Wednesday, May 12, 2010

Tax Evasion As An Olympic Sport

With the Greek economic collapse dominating the foreign news lately, this piece from Sunday’s Guardian is well worth reading. American pundits, particularly those on the Right, have used the Greek collapse to push the argument that public welfare programs are inherently bad for a country. And while Greece has had an almost unbelievably generous public welfare system (like a retirement age of 54), there’s another factor that has helped to push the country to the brink of economic collapse – the way the Greeks treat tax evasion as their national pastime.

The Guardian notes that despite the sprawling suburbs that surround Athens, only 15,000 Greeks claim incomes of over 100,000 Euros. When the Greek government tried to use Google Earth’s public access satellite imagery to locate swimming pools in the yards of Greek houses (a sign, apparently, of affluence), Greek citizens invested in fake grass and asphalt nets to disguise their pools from space. Tax evasion is estimated to cost the country 20 billion Euros per year, while a whopping 30% percent of the Greece’s GDP is believed to be on their black (unofficial and untaxed) economy. Obviously, losing that much tax income is going to cause some severe problems for the national economy.

The Greek attitude towards paying (or more precisely not paying) taxes has left Greece’s last surviving military dictator Brigadier Stylianos Pattakos feeling somewhat vindicated for his anti-democratic rule. “In our time there was no debt. Not one drachma went astray. The Greeks are not disciplined like the Germans or the British. They need authority,” Pattakos was quoted as saying in the Guardian.
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