Greece Is The US, Following Vote To Hike Taxes On The Rich

Tyler Durden's picture

It's been a while since the Syntagma square riotcam was broadcasting live from Athens. After all, despite the ongoing collapse in its economy, where only 3.7 million people have jobs compared to 4.7 million who are unemployed or inactive, the general sentiment was that "austerity" measures have been put on hiatus, and no more tax, pension, or benefits cuts are on the table. That changed last night when Greece was the latest country to become the US, following a tax hike on its highest earners. However, unlike the US, this increase in "rich" taxes is being offset by at least some spending cuts such as tighter control of the budgets of ministries and state utilities, and the reduction of parliamentary employees’ wages in line with cuts to the wages of other civil servants. In other words, it is almost time for the Syntagma square daily pay-per-view daily webcast. The good news, at least for Greece, is that it does not have a debt ceiling to worry about. Then again, when all your debt is zero coupon perpetuals in the hands of the ECB and other "official" institutions, the balance sheet is the last thing you have to worry about. It's the income statement, one where not even all the one-time charges or loan loss reserve releases in the world will do any difference, that suddenly matters far more.

From the NYT:

Greek lawmakers voted late Friday to increase taxes on middle- to high-income earners, self-employed professionals and businesses despite vehement objections by the political opposition and several ruling coalition deputies who said austerity-weary citizens should not be subjected to further pain.


The change to the tax code, one of a long line of pledges Greece has made to international creditors in exchange for continued bailout money, passed comfortably with at least 162 of the ruling coalition’s 163 members backing the articles in a roll call that came after two days of heated debate in the 300-seat Parliament. 


Defending the bill in Parliament, Finance Minister Yannis Stournaras called it “a vital fiscal reform” that would avert additional across-the-board cuts to workers and pensioners.


“Every euro collected in tax revenue is one euro saved from salaries, pensions and social benefits,” he said. He rejected a flurry of amendments from members of two junior parties in the coalition and the opposition, noting that such costly changes would throw Greece off the path to economic health and put further bailout money in jeopardy.


Calling Mr. Stournaras a “political terrorist,” Panagiotis Lafazanis, a lawmaker of the leftist party Syriza, which opposes the terms of Greece’s bailouts, said the tax bill was “the nail in the coffin of social justice,” adding that “Greek society is more important” than its creditors.

Of course, Greece does have one teeny, tiny problem:

Greece’s failure to crack down on widespread tax evasion came into sharp focus over the holidays after prosecutors revealed that the names of three relatives of the former finance minister George Papaconstantinou had been removed from a list of some 2,000 wealthy Greeks with Swiss bank accounts. Parliament is to vote next Thursday on whether Mr. Papaconstantinou, and his successor as finance minister, Evangelos Venizelos, who leads the coalition’s Socialist party, will face a parliamentary inquiry on whether they should be indicted on charges of criminal tampering and breach of duty.

So yes, voting through tax hikes is one thing. Actually collecting the new taxes, when not even the old tax code was being observed by anyone and certainly not the rich, is a different problem. Which means even more tax evasion, even more offshore accounts (only not in Zurich this time, but in Singapore), even more tarps of swimming pools to cover them from satellite photos of "villas of the rich and infamous", even greater deficits, even greater deficits, until the ongoing surge in bad loans once again topples the local banking sector which like a habituated drug addict demands for yet another round of bailouts.

The best news, however, is for Vladimir Putin who is about to see yet another surge in applicants for Russian passports, which as we observed previously have become the new Swiss bank account.

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Snakeeyes's picture

Boy, is the USA ever Greece! Opa! And people voted for the Statist clown that is pushing us farther down the path to Greece.

flacon's picture

Can't Greece cut government spending instead of increasing taxation?  ... or do their politicians have the same disease as the American ones - the world over?

A Nanny Moose's picture

Yes. It is called Acute Craniusrectumitis. Symtomps include pathalogical lying, and compulsive vote buying.

