>> Tax evasion has been labelled a "Greek national sport" and it was estimated in 2016 to cost the country's coffers up to €16 billion every year, largely through fraud on VAT or income tax.

Although I've made this joke myself in the past, about tax evasion being our national sport, it's insulting to see it repeated by an Australian publisher. Personally, I've only had to pay taxes abroad, in the UK, where there was no opportunity to evade them (because they were directly deducted from my salary - I'm a PhD student now hence the past tense). I wouldn't really say I'm an expert tax evader.

That said, any discussion of taxation and tax avoidance in Greece as well as the rest of South-Eastern Europe must also take into account the sorry state of public services, which tax money is meant to support. It's a chicken-and-egg problem, but it's easy to see why nobody would want to be the malakas who pays their taxes properly only for their tax money to disappear down the black hole of corruption before having any chance to improve the national health service, education, our roads, etc etc. Taxation makes sense when it's spent to improve and maintain the commons - not to line politicians' pockets.

Of course, that's not absolving my fellow Greeks of responsibility. Corruption is high in Greece because we support corrupt politicians with our votes, and because we have done so for three generations since the "metapolitefsis", the change to democracy after the years of the military dictatorship (ended in 1974). To wit, Kyriakos Mitsotakis (the current prime minister, pictured in the article) is the second Mitsotakis to be prime minister, grandson of the first - and his mom is also an MP. And before him we had Papandreou I (in the '50s), II and III and also Karamanlis I and II to rule us (and all their friends and cousins as MPs). We keep voting the same "houses" in power and then complain that they suck us dry and destroy the economy. And then of course it's every man and woman for themselves.

It's a fucked up situation and we are very much guilty for our choices over the years. But silly jokes about national sports don't help to get to the heart of the issue, or convey its seriousness.

Maybe you can verify this story that I was told. On a few vacations to Greece I wondered why so many buildings of all shapes and sizes had some re-bar sticking out somewhere, usually at the top of a post. I was told that it is about evading property taxes by never completely finishing construction, that taxes were not due on unfinished buildings. So they were never finished. The buildings were all occupied and fully livable but I guess the owner could point to the re-bar sticking out and say it was not really finished.

This is exactly what I heard about Bolivia, more specifically La Paz. The city looks like 80% of the buildings were started 1 year ago and waiting for another storey to be completed, and put paint on it. But no, you see these unfinished buildings, with just raw concrete and bricks, and people happily living there.

It might have caught law makers by surprise initially (not really buying that), but its so damning visible even to outsiders, it just highlights the rampant corruption and lack of actual care from politicians there.

I heard this when I was in Egypt too. Seems to be a common problem.

Not Greek, but here's an economics Stackexchange question which handles this:

https://skeptics.stackexchange.com/questions/27662/do-greeks...

tl;dr of the accepted answer: It's not for tax evasion, it's to make later expansion cheaper. They don't count as "Unfinished buildings". If the house has power (empty or not), or someone lives inside (with or without electrical power), the owner must pay the full 100% of the normal property taxes.

Can confirm -- people (used to) build apartments with extensions in mind, so you would get a permit and plans for a 3-story building, then only build the first two floors. The third floor would then be built 10 years later for children/grandchildren. Greek private citizens are still very allergic to getting huge loans, land ownership is still very fragmented, and tall tower blocks are virtually impossible due to earthquake activity and permit limitations.

the permit to build might allow you a building with three floors at given/approved surface. You dont have to build 3 floors now, you can build 2 or 1 and later you can build up to the allowed limit.

Doubt it. Construction is different in Greece, it's all concrete and bricks. You need the iron to as an extra floor so most buildings have iron sticking out so its possible to add it. It usually gets covered with ceramic roof tiles

Sorry, I can't verify this. I don't know it to be either true or false.

Not saying it's right but Canada had Trudeau I and II, the US had Bush I and II, and the Clinton and Kennedy families, so it's not like political dynasties aren't common in many countries.

I don't disagree but I also wouldn't say that I have a very high opinion of the US political system. I didn't know about Trudeau in Canada, and I confess I don't know much about Canada, either.

I certainly haven't noticed the same kind of political dynasty in other EU countries. Not that there are no pathologies in their political systems.

The thing is, in Greece, we could perhaps say that it's OK to be ruled by the sons and grandsons of previous PMs if things were going alright despite that. They are not though. And it's an easy correlation to assume between nepotism and corruption in politics.

What's more interesting is how many scandals those dynasties have been involved in and still remain in power.

