of the individual's true income. This observation leads to a novel approach to estimate tax evasion using the adaptation of the private sector to the norms of semiformality....We estimate a lower bound of 28.2 billion euros of unreported income for Greece.The foregone government revenues amount to 32% of the deficit for 2009.Primary tax-evading industries are medicine, law, engineering, education, and media.
We provide evidence that tax evasion persists not because the tax authorities are unaware, but because of a lack of paper trail and political willpower.
That paper was cited by the IMF in its last few reports and even by the BBC paper you linked. But how could the Greeks possibly be skipping out on almost 90% of their taxes?!?! The beeb just told me it's an accounting error and the beeb nevar lies.
Well yeah sure, it's definitely done by accounting errors alright. Systemic, state-wide accounting errors.
As the report explains, that's because the Greeks extend their "fakelaki" bribe culture into their banking system and underreport earnings. They file as self-employed (even state employees like doctors file as self-employed haha)
and then file to be perennially in debt so they don't have to pay taxes. To date the
Greeks have the most declared "self-employed" people in the EU; about a full third of the entire working population in Greece
claimsto be legally self-employed---that's almost 10% more than the next highest state which is Spain at 23%.
Economists use self-employment as a indicator for broad-based inefficiencies. But Greek self-employment is actually useful a tax-evasion ploy, because the GREEK BANKS ARE COMPLICIT in widespread underreporting of Greek income so the Greeks can claim to be fully submerged in credit service debt:
BI_sl said:
A number of banks in southern Europe told us point blank that they have adaptation formulas to adjust clients' reported income to the bank's best estimate of true income, and furthermore, that these adjustments are specific to occupations ... Take the examples of lawyers, doctors, financial services, and accountants. In all of these occupations, the self-employed are paying over 100% of their reported income flows to debt servicing on consumer loans
You read that right: More than 100% of the self-reported income of Greece's professional classes is going toward paying off consumer debts.Not, we suspect, because they have massive unbearable repayments to make, but because they're colossally underreporting their income.
About a third of Greeks are self-employed, nearly twice the European average and the highest rate in the EU.
Look at this shit:
By the Greek's own "fakelaki" income reporting system Doctors (most of whom are paid by the state) report to be paying 102% of their income to pay off credit card loans. Accountants (also mostly employed by the state or state banks) report being raped by their loans at the ratio of 115% of their income going to pay their loans. You're asking "WTF is Transport" and why are they paying 102% of their income to service their debt. Wellp, those are Taxi drivers, Ferry boat operators and folks in the metro transit unions---all of whom underreport their income to juuust below their current debt load so they skip out on tax deductions.
Most telling is the "Restaurant and Lodgings" line, that's TOURISM, Greece's largest industry and by far their largest group of self-employed individuals. So there we see Greece's last, best hope for an economic recovery and yet all those bed-and-breakfasts, beach guides, restaurateurs and hotelliers claim to be mom-and-pop operations and grossly underreport their income so as to appear 106% under debt to avoid paying taxes.
That's why any tax remedies on the Greeks have been sub-optimal until recently, they are institutionally and
perhaps even culturallydisinclined to behave like a modern economy.
