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Greek Tax Hikes Backfire As Tax Revenues Plunge 16%

Tyler Durden's picture




 

There was some hope that Greece, which for the past few months was desperately trying to show it has a primary surplus when in fact it was merely shoving unpaid bills under the rug, was at least getting its runaway deficit situation under control. This, despite what many sensible people pointed out was the return of nearly daily strikes, which meant zero government revenue as zero taxes could be levied on zero wages. Turns out the sensible people were again right, and the Greek and European propaganda machine has failed once more as the Greek Finance Ministry just reported that despite big tax hikes demanded as part of austerity measures by international lenders, tax revenues fell precipitously in January, with the Greek Finance Ministry reporting a 16 percent decrease from a year earlier, and a loss of 775 million euros, or $1.05 billion in one month.

This means that the government took in only €4.05 billion ($5.47 billion) in tax revenues in January, far short of its target of €4.36 billion ($5.89 billion), a $420 million shortfall in one month, which also came during an annual holiday sales period for shops who are bleeding customers and shutting down by the thousands.

It is all downhill from here as the feedback loop of more spending cuts is activated to offset declining revenues, leading to even less revenue, and culminating with the complete collapse of Greek society.

From Greek Reporter:

If Greece fails to meet revenue targets it will trigger a correction clause at the end of each quarter of the year, setting off automatic spending cuts except for pensions and salaries. That could further harm already-depleted government services.

 

Finance Ministry officials attributed the decline in tax revenues to the drop in consumption, as revenues from Value Added Tax (VAT) shrank by 15 percent, while those from the special consumption taxes were also lower. Greeks hammered by big pay cuts, tax hikes and slashed pensions have cut back spending even on essential items, with supermarket sales falling 500 million euros, ($6763 million) in 2012.

 

The numbers could have been worse as the government gained revenues from doubled property taxes and big hikes in income taxes that have hit most Greeks except for tax cheats who continue to largely escape sacrifice or prosecution.

This may well be the last straw for a "fixed" Greek crisis - "the only options left for the government is to collect from tax evaders and improve tax collections, although tax hikes have led to many more Greeks trying to hide their income, statistics showed." Of course, nobody could have predicted that too.

The Troika and other EU countries offered to help Greece collect taxes but little interest has been shown by the government. The new General Secretary for State Revenues, Haris Theoharis, plans to meet directors of the 36 biggest tax offices in the country to study ways of collecting expired debts, according to proposals by the country’s creditors and the European Commission’s Task Force for Greece.

Does this mean that paying hedge funds at 50 cents on the dollar on their worthless Greek bonds was not the best idea?

But, but the spin was that if only all Greek debt was converted into zero coupon perpetuals all would be well?

Or maybe they were just referring to Deutsche Bank. As for the Greek population, where everyone is simply doing what they can to survive, which certainly does not mean paying taxes to the government, it is every man, woman and child for themselves.

Finally, one can only hope that the US will learn something from what this terminal collapse of a socialist utopia looks like. Sadly, it won't.

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Thu, 02/07/2013 - 09:12 | 3222548 francis_sawyer
francis_sawyer's picture

Meanwhile... In the black market...

Thu, 02/07/2013 - 09:15 | 3222552 GetZeeGold
GetZeeGold's picture

 

 

Looking for some .223 ammo? I can set you up!

Thu, 02/07/2013 - 09:17 | 3222560 francis_sawyer
francis_sawyer's picture

I'm in the 'primer' category...

Thu, 02/07/2013 - 09:19 | 3222564 GetZeeGold
GetZeeGold's picture

 

 

That's some serious stuff you're talking there Amigo.....I'll see what I can do.

Thu, 02/07/2013 - 09:25 | 3222579 francis_sawyer
francis_sawyer's picture

Frankly ~ I'm kind of on hold at the moment... I really think all this recent hype is going to blow over... [Hope so ~ at least]... But to me, running around like a chicken with your head cut off is like chasing a market TOP... When shit gets like that, I'd prefer to stand back [or look for ideas that nobody else thought of]...

Thu, 02/07/2013 - 09:39 | 3222614 LawsofPhysics
LawsofPhysics's picture

I agree.  A former colleague is working at a gun shop and the majority of his AR sales have been to first time gun owners who "wanted to get one before they are no longer available".