Methinks Boris is going to start getting some new neighbors.

Anusocracy's picture

It would be nice if pathological liars could be easily identified. The most interesting thing in this article is that autism presents an opposite gray matter-white matter pattern.


First evidence of brain abnormalities found in pathological liars

"We looked for things like inconsistencies in their stories about occupation, education, crimes and family background," said Raine, a psychology professor at USC and co-author of the study.

"Pathological liars can't always tell truth from falsehood and contradict themselves in an interview. They are manipulative and they admit they prey on people. They are very brazen in terms of their manner, but very cool when talking about this."

Aside from having histories of conning others or using aliases, the habitual liars also admitted to malingering, or telling falsehoods to obtain sickness benefits, Raine said.

After they were categorized, the researchers used Magnetic Resonance Imaging to explore structural brain differences between the groups. The liars had significantly more "white matter" and slightly less "gray matter" than those they were measured against, Raine said.

Specifically, liars had a 25.7 percent increase in prefrontal white matter compared to the antisocial controls and a 22 percent increase compared to the normal controls. Liars had a 14.2 percent decrease in prefrontal gray matter compared to normal controls.

More white matter – the wiring in the brain – may provide liars with the tools necessary to master the complex art of deceit, Raine said.

"Lying takes a lot of effort," he said.

"It's almost mind reading. You have to be able to understand the mindset of the other person. You also have to suppress your emotions or regulate them because you don't want to appear nervous. There's quite a lot to do there. You've got to suppress the truth.

"Our argument is that the more networking there is in the prefrontal cortex, the more the person has an upper hand in lying. Their verbal skills are higher. They've almost got a natural advantage."

But in normal people, it's the gray matter – or the brain cells connected by the white matter – that helps keep the impulse to lie in check.

Pathological liars have a surplus of white matter, the study found, and a deficit of gray matter. That means they have more tools to lie coupled with fewer moral restraints than normal people, Raine said.

"They've got the equipment to lie, and they don't have the disinhibition that the rest of us have in telling the big whoppers," he said.

"When people make moral decisions, they are relying on the prefrontal cortex. When people ask normal people to make moral decisions, we see activation in the front of the brain," he explained. "If these liars have a 14 percent reduction in gray matter, that means that they are less likely to care about moral issues or are less likely to be able to process moral issues. Having more gray matter would keep a check on these activities."

The researchers stopped short of asserting that these structural differences account for all lying.

"This is one of the components," Raine said.

"The findings need to be replicated and extended to other parts of the brain. What are the other neurobiological processes?

"We haven't had studies like this. It's exciting to us because it's a beginning study, but we need a lot more to flesh out this discovery."

Yang, the study's lead author, said the findings eventually could be used in making clinical diagnoses and may have applications in the criminal justice system and the business world.

"If [the findings] can be replicated and extended, they may have long-term implications in a number of areas," said Yang, a doctoral student in the USC department of psychology's brain and cognitive science program.

"For example, in the legal system they could potentially be used to help police work out which suspects are lying. In terms of clinical practice, they could help clinicians diagnose who is malingering – making up disability for financial gain. "And also in business, they could assist in pre-employment screening, working out which individuals may not be suitable for hiring.

"But, right now, I have to emphasize that there are no direct practical applications," she said.

In their journal article, the authors mention that separate studies of autistic children – who typically have trouble lying – have showed the converse pattern of gray matter/white matter ratios.

"The facts that autistic children have difficulty lying and also show reduced prefrontal white matter constitutes the opposite but complementary pattern of the results compared to adults with increased prefrontal white matter who find it easy to lie," the researchers wrote.