Singapore had Lee Kuan Yew & his son Lee Hsen Loong - and it has a squeaky clean model of governance.

I cannot tell whether this is sarcasm or not.

Singapore's governance is well-oiled, but I wouldn't call it squeaky clean...

Transparency Intl. ranks Singapore the 3rd least corrupt country [1] globally. BTW, this thread was about a possible link between political dynasties and corruption, and I was providing a counterexample.

[1] https://www.straitstimes.com/politics/singapore-rises-to-thi...

Yeah if dystopian bubble is your dream of governance then yes. They fared financially better than neighbors, but its a far cry of society I would like to live or raise kids in. Many things we consider progressive in the west are not upheld there, and people are definitely not equal in front of law.

But as colleagues who worked there described it, you are on top of the pyramid as a well-hired westerner. So you don't have to give a fuck about tons of things that make decent human being, as long as you don't cross often draconian local laws and align. It takes a bit of specific personality to thrive there, but many do...

I'm from Hungary, and like in some other countries, the change in politicians is coming on the city levels. While Orban is trying to be a dictator, Budapest now has an amazing mayor (Karácsony Gergely), fighting back against corruption with effective negotiation tactics.

Budapest gets only a few percent of the taxes that people in Budapest pay, but even that will be enough to reverse some of the damage done in the last 9 years.

>take into account the sorry state of public services, which tax money is meant to support. It's a chicken-and-egg problem,

I would argue it's not a chicken/egg problem, the money has to come before the public services. The government isn't going to borrow a ton of money to improve services on the off chance that it's citizens will voluntarily start to pay taxes at a proper rate.

Interestingly enough, they probably could. Their most recent bond yields were negative, very different from days not so long ago when their yields would be above 20%. However, I'm not sure if they have agreements with the ECB that might prevent them from issuing more debt.

You act like you are the only country with inefficient and corrupt government bureaucracy and services. Huge amounts of people in every country believe the same thing. You pay your taxes and advocate for tax cuts and government reform to prevent further waste. But an entire country whose logic is to just stop paying taxes as political protest is pretty funny!

On the contrary, the joke very clearly expresses to the rest of the world that Greece has some truly ridiculous tax problems. It's like saying Russia is an oligarchy; of course the Russians would be offended by it, but it illustrates the reality succinctly.

It sounds like a vicious cycle.

I don't pay taxes because services suck... so there isn't enough money for services.

In effect it's an oligarchy posing as a democracy. When Rome devolved from a republic into an empire, it retained the veneer of democracy for over 250 years. Yet in no meaningful way was it one. The principate.

A long time ago all of those Greek families should have been destroyed for having pillaged their own country. They don't care about the country. They care about their family. Fine. Let them care for their families without a country, and the country would be better off without them. And by far it's not the only country that has done this, is doing this, or will do it again. It's actually quite ordinary.

Romanticizing feudalism, and classism: everyone has their proper place, and responsibilities and privilege. Family name and bloodlines are a real thing, and some people are better than others. It's an indisputable fact. And better people have more money, to buy more and better things including better personal security, education, health care, clean water, justice. Those things aren't rights everyone gets. Equality is an obscenity. It is a wealthy person's right to afford better lawyers with which to buy justice as a product. And for royalty to have no need for lawyers at all because they are the law. They're closer to god after all. And who dares challenge god's will? Besides, it makes it easier to keep a boot on everyone else's forehead when they can't afford a lawyer. Justice is a product. And security and violence are a product too, which is the purchase of private police and mercenary forces, and even goon squads to intimidate anyone who disagrees with the proper way of things.

The mandate from heaven, the concept that kings and queens were the manifestation of god, or at the least had an imputation of godliness to them, is foundational for feudalism and monarchies. Of course countries will have oligarchies when just enough people haven't rejected these old organizational ideas, and let a few people step on everyone else.

So it's actually not so fucked up. It's part of the natural inclination of mankind for a very very long time to worship a god, and by extension any man who convincingly speaks on behalf of that god, and his immediate family, and then his friends, as he corruptly lowers the ladder of power to a select few. Democracy is trouble because it relies on all too many people giving a crap about their own aspiration, having imagination and ambition, and trust that the rules apply to everyone. Which they tend not to. Damaging trust in equal application of law, and competent institutions creates an environment in which corruption and oligarchies flourish.