These idiots will never fire the thing and then sell it for a major loss when they figure that out.

Thu, 02/07/2013 - 09:43 | 3222624 trav777
trav777's picture

nations full of lazy tax dodgers shouldn't have big socialist governments

Thu, 02/07/2013 - 09:45 | 3222633 youngman
youngman's picture

No that is EXACTLY how they think.....someone else should pay...not me....

Thu, 02/07/2013 - 10:21 | 3222737 francis_sawyer
francis_sawyer's picture

@LOP [above]

~~~

Exactly ~ My thinking is twofold

- S[actually does]HTF ~ There will be plenty of shit lying around [for free] from dead people who didn't know what TF they were doing...

- Otherwise ~ 'go back to basics' & figure out what you need to manufacture the stuff yourself... Set yourself up with raw materials & components...  

~~~

It's the same as with everything else...

Hang around the dumpster bin of any big box retailer, or Home Depot & you can scrounge yourself up just about anything you need to build anything...

Dipshits ~ I was driving y a HomeDepot awhile back after a snowstorm & saw people walking out with 40 pound bags of 'de-icer' which they were paying $10 a bag for... In the corner of this same ginormous parking lot was a pile of salt... So I walk in & buy 2.5 gallon paint buckets for $2.60 a piece, walk out, & scoop myself up 80 pounds of salt... Take it home, dump it in a container & now I have still have two extra paint buckets...

I should just rinse them off & return them, but they're always handy...

 

Thu, 02/07/2013 - 10:52 | 3222825 economics9698
economics9698's picture

Laffer Curve.  Any tax rate above 25% will have negative returns.

Thu, 02/07/2013 - 10:58 | 3222845 LawsofPhysics
LawsofPhysics's picture

It is much, much simpler than that as that which does not exist, cannot be "collected".

Thu, 02/07/2013 - 11:57 | 3223082 Carl Spackler
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Yes, but those 40 pound bags had a beautiful logo on the side.  The art on the bag, alone, had to be worth $7.40 to the sheeple.

 

Thu, 02/07/2013 - 12:33 | 3223204 francis_sawyer
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Fuck man ~ It gets worse... I happened to catch a small segment of the ESPN show "OTL" [Outside the Lines"]... The subject was on "knock off replica merchandise"...

They were interviewing this guy who hadno problems buying Chinese knock-offs of 49ers jerseys for $30 [which were almost 100% identical to "official NFL merchandise"] & wereby the same thing costs $200...

So at one point they cut to some twit spokesperson for the NFL to ask her about the situation...

Sternly ~ she starts off by saying "Well, first of all, it HURTS THE ECONOMY"!...

I almost had an anuerysm... No bitch!... It hurts the NFL... Yeah ~ so I save $170 [to presumably spend elsewhere, in many diffrent places] & I'm hurting the economy... Not to mention the fact that whatever the hell you buy, it's all being manufactured from slaves in China...

Reminded me of that "but gold isn't backed by anything" reporter...

Thu, 02/07/2013 - 12:27 | 3223185 NooooB
NooooB's picture

I logged in just to tell you that you are my new hero... That is all...

 

As a token of my esteem I will introduce you to an hilarious New England-ism. The term for the 2.5gal bucket is "smaller 5gal bucket"... You are welcome.

Thu, 02/07/2013 - 12:43 | 3223229 francis_sawyer
francis_sawyer's picture

I don't know how that "." go in there... What I meant to type was (2) "5" gallon buckets... [which you can just about do anything with, from shovel, to measure, to mix soap in, to collect rainwater, to seal dry goods in, to fill with soil & grow food (just drill a couple of holes about an inch or two from the bottom for drainage)]... They'll even hold your nickle collection...

Just try not to get any of the above mixed up...

Thu, 02/07/2013 - 10:44 | 3222809 Groundhog Day
Groundhog Day's picture

If the elected are hiding their money to avoid taxes in swiss accounts, why on earth should ordinary citizens who have much less pay?

Same goes in the US, Turbo Timmay dodges so why shouldn't everybody

Thu, 02/07/2013 - 10:58 | 3222843 mess nonster
mess nonster's picture

Hey, who broke my social contract?

What, it was just a non-functional display copy?

Every man for himself!