"Although autism is a complex condition and cannot be taken as a model for lying, these results … converge with current findings on adult liars in suggesting that the prefrontal cortex is centrally involved in the capacity to lie."

tango's picture

Haven't you heard? Austerity to Europeans (and apparently Americans) means raising taxes.  I'm not exactly sure how that qualifies under the definition of austerity but as long as we pretend, it's all OK.  Notice that despite the evil austerity, the size of the State has not shrunk and its impact in the economy has only increased - an odd situation for "austerity".    

These idiots have not figure out that removing ANY monies from the private sector (rich or poor) has the same effect - less capital, less spending, less savings, less investment. 

midtowng's picture

Greece HAS cut government spending. Their health care system is in a state of collapse and wages have fallen, especially for public workers, by 30% or more.

Sudden Debt's picture

Yeah, but Obama Bro as got Imself A Plan To FiX it all Man!

Ricky Bobby's picture

Sudden - your statement has been construed as racist by Al Sharpton of MSNBC.

Section 48-111-22 of the new health care bill states that racism is a mental disorder. You will be required by the state to be injected with Soma-Tex a new psychotropic wonder drug jointly developed by Sandoz and Pfizer. Don't worry it has been proven effective by tests given at Pelican Bay maximum security prison. Members of the Aryan brotherhood were seen partying with the black gorilla family after treatment. That is of course, the members that survived the treatment.

Bicycle Repairman's picture

They will raise taxes on the rich.  It will fail.  Then they'll say they have no choice and they'll raise taxes on everyone.

It's for the children.

cynicalskeptic's picture

It dopesn't matter WHAT the tax rate is if NOBODY PAYS IT.  The rich in Greece have been masters at tax avoidance -they don't pay the current taxes rthey owe - what makes you think they're gonna pay any more?  Government has been sitting on  - trying to lose actually) a list of Greeks with Swiss bank accounts.... seems like the latest version in government hands was 'edited' to remove certain government officials....  

It's a charade to raise taxes on the rich when they avod it or don;t pay it  - here in the US the uber-wealthy don;t pay squat.  It's the upper middle class that get screwed - they pay the maximum while the poor get benefits and the wealthy hire accountants and lawyers to shelter their income.  But in Greece they don't even go that far - they  rich simply don't pay.   Where else do you have people putting camouflage nets over swimming pools to avoid detecion by tax officials checking satteliite photos?

Hard to have too much sympathy for Greece - those at the bottom milked the system like mad when the gov had access to cheap money courtesy of the EU (which Greece got into only by faking economioc numbers - with Goldman's help) while the rich never paid ANY share, mucjh less a fair one.

IridiumRebel's picture

Tax the flu

tax the rich


Atomizer's picture

Bwahahahahahahaha at party workers...

Faith Collapsing


suteibu's picture

Japan's "mulling" the same thing.  I guess every indebted nation wants to drive the rich to Thailand and Singapore...or Russia.

JPM Hater001's picture

Legendary tales still spun

Sudden Debt's picture

Soon EVERYBODY with a job will officially be called rich.

Damn this bowl with that frog is really starting to bubble right now...

Its_the_economy_stupid's picture

Thus we have a non-inflation indexed AMT.

Sudden Debt's picture

At which point will people with money figure out that they can't hide their money in any offshore bank?

Sudden Debt's picture

Maybe now the rich should head for the streets and start riot burning the shit out of Athens?

just a idea....

Landrew's picture

I agree with you, it's a great thing that 51% of all young people in Greece are without jobs! Maybe the rich could intro death camps to alleviate the joblessness? Yeah, we rich should never pay our way. The rich don't need consumers do they. I say close the schools, roads ,bridges and airports. The rich already have private planes they don't need us. The rich don't need humans, WE have robots and automation now. We really don't need you and it shows:)

Deacon Frost's picture

Well SD, to quote

F. Scott Fitzgerald’s 1925 short story titled “The Rich Boy”.

"Let me tell you about the very rich.  They are different from you and me.  They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand.                                                                                  They think, deep in their hearts, that they are better than we are, because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different."

