For sweet dreams, evasion and avoidance

I wrote an article earlier this week criticizing Christine Lagarde’s comments about Greece. My main objections were that she helped perpetuate the stereotype of all Greeks evading taxes, overlooked the International Monetary Fund’s role in the buildup to the Greek crisis and the way it was handled since 2009, and her belittling of the difficulties that some Greeks are facing due to the deteriorating situation in their country.

I have received a number of interesting responses, the vast majority of which have focused on the issue of tax evasion. Even the most blinkered nationalist or dogmatic ideologue could not fail to see that tax evasion has played a part in the Greek crisis. It undermined public finances and fed the anomie that pervaded much of public life over the past few decades.

However, I have noticed that some people consistently reject all attempts to place tax evasion within any context. It is difficult for them to accept that there are other, perhaps more important, factors — such as an uncompetitive and unproductive economy, an inability to export, a reliance on imports, a flawed euro entry and the selfishness and incompetence of the country’s political class and many of its people — which have led to Greece’s downfall.

A taxing issue for Greece

Greece’s tax collectors were told over the weekend that they would have to do a much better job this year at gathering overdue taxes. How much better? Almost 200 percent.

According to Skai TV, some 700 million euros was collected in 2011 by chasing down taxpayers that had run up debts. This year, inspectors will have to collect 2 billion euros as Greece tries to meet even tougher fiscal targets amid a deepening recession.

Preliminary figures showed that tax revenues were already 1 billion euros short of the government’s target in January alone, with VAT receipts showing a considerable drop. As consumption decreases, so do revenues, which makes it even more vital that any existing debts are settled.

Umbrella union: 10 myths about Greece and the crisis

Animated illustration by Manos Symeonakis

There is a wonderful short documentary doing the rounds on the Internet at the moment courtesy of The New York Times. Directed by Errol Morris, the film focuses on the presence of the so-called “Umbrella Man” at the assassination of US President John F. Kennedy. With the help of private detective and former philosophy professor Josiah Thompson, Morris paints the picture of the apparently sinister presence of a man holding a black umbrella on a sunny day in Dallas exactly at the point where Kennedy was shot.

However, Thompson goes on to point out that the Umbrella Man eventually came forward and explained that he was holding the umbrella as a protest against the appeasement policy of JFK’s father, Joseph P. Kennedy, when he was US ambassador to Britain before the Second World War. The umbrella was a visual reference to the British prime minister at the time, Neville Chamberlain, who also carried one.

Dodging taxes or dodging the issue?

You know it’s August when journalists work themselves into a lather over a tax-dodging astrologist, as they did earlier this month. Granted, this particular Greek stargazer had allegedly hoarded some 4 million euros away from the prying eyes of tax inspectors. But the real news was that he managed to earn so much offering such a bad service. After all, if he were any good at predicting the future, he would have seen the taxman coming.

The snaring of an astrologer is usually about as titillating as tax-related matters can get, but it’s been an action-packed few weeks for members of the financial crimes squad (SDOE) and the newly formed Financial Police. They nabbed academics at the University of Ioannina who allegedly denied state coffers 700,000 euros, they caught 31 tourism-related businesses hiding their profits and the new hotline for citizens to register suspicions of tax evasion has reportedly been doing roaring business.

Memorandum II: The sequel – Dude, where’s my state?

Illustration by Manos Symeonakis

As Greece draws breath after voting for a new package of austerity measures likely to pave the way for another loan agreement with the European Union and the International Monetary Fund, this might be an opportune moment to identify one of the key faults with the first memorandum signed last year. Because, like a Hollywood sequel which follows a dire original, Memorandum II is likely to make us want to look away in horror.

There is plenty in the medium-term fiscal plan, or MTFP as it’s known in sequel speak, about reducing public spending. Greece plans to save more than 14 billion euros by 2015. This means, among other things, that the public sector wage bill will be cut by 770 million euros this year, 600 millon in 2012, 448 million in 2013, 300 million in 2014 and 71 million in 2015.