Thu, 02/07/2013 - 09:45 | 3222636 LawsofPhysics
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Indeed, unfortunately both the lazy tax dodgers and fascist governments need to be taken the fuck out.

Thu, 02/07/2013 - 09:46 | 3222644 GetZeeGold
GetZeeGold's picture

 

 

Damn.....that's almost genius there.

 

Mind if I bring that up at the next PTA meeting?

Thu, 02/07/2013 - 10:57 | 3222841 Taffy Lewis
Taffy Lewis's picture

trav777, but the IRS will be much more efficient at sniffing out the Obamacare scofflaws.

I see many new reality TV series starring the IRS - replete with camera-toting mini-drones - for years to come.

Thu, 02/07/2013 - 11:03 | 3222855 Meat Hammer
Meat Hammer's picture

The argument about who should pay what in taxes and who should be called a "tax dodger" is, by its very nature, flawed by the belief that a centralized government having more money is a good thing.  

Thu, 02/07/2013 - 09:30 | 3222580 Big Slick
Big Slick's picture

A relative of mine who lives in Andy Kuomo's People's Republic of New York says rifle ammo is starting to be seen on the shelves again, but trickling in very limited quantities/calibers.  Most retailers have imposed individual buying limits of 2-9 boxes/day (depending on store).  Internet ammo to PRNY is now prohibited. 

Thu, 02/07/2013 - 09:37 | 3222604 TerminalDebt
TerminalDebt's picture

100 shells per box?

Thats 200-900 a day, should have enough in 2 weeks of buying :)

 

The police takes around 100 shots per victim, I'm not that well trained, figure I need 200 shots per looter.

Thu, 02/07/2013 - 09:44 | 3222630 Big Slick
Big Slick's picture

I shouldv'e been clearer... 20 rd boxes, so like 60 rds/day.  And your aim is better than mine :)

Thu, 02/07/2013 - 17:04 | 3224095 mjcOH1
mjcOH1's picture

So let's see....you're one of the few remaining Greeks who pays their taxes and your rate goes up 16%.   What to do....

Aristotle shrugged?

 

 

Thu, 02/07/2013 - 09:36 | 3222605 insanelysane
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Road trip!

Thu, 02/07/2013 - 09:40 | 3222615 ExpendableOne
ExpendableOne's picture

So a carload of cigaretts, .223 and 7.62 should make for quite a profit eh?

Thu, 02/07/2013 - 10:52 | 3222829 Banksters
Banksters's picture

They should send in more German tax collectors.  Snark

Thu, 02/07/2013 - 09:13 | 3222549 Big Corked Boots
Big Corked Boots's picture

This truth will be lost on the world's masters.

Thu, 02/07/2013 - 09:15 | 3222556 GetZeeGold
GetZeeGold's picture

 

 

Screw your Laffer curve.

Thu, 02/07/2013 - 09:27 | 3222586 Big Slick
Big Slick's picture

???  Wouldn't this suggest the Laffer curve is valid?

Thu, 02/07/2013 - 09:29 | 3222589 GetZeeGold
GetZeeGold's picture

 

 

Yes.

Thu, 02/07/2013 - 09:36 | 3222608 Big Slick
Big Slick's picture

Thanks Gold.  Everything I learned about the Laffer curve I learned in Ferris Beuller

http://www.youtube.com/watch?v=dxPVyieptwA

BTW - cameo with Ben Stein: everyone's favorite pre-subprime mortgage denier.  I remeber a long pre-2008 article by Stein (with real math) about how even if the bottom dropped out, the effects on our economy would be neglegible.

Anyone?  Anyone?   

Thu, 02/07/2013 - 11:16 | 3222892 mess nonster
mess nonster's picture

The Laffer Curve- brought to you by...

"A tax increasing in a percentage ratio to capital will give a much larger revenue than the present individual or property tax, which is useful to us now for the sole reason that it excites trouble and discontent among the goyim."

-Protocol #20

"Although economist Arthur Laffer,[3] does not claim to have invented the Laffer curve concept (Laffer, 2004), it was popularized with policy-makers following an afternoon meeting with Nixon/Ford Administration officials Dick Cheney and Donald Rumsfeld in 1974 in which he reportedly sketched the curve on a napkin to illustrate his argument