The U.S. isn't immune. There's a significant minority who believe in prosperity theology, pushed by pastors as ostensibly Christian even though it's directly contradicted by the book of Job. The idea is the closer to god you are, the more you'll be rewarded with wealth. And thus wealth indicates a person has been rewarded and thus is closer to god so you should mimic their behaviors - hero worship. And it's also idolatry but you wouldn't ever hear that suggested as a bad thing, of course you should worship your pastor and make a proper donation, then god will reward you five fold (or whatever). A more common variation on this is celebrity worship.

Of course they should have all this money to pay accountants and tax lawyers who can help them pay lower tax rates. Because paying fair taxes is not actually fair. What's the point of being wealthy if you can't buy a lower tax rate as a product? Higher rates are for the peons who can't afford an accountant! Put the money into the coffer, and god will reward you with more. You'll see.

It's the same. It's all the same.

The argument that corruption is very high on Greece and hence people prefer to not pay taxes makes intuitively sense but it's probably also (at least partly) confirmation bias. Note that per https://www.u4.no/publications/exploring-the-relationships-b... there is currently no literature concretely correlating the two. The link suggests more research to be done in this area.

Per https://www.transparency.org/cpi2018 Greece is ranked 67 out of 180 countries in the corruption index with the admittedly not high score of 45/100. 100 is not the top at the score, Denmark is at first place with 88/100. So, relatively speaking, corruption exists all over the place, and Greece ranks mildly ok compared to the world. It also ranks better than all of it's neighbouring countries. Compared to the US or the EU, there's a lot of room for improvement of course.

So there's probably more facets to the problem that just corruption.

The article btw is really really shady. Barely at the beginning of it:

"The scheme is a radical attempt to cast some light on Greece's huge shadow economy, the world's largest"

and let's look at https://www.theglobaleconomy.com/rankings/shadow_economy/

wow.. wait, Greece is barely at place #86 out of 158 countries. Hmmm someone did not do his due diligence here.

Then we have the following.

"Greece also has one of the lowest internet usage rates in the EU at 72 per cent". Per https://www.internetworldstats.com/stats.htm it's definitely not great. Trailing by at 45/54. We can remove Vatican City, San Marino, Isle of Man, Svalbard and Jersey (all have lower rates) and say that's true. But it's written way more sensationalist than it is. The mean is at 87.7% so there is definitely room for improvement.

At least the suggested result is pointed out like that, i.e. "This suggests that some in the country could struggle to meet the 30 per cent target". Not sure why, but anyway.

And then we have a repetition of the argument above

"Southern Europe, particularly Greece, have booming shadow economies. A study by the Institute for Applied Economic Research in 2017 found that Greece had the largest in the world, being equivalent to 22 per cent of gross domestic product."

Wait, which country's Institude for Applied Economic Research? It's not at all mentioned. Googling it, it turns out it's Germany and the actual research is at http://www.iaw.edu/index.php/aktuelles-detail/734. The actual number of countries studied? 20. Not sure what the criteria for their selection were. Out of a planet with 195 countries that's barely enough to justify the above (and the original research does not make such sensationalist claims) never mind the fact that countries like e.g. Thailand have double that rate.

Overall, kind of meh.

The parliamentary financial evaluation committee has already declared it as unconstitutional.

For those that still manage to save some of their income – a luxury for very few nowadays – the plans to tackle this were already though out. For example, a large purchase of a high end tv at the last day of the year, which then would be returned a couple days unopened. The ministry would be “happy” and your savings would not really have exchanged hands permanently.

It mostly illustrates the inability of the government to be effective.

But was the goal to actually force people to spend money? Not just force it to be tracked electronically?

I hope it's a joke, or something is missing there. I try to save as much as possible and I barely spend 25% of my income. Forcing me to spend more is not right.

Maybe they were rather thinking about: move your money electronically, which would also include getting salary on a bank account, or wiring it there.

If I understand it, the point is to avoid cash transactions that cannot be taxed. One article I read pointed out that the 30% would include rent or mortgage payments, utility bills, and such things.

Personally, I would find it easy to hit almost 100% of the transactions I make electronically - I use cash rarely now (living in France, no cash tips etc.).

I think I would struggle to only spend 25% of my income, though. Even if I am saving a lot, once I pay rent, family groceries, utilities, phone and internet, I’d be past that. If you don’t mind to share, how do you manage to spend so little of your income? There’s always room for me to save more, and I’d love a couple of tips.

There is a global 'war on cash' by the finance lobby because they can easily insert fees on every electronic transaction, while at the same time hyper-virtualise their operations.

