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Europe

Greek FinMin unveils tax reform, wage policy

2010-02-17

Excerpts
TAXATION

"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash.

They forgot robots.

Transactions will have to be done through debit or credit cards."

The nicer holiday rentals, yachts, and jewelry sales will now be recorded and taxed. Official copies of antique clay jars and diaphanous cotton scarves will still be cash'n'carry for the tourist trade.

"With the tax scale, there is a shift of the burden from low and middle income to high incomes.

"There's tax relief for incomes up to 40,000 (euros)"

Brilliant -- let's reduce the tax base in order to balance the budget! It's never worked before, but we're Greek, so it will! Yay for us!!

"Taxable income based on the new scales will include capital gains from the short-term trading of stocks."

REFORMS

"The income policy frame and the tax reform are part of the government's wider effort to clean up fiscal finances ... and open new roads for growth. We all know the difficult situation the country is in, we all know the government has submitted to the European Commission a stability and growth plan.

"We all know that the public sector wage policy is full of injustices ... which have been formed by adding up various allowances without a central direction.

"Everyone needs to contribute clearly to the big effort to save our economy. It is necessary to contain the cost of wages and (have) a just distribution of the burden between workers."

But not the non-workers: the pensioners, the moneyed rich clipping their coupons. They need not be troubled by our current troubles.

TAXATION

"Every autonomous taxation ... for special professions, like engineers, architects, taxis, gas station owners and kiosks is abolished"

That makes sense. The economy will save a fortune in paperwork alone.

BANK DEPOSITS

"Deposits in banks outside Greece are exempted from audits of their origin if they are repatriated within six months of the passing of the tax bill and are taxed with a 5 percent rate"

Another idea that's never worked before. Europe isn't all that big, and one can always start one's holiday travels in the country where one's spare funds are banked.

PUBLIC PENSIONS

"Public sector pensions will increase by 1.5 percent, except those above 2,000 euros a month"

I thought we were cutting pensions, guys, or at least raising the retirement age to match those countries which we hope will pay for our previous extravagances. This strikes me as a deal-breaker.

PUBLIC SECTOR WAGE CUTS

"We need to contain the public wage bill and fairly share out the burden".

"The wage cuts will begin from 18 euros a month, reaching 345 euros a month for court officials. In percentages, it will be between 1 and 5.5 percent"

OMG! We'll all starve in the streets!!!!! The lower bound might be as much as $30/month -- we'll be reduced to going to McDonalds before the movie on one of our date nights. Another deal-breaker, guys.

"The impact on low-income earners will be mitigated by lower taxes on middle and low incomes"

If it's mitigated, how does that help the budget imbalance?

"The public sector wage income bill increased by 88 percent since 2001, far above the GDP increase"

Eighty-eight percent up, average three percent down -- that'll placate the Germans.

REFORMS

"Income policy and the tax changes are in the framework of cleaning up public finances.

SPENDING CUTS

"There will be no wage increase for the prime minister and ministers and their allowances will be cut by 10 percent."

"Wages of board members in unlisted state companies will fall by 50 percent"

"The budget bill for allowances and compensations will be cut by 10 percent"

I seem to remember the demand was for a 13% cut in budgetted spending, although it's quite possible I misremember the number. The listed proposal, partial though that list is, does not seem to my untutored eye likely to come anywhere near that demand.

Posted by:tipper

#3 comments); ?>werwer

Posted by: Nimble Spemble 2010-02-17 21:16

#2 comments); ?>werwer

Posted by: Frank G 2010-02-17 20:06

#1 comments); ?>werwer

Posted by: trailing wife 2010-02-17 19:50

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