Greeks Balk at Paying Steep New Property Tax

[alp227]

Source: NYT

As the first due dates approach on the Greek government’s novel idea of linking electricity to tax payments, a growing resentment is settling over many parts of this country — one that some local officials believe could even shake its political stability.

Already there are pockets of resistance popping up in dozens of areas, including this northern suburb of Athens, where Mayor Iraklis Gotsis has promised to fight the tax bills in court. He has also organized a group of electricians willing to reconnect — illegally — anyone who is cut off. “This thing on top of all the other taxes and salary cuts has made people snap,” Mr. Gotsis said recently. “It is the drop that made the glass full.”

Many Greeks consider the new tax, which makes no exceptions for the unemployed or the elderly and is much higher than any real estate tax they have paid before, to be one more sign of the tough austerity measures they are suffering under as a requirement for European aid. European finance ministers will meet Tuesday to decide whether to release the next $10.6 billion allotment to the Greek government.

In the past, most Greeks paid real estate taxes when they bought, sold or inherited property. They also paid comparatively small yearly taxes to municipalities.

Read more: http://www.nytimes.com/2011/11/28/world/europe/greeks-balk-at-paying-new-property-tax.html?pagewanted=all

[Vincardog]

1. The Greeks are balking at bending over for the banksters?

[dipsydoodle]

2. Not really

they're whining because someone figured out a few ways to compensate for the income tax they avoid paying.

[girl gone mad]

7. I would avoid the taxes, too..

if I knew over 1/3 of the payments were going to bailout foreign speculators.

[dipsydoodle]

8. Its a national pastime there

goes back way into the mists of time. They seem to have overdone a bit of late though. The problem they'll have is that if Greece does leave the Euro and revert to the Drachma they'll be paid the same but in a currency which is worth less. Greece will also become almost loan proof. Its called shooting yourself in the foot.

[girl gone mad]

12. The Maastricht treaty was a loaded gun..

pointed straight at the heads of the Greek citizens.

Talk of tax avoidance is pure distraction from the actual, very serious structural problems underlying the EMU.

[Yo_Mama]

17. Not fair

In many cases, this amounts to shifting the tax burden from the tax dodgers to the old and poor, who will be forced to sell their homes. Of course in the US most people pay reasonably hefty prop taxes, and the truth is that many do lose their homes because of it. But the loss inflicted on many will really hurt - remember, this is a country with unemployment up around 18%, and in which pensions have already been cut. Hard times.

In Greece, the tax paid on homes has been low. In Italy I believe there is a tax exemption for your first home.

This tax has taken down one government and will take down the current one in Greece.

[LuckyLib]

3. Greeks balk at paying any taxes whatsoever, period. None. Zero. Zilch.

The entire country is off the books, unless you are employed by the government where they actually can track what you make. Average "reported" doctor's salary in Greece $23,000 per year. That gravy train is coming to an end. No doubt the banks are part of the problem, as in the US, but attending to the "common wealth" is something some countries/folks are loathe to do.

[DCBob]

6. +1

[girl gone mad]

10. So many things wrong with this post, I don't know where to even start.

Greece has a long history of poor tax collection, stretching back decades at least. This isn't a new issue. Nothing as changed with respect to collections in the recent past.

Germany and Great Britain also have significant problems with tax avoidance and tax evasion. Americans are no slouch in this department, for that matter. But, of course, it's the 1% and corporations doing most of the avoidance in these countries so I guess we're not supposed to notice. Oh those terrible, horrible, no good, lazy Greek workers! If only they would pay their swimming pool taxes then none of this would be happening!11

Sorry, but no. Tax avoidance is hardly the cause of Greece's current financial woes. Increased tax collection will hardly be the solution to Greece's current financial woes. In fact, increased tax collection will only remove more money from the Greek private sector, throwing the Greek economy even further into peril. Ah, but not a single bondholder will get a haircut this year... and isn't that all that matters? Woot technocracy! Rah, rah, neoliberalism! Victory at last!1

Except that it all falls apart once you take a few minutes to think it through.

[Kaleko]

14. Well put.

And then there is the part where Goldman Sachs minions were advising the Greek government for years on how to cook its books so as to hide massive shortfalls in revenues. That part of the story didn't get much play in the US either from what I've seen.

[DCBob]

15. read this..

The Greek government is losing out on €60bn of revenue because of unpaid taxes, with €30bn of it tied up in hundreds of thousands of court appeals, a report has found.

The money dwarfs the €54bn in tax revenue actually collected last year in Greece, and the amount involved could cover the government's deficits for the next three years.

The report, compiled by a special EU task force sent to dig the country out of an administrative morass, said some of the 165,000 court cases had lasted as long as 12 years.

http://www.independent.ie/national-news/greece-losing-euro60bn-a-year-in-unpaid-tax-report-reveals-2939070.html

[girl gone mad]

18. This amount is from court cases going back over a decade.

I've repeatedly pointed out that Greece has a history of avoidance and low collections. This, however, is not why their economy is in trouble now. Extracting more money from the Greeks via increased taxes will not improve the economic outlook for Greece since most of the money will end up in foreign hands. This means less money for saving, investment and spending in the local economy. Greece cannot compete globally to win back this money through exports since they are locked into a punishing exchange rate. Nor can Greece run an account deficit as needed to counteract the effects of the global financial collapse because Greek politicians signed away currency sovereignty.

[McCamy Taylor]

4. Sounds like some foreign investors want to snatch up Greek property for a song.

[dipsydoodle]

5. What?

How do you reach that conclusion?

[Harmony Blue]

9. Because that is the truth

Tax evasion is higher in the U.S compared to Greece., the U.S. employs more workers in the government than Greece (U.S. government is one of the largest employers in the world), and both the American and Greek workers work long hours compared to other European nations. A Greek worker has less vacation time compared to a German as an example.

Don't buy the right wing spin that it is the "Greek people's" fault.

Goldman Sachs conspired with the Greek government to hide their books, so they can spend money on useless military hardware from Germany, United States, a.k.a. MIC.

[elehhhhna]

11. FACT: the wealthy and/or high-income folks in Greece can and do avoid paying taxes. hmmm...

where've we heard that before...?

[Harmony Blue]

13. The reason why the IRS has so many people employed

isn't because everyone crosses their t's and dots their i's.....

[DeSwiss]

16. Exactly. n/t