Lose all those branch offices and ATM's that need to be maintained and supplied. Just have a computer, a banking app and some AI bots and you can do it all with near zero cost and rentseek the hell on every single transaction for the 99%.

Tell the public sector it is all in the name of combating 'tax-evasion', you know, the evasions you make possible by lobbying for very convoluted taxation regimes with many always changing backdoors you are advising your 1% clientele on.

Compared to traditional banking real-estate, employees, physical operations and security ... yes.

"Near-zero“, really?

I'm guessing single person willing to live frugally, working in high paid tech job. That, or using different definitions and not literally saving 75% of take-home pay.

The article explicitly includes rent: "Greeks can use debit cards, credit cards, bank transfers and ecommerce for the electronic transactions, which includes rent."

The article says that payments for rent do count towards the limit. Can you re-confirm?

I can. Rent does not count towards spending but it counts towards... earning.

So, if you own a house and rent it to others, the rent is part of your income. If you rent a house to leave in, the rent is not part of your spent amount.

There is a special clause, that if you spent more than 60% towards tax, rent and loan payments, then you only have to spent 20% of your income on services, goods, etc.

It's trivial. You just need to earn 4 times your minimum spend and then do it. ;)

He is probably well paid. I agree it’s hard to keep the expenses below 25% of income.

The way I see it is that the government wants Greek nationals to use electronic payments for at least 30% of their expenses, to aid tracking.

This does NOT mean the government wants Greek nationals to spend at least 30% of their income.

This is exactly what it wants. 30% before any tax, without counting rent, etc must be spent or you face 22% tax on the unspent amount. :)

> The way I see it is that the government wants Greek nationals to use electronic payments for at least 30% of their expenses

That does not compute. How does one prove that 30% of their expenses were done using electronic payments? Submitting paper receipts for the other 70%? It's been tried and it's unfeasible.

I do believe that if you put the rest of your income in a saving account, or investment it is counted as spending it.

Become it is not income anymore but an asset.

Then you must be pretty rich. A lot of Americans spend 25% of their income on housing alone.

If you live in eastern/southern Europe, it's very easy (and pretty normal) as a software engineer. I spend less than 20% of my salary, because the cost of living here in Prague is appropriate for people making $17k yearly (before tax), while I am making a typical SW engineer wage you'd find in an average town in the USA or western EU (~$90k yearly before tax).

You must be bringing something unique and very senior to the table, or company is overpaying you maybe 2x of what it would take to get a great local SW engineer. I know there is long term shortage of senior folks there, but it shouldn't be that desperate.

Plus you mention before tax, so unless you are contracting (which is probable but no real clue), you are left with much less after taxation, being in very high tax bracket. So the numbers posted don't work anymore, unless you live very frugally in crappy tiny apartment/room (or riding family wealth).

I worked there 10 years ago, so maybe things changed dramatically. Its true they still keep pestering me in linkedin, so maybe it did change so much. Anyway, Prague is great place to visit, but I found it rather bleak for long term living and raising family, especially when compared with other places located more west. There is only so much you can buy with money within given society.

There are no tax brackets in Czechia. Tax is flat 17% + social and health insurance. That wage is now completely ordinary for average senior developer.

Things in Prague indeed did change dramatically in the past 10 years, especially during the last 5, the Prague IT market grew several tens of percent a year during that time. Right now Czechia has the lowest unemployment rate in Europe, and looking for a good developer indeed is very desperate (I am responsible for hiring from my position - which I hate to do, because it's nearly impossible).

Culturally, I think you should try Prague for a month or two again. The city did change a lot, including a large influx of new people (several hundreds of thousands in the past 10 years have immigrated into Prague).

I remember Prague of 10 years ago (I was born in a smaller city in Czechia) and it was a place I did not like. Today's Prague is awesome.

Do you work for a local or remote company, if you don't mind me asking?

Local foreign-invested startup at the moment

Thanks, that's amazing, and depressing (for me).

> Then you must be pretty rich.

Not at all!

If you own a house or rent a tiny apartment and live frugally you can do that with a middle-class income.

If you prepay all your expenses you can live on $0 a month... That's not a very useful argument.

Owning a house probably makes you pretty rich in the eyes of many people.

if you own a house you are rich.

You don’t own the house until you’ve paid off your mortgage. If you’re doing that under 50, you’re probably pretty decently well off. And also if it’s actually you who owns the house and not your sibling or parents who you’re living with.

70% of Americans own their own home. Are 70% of Americans rich?