Landrew's picture

Yeah, that's right the rich have done such a great job in creating jobs over the last five years! We wouldn't want billionaires to pay taxes would we. It's nice that Microsoft can pay 13% taxes in Ireland. We don't need them to pay their way here in the country that provides them with the schools, health care, roads, property rights and military to back up international rights? I say the jobless and homeless should pay all the taxes.

SilverIsKing's picture

How long ago was it when you lost your job?

Landrew's picture

Working since 9 without stop even during school. Put myself through school and my son. You may never have had to work like the rest of us. Tha'ts ok it's important to have TAKERS. 

Landrew's picture

Just for the record I am in the top 5% but realize I didn't get there without the help and sweet of others. Having lived in South America and seeing what the very rich do to people there. Before we turn this great country into Chile or Mexico it's time for a change.

Anusocracy's picture

Except for gun control, we would be better off being like Chile.

Landrew's picture

I lived there! GO fuck yourself! I have lived in Chile NOT a vacation, LIVED there and lived in France and here in the GREAT country of the U.S.A. and I tell you go live in Chile and you will be back in six months ha! I would rather live in France then Chile having done both. France is a paradise compared to Chile. I still will go back to work and turn down job offers and I will still come home until the BILLIONAIRES fuck this country beyond repair! You don't know but most of us here on Z.H. have more in common with the guy who works and lives in his car then the BANKSTERS! Billionaires don't give a crap about you but, I do even if you have no clue what your talking about:)

sun tzu's picture

The problem with idiots like you and the OWS crowd is that you lump people who make $200K a year in with Warren Buffett, Google, Soros, and GE. People who make $200K are in the 1% and pay a shitload of taxes. Google and Buffett do not because they transfer the profits offshore or hire 1000 tax attorneys. 


Now let's talk about the jobs that 0bozo's trillion dollar deficits has created the past 5 years. There are fewer Americans working than 20 years ago even though the population has increased by 50 million people

Anusocracy's picture

All taxes should be voluntary.

Otherwise it is slavery, political slavery.

New slavery, same as the old slavery.

oddball's picture

Taxes are voluntary, you can leave the USA anytime you want.  </sarc>

sun tzu's picture

There is an exit tax, or didn't you know?

oddball's picture

Absolutely.  Did you miss the </sarc> tag?   

Its_the_economy_stupid's picture

It will come to a consumption tax. None will be spared.

Its_the_economy_stupid's picture

The least advantaged will create local scrip to defeat such a tax.

Never One Roach's picture

The "rich" don't pay taxes. They pay their CPAs.

SilverIsKing's picture

So change the tax code and stop fucking complaining that people want to keep what they worked hard for. If they're not breaking any laws, they've done nothing wrong.

oddball's picture

Change the tax code, and what, throw out the carrot?  You must be kidding?

Next you are going to tell me voting matters.

Tango in the Blight's picture

True, you're pretty dumb if you pay taxes when you're rich. There are so many constructions with foreign Ltd's which you can abuse. Even people who are not-so-rich use them to hide their true wealth.

sun tzu's picture

Are you talking about the $250K a year rich like the democrats or the real rich like Buffet, Gates and Soros?

Its_the_economy_stupid's picture

Because barter cannot be enforced in even the most local of economies.

lolmao500's picture

While it's heating up in Asia...

N. Korea tells China planning nuclear test: report
"We've heard a North Korean official in Beijing told the Chinese side that the North planned to carry out a nuclear test between January 13-20," the Joongang Ilbo daily quoted an unidentified Seoul official as saying.

Chartist's picture

You either pay a living wage that allows folks to pay more in tax, or you tax the guy who pays a minimum wage more...You can't have it both ways.

Unstable Condition's picture

...or you could cut spending.

Chartist's picture

No you cannot.  That's exploitation. 

A Nanny Moose's picture

Paying a living wage, living retirement, and living healthcare benefits with other people's money, is what got them into this mess.