I would expect 70% might have a mortgage but owning - as in not having to pay the mortgage because you own the home entirely - would be well under 70%.

No, 70% live in a non-rented home (an adult son living in their parent's home is also counted, for example). Also, only 34% are fully paid off.

If you’re under 35 and own your home outright you’re either rich or your parents are.

Excuse me, what? If they know what 100% of my income is, they can tax it.

Payments under the table stay there; that money is not part of your percentage. People receive payments and make payments without that money ever appearing on any bank accounts.

This is unenforceable and doesn’t solve anything.

The point is the second order effects. You a may pay taxes, but the shops you spend your taxed income might be lieing on their taxes. Any electronic spending you made will not give the shops room to under report. In turn that shops electronic money forces the shops to force their employees to take taxed money, otherwise the shops could not claim the wages against the income.

This comment here was what struck me immediately upon reading the story. Surely the Greek state has thought of that? Surely?

You have no idea how stupid they are

I am afraid that - while this is extreme - this is pretty much a taste of things to come for many industrialized countries.

Cash is well on its way to being outlawed in many places, thereby giving states historically unparalleled control over their flock.

Complete and detailed financial transactions are pretty much the least noisy dataset you can imagine to build a person's detailed profile.

I feel like this will only lead to more people not declaring their income.

Ironically, the move is supposed to deter people from doing that. The article doesn't go into details about how it will be achieved. It'd be nice to see how the Greek public reacts.

Spot on. A lot of people have unregistered jobs. This kind of laws encourage a hard split between clear and shadow economy.

That can also be incentivized to go electronic.

That's pretty messed up. What about the elderly and the poor?

My grandmother (American) has never done one thing online in her life.

Credit cards counts as well. Probably cards in general.

Hell paper checks would probably count.

It's not just for online transactions - it says "debit cards, credit cards, bank transfers and ecommerce".

Syriza was right and Varoufakis should have called the ECB’s bluff but instead the ECB knew Greece was just pretending to call the bluff and just let them hang.

They’d have been better off if they had executed Grexit than be saddled paying off German banks.

>They’d have been better off if they had executed Grexit than be saddled paying off German banks.

Yeah, the scheme works like this:

- Greek state was bankrupt

- German banks and financial interests were over-exposed

- Germany used EU and EU funds to "aid Greece". The funds are not used in Greece in any way, but to repaid the debt, so its basically EU -> Greece -> German banks. Germany benefits tremendously, Greece is merely kept on life support (still bankrupt, still with the same -and bigger debt as before the "aid", just with a credit line that goes straight to debtors, e.g. mostly exposed German banks), and Greek state is forced to sell assets for 1/10th the price for select German and other players (with political and economic pressure as to which those would be).

- IMF piles on, pushing its own agenda (deregulation and other neoliberal/anti-welfare etc policies)

So it's basically a swindle on the EU populations, to make them pay for German banks using Greece as an intermediary + a way to not let Greece default, but have it suffer a fate worse than default (mostly, selling everything to the lowest bidder and still being in the same piled-on debt).

Well, that would be German elites. German people still paid like other Europeans for this scheme -- though the transaction also benefitted Germany economically, so somethings trickled.

Well, not exactly. Debts of government were written-off about 50% https://en.m.wikipedia.org/wiki/Greek_government-debt_crisis

As far as I know that means that creditors from northern Europe paid 50% of debts. This is organized default and a deal package that came with it. I wouldn't say German banks were exactly winners here.

It's the same story in many countries ... populist governments increase public deficit via corruption and salary increases in the public sectors in order to secure votes for the next election, then get loans to pay said debt and then everybody blames the evil banks, FMI, EU, they blame anybody else but themselves for supporting corruption and populism.

>Debts of government were written-off about 50%

That's a huge bargain for the banks compared to bankruptcy and its impact.

And the Greek government (much less the people) still doesn't see that 50% write-off, since instead of defaulting and making a clean start with it, it's forced to take new lifeline loans, sell off assets at special ultra-low prices, and still repay everything. The current debt after a decade of "aid" is larger than the initial value - meanwhile their GPD has took an impact similar to that of war.

For a private company or citizen, it would be the equivalent of not having the option to go bankrupt, but instead be sold to slavery.

get 50%, or lose 100%? which one you would prefer?

What you write is nationalist bull on many levels.

1. German banks were exposed, yes, but they were not much more exposed than banks in other EU countries. Look at the table in [0]; total absolute exposure of German banks is second after French banks. If you normalize this to the size of the respective economies, many other countries' banks were more exposed, including Belgium, The Netherlands, Cyprus.

2. The whole thing was an action of the EU and IMF, not of Germany specifically, and the table in [0] should sufficiently explain why, even if you take the most cynical possible view.

3. The whole concept of a "German bank" is a bit ridiculous in a globalized economy.

4. The idea that Germany can just go ahead and "use EU funds" is nonsensical. That's the EU's money, and Germany is a part of the EU.

[0] https://www.theguardian.com/news/datablog/2011/jun/17/greece...

you are mostly right, there is a great book on this theme called "Crashed"

"https://www.amazon.com/Crashed-Decade-Financial-Crises-Chang...

i't was the same story in most of the east europe. west banks where overexposed in the east europe, they pumped the "rising" markets in the east, and once the money stooped coming everything stopped. and now the west banks lobbied to give those local branches more modey so that they where not so exposed any more.

I'm sorry but I have to disagree. A Greek exit from the Eurozone would have meant an economic catastrophy incomparable to what we have to endure now. For one thing, we are currently not technically bankrupt. In case of Grexit, we would be well and truly bankrupt.

If I remember correctly, Varoufaki's stratagem was to claim that we would be better off outside the EZ and back to our own currency (the drachma) which we could devalue unlike the Euro.

However, the drachma was valued to €340.750, when we joined the EZ [1]. That would have meant that our debt of ~€355.49 billion [2] we would have to pay 12,113,321,750,000‬ drachmas.

Note that we would supposedly try to pay off this debt by devaluing the drachma, which means, by printing more of it. That in turns mean that we would have to carry out our internal transactions with a devalued drachma. I don't know how to calculate the devaluation that would be needed, but I think the predictions that we would be back to the WWII situation where a loaf of bread cost a trillion drachmas, that many made at the time, were not too wide off the mark.

_____________________

[1] https://www.euro-hellas.gr/isotimia-euro-drahmis.html

[2] https://en.wikipedia.org/wiki/Greek_government-debt_crisis

Converted to Euros based on current exchange rate of 1 Dollar to 0.9 Euro.

Well, the idea was that Greece would default on their loans (not that they’d pay back in Drachmas). If not at least pay back a severely discounted debt like Argentina and others have done.

It’s too bad he kinda chickened out and didn’t call the ECBs bluff. I say kinda because I don’t think he ever intended to execute Grexit as he had threatened, but was rather using it as “leverage” but they saw right through that. Syriza should have made him do it.

Yes, we could default on our loans. Then we would be free to borrow more at an eye-wateringly high rate, given that we would have no trust left with lenders. And we would have to service this debt with a drachma worth less than the paper it would be printed on.

I don't see how anything good could come from turning our country into a financial pariah.

> What about the elderly and the poor?

If it's on income, wouldn't this group always be approaching 100%?

all above 70 are exempted

It is sad to see how hard life is made for the average Greek due to the economic sanctions they were hit with to save malpracticing banks.

Ha. Widespread tax evasion is not the fault of the banks. If there is a country where a huge proportion of people work in the grey and black markets then normal government tax policies don't work.

If governments don't have income then they can't do the things that they need to do. If you've got a country then I think by definition you require taxation, borders, etc.

Tax evasion isn't as widespread as you'd believe. Most people don't work in "grey or black markets" over here.

Business do tax evade, most people can not and do not.

There are ways to check on businesses and fine them appropriately without screwing your citizens. Unfortunately, that's not in the cards.

I might be oversimplifying. Tax evasion becomes necessary when one knows they'd lose more money (than necessary) to taxes, especially when the benefits of the tax has not been or cannot be felt. If that's the situation, taxing becomes an exercise of government just because of nation and economic theories. The way to solve that isn't to surveil earnings and spending. It is to make a good case for why people should pay taxes. And usually, it involves spending the current tax money well.

> "The way to solve that isn't to surveil earnings and spending. It is to make a good case for why people should pay taxes"

What makes you say that? Has that ever worked?

IMO taxpayers should pay their taxes simply because they are citizens and that's the law. If the taxes aren't bearable or just or aren't spent wisely, then they should vote accordingly at the next elections.

Tax evasion does in fact reward the corruption that has led to tax evasion.

And the way to end tax evasion IMO is to (1) decrease taxes, as to make the burden bearable for everybody, but then (2) put tax evaders in jail, show no mercy.

> IMO taxpayers should pay their taxes simply because they are citizens and that's the law. If the taxes aren't bearable or just or aren't spent wisely, then they should vote accordingly at the next elections

Let's assume that this is the reason for tax obligations. What will be the equivalent statement made for the government? Government should collect taxes from citizens because it's the law to collect taxes from citizens?

Tax collection isn't a sport. It's toward national development. If one end happens (tax collection) but the other doesn't (national development), expect rational beings to change attitude towards the first.

Are you seriously saying draconian taxes are acceptable because you can decide not to pay them? This isn't how a democratic government is supposed to work. That's just pure anarchy and probably points to why Greece came into this situation in the first place. Citizens do not face the consequences of the government they elected and therefore they have no incentive to actually vote for politicians that want to solve the problem. Instead everyone is trying to break the rules in every way possible and then once a rare and naive guy gets into government and wants to suggest a real solution your little raft made out of discarded PVC pipes that you have carefully built over the course of your life isn't good enough anymore. Being forced to upgrade to a kayak is going to be painful but it will be worth it in the long run.

> If the taxes aren't bearable or just or aren't spent wisely, then they should vote accordingly at the next elections.

There's a number of assumptions in that sentence that I 'd like to challenge:

a) That people act as rational beings and will at the next elections vote to their best interest. b) That people have the information to gauge whether taxes/resources are spent wisely c) That the main contributing factor to people's voting preferences is taxation or spending of resources d) That there is a lack of disinformation campaigns that will actively try to sabotage both a) and b)

I don't understand this at all. Let's use VAT as an example. The benefit of paying VAT is the ability to make a transaction. If you say the problem is that people do not see the benefit of a VAT because they can also make illegal transactions without paying VAT then the only solution is to enforce bans against illegal transactions so that everyone becomes aware of the benefits of making legal transactions.

> the only solution is to enforce bans against illegal transactions

And that has happened (for a very very long time now). The key problem being "enforce". Enforcing works up to a point and there is always the need for a cooperative public. The moment the public is distrustful of this institution (or any institution for that matter), everything goes down the drain. Look at https://ec.europa.eu/commfrontoffice/publicopinion/index.cfm... for the level of trust in the government greece has.

HA! The fault is, like in other southern European countries, of banks that steal 1% to 4% of EACH transaction, on top of the 0.1-0.5 maximum transaction cost mandated by the EU.

> If governments don't have income then they can't do the things that they need to do. IMHO the problem is SPECIFICALLY that governments do not do things that they need to do, and yet demand money from citizens. Starve the beast.

> Starve the beast.

Because that worked so well ...where?

Most European laws that help the general public, such as free healthcare, a sane amount of maximum work hours and the right to a minimum guaranteed standard of life are the direct result of this approach. Strikes do wonder, and so does refusing to pay; i suggest giving it a try once and see how it goes.

How are strikes an example of "starving the beast"? Are you saying strikes effect change due to the reduction in the tax revenue? I'm very much sceptical on that claim.

As for refusing to pay, where did that work?

That sounds like an ugly hack and I suspect that tax evasion reporter bounties would probably work better but I don't know their system and problems in details beyond "rampant tax evasion and loopholes in an economy that isn't as advanced as it should be".

I had a related thought while having breakfast. A hypothetical transparent economy where everyone had open ledgers of transactions and how utopian or dystopian it would wind up.

Money laundering still be possible in that system - any uncertain value fudged up or down in exchange for illicit hidden transactions would work for that practice.

>That sounds like an ugly hack and I suspect that tax evasion reporter bounties would probably work better

Giving people an monetary incentive to rat on each other for something a large slice of the population engages in (to varying extents) almost always increases distrust and dysfunction in society. You can sometimes get away with it in some places where trust of government is very high and allegiance to local community is very low but Greece is not one of those places. Right now one of Greece's problems is too little trust in government (part of why people feel justified dodging taxes). Incentives like you described would be counterproductive.

Hmm interesting perspective - I would have thought disrupting the "conspiratorial cohesion" as well as turning the greed of enterprises against them. Not what I would have thought.

Seen another way, companies will have to provide electronic payment options. Hopefully there's follow up incentives to make electronic payments appealing. Credit card cash back isn't still a thing in EU (or at least Germany). That said, I don't know which is generally safer, cash or card, but in my own experience I feel more secure traveling/walking around with my bank card that cash. It's 2019 and there's still several places in Germany where you have to pay > 50eur bills in cash.

> Credit card cash back isn't still a thing in EU (or at least Germany)

They will never be a thing in EU, under the current regulations. Cash back work because in the US credit cards charge very high transaction fees. IE: every time you make a payment, a portion of it goes to the credit card company. The The credit card company then gives some of that back to you (hence the name) to push you to use their cards instead of the competitors.

By law, the transaction fees in Europe are really low, so the credit cards company have nothing to give back to you. Credit card is also a far less profitable business in Europe than it is in the US, that is why you see far less ads for credit cards offers.

>> Seen another way, companies will have to provide electronic payment options.

This is already the case in Greece. Even "periptera" (equivalent to drug stores in the US or corner shops in the UK) have to accept card payments and issue receipts, which was unheard of a few years ago. This was explicitly imposed to curb VAT tax evasion I believe. It was a measure insituted by the previous government, of Syriza.

I had a colleague who went on a Greek island cruise and told me a story of a common tax invasion scheme he heard about. I can't say whether this is true or not as he tends to tell "tall tales". He said he noticed a lot of residential properties with tiny churches on them. He said he learned that if Greeks had a church on their property it would be taxed at a much lower rate (or perhaps not at all) and therefore everyone had these tiny one person churches on their properties.

No, that's not true. The reason that was done was because of a regulation that forced the electrical grid to treat church grid connection in an expedited manner. So one would built a house with a tiny church and would file papers for expedited connection to the grid. That was happening in places that were sparsely built and the cost of the grid to reach a house was great.

china found a better solution for this problem.

businesses were required to use government issued software and receipt paper to print receipts. those receipts had a scratch area which would reveal a code that allowed the buyer to win something. that way the public was motivated to ask for that receipt, and because the receipt was printed with government software, the transaction could be reported directly.

Sounds like a case for swapping to land value tax if I've ever seen one. Can't hide land.

You can't hide land, but how do you determine 'value'?

We have some such system for funding local government, and the values are, in general, an absurd fiction (in both directions) despite the legal theory that property values should be based on some notion of 'market value'.

One trouble is that when the property market declines, local governments don't take that into consideration, and refuse to reduce property valuations, because that would impact their revenue stream in the direction they dislike.

If you ask me, if this was to be done, s the following steps should be taken.

1) The government should commission an expert panel to investigate a system for assessing land value (or perhaps even crowd source it). A set of descriptors (size, location, if it's next to a sewer treatment plant, etc.) should be determined. Along with sale price records, a system should be designed to predict land values.

B) Every part of the system should be public information, including the set of descriptors, so that individuals can dispute them and have them updated in the records.

C) Per law, the system should be regularly reviewed and updated, so that it is as accurate as possible.

All of these have happened, in some degree at least. And yet it's still a mess. e.g.

1) That panel exists in a variety of forms. The problem is, how do you nicely estimate land value in an economy were real estate transactions are few (which is happening for the last 10-12 years or so)? In many places it's impossible to estimate due to the above, so the alternative is to rely on very old values which are going to be out of date and don't reflect reality. And you can't put 0 for the land value as that would mean 0 taxes and the state financial situation does not allow that B) That is happening. Dispute is problematic as it takes years for the courts (yes, with the exception of blaring mistakes, the state has no incentive to accept that a land value estimation is wrong, so courts it is) to come up with a decision (never mind the fact that it will be appealed anyway so even more time and money spent on this), but it is happening. C) Again, this is problematic due to the same reason as 1). There aren't really that many real estate transactions to accurately estimate land values. Everything went into a pause for years in a row.

Only allow businesses to offset tax against non cash expenses.

You need something that will ripple through the system and encourage good behaviour.

- Improve mobile network

- Force limits on transaction fees

- Force banks to protect consumers with phishing, fraud and other scams

- Lower taxes, and they will now be collected

> Increase VAT for cash payments

People don't pay VAT on cash-in-hand payments, though do they?

In most EU countries they do, it's included in the final price.

To find out whether the VAT money goes to the state as VAT or gets "forgotten" in the merchant's pockets is left to the student as extracurricular work.

Have you seriously never had anyone offer you a 'discount' for a cash payment? Why do you think they're doing that?

I live in a southern EU country, and that's very rare here, in my experience. The only cases I can think of in the last decade were home repair people. Even car mechanics stopped doing that.

This article is about how evading tax is not very rare in places like Greece.

When under the table payments are the norm obviously no one would give you an incentive.

I would agree with you in a place where everything is cleared in books, like the stereotypical northern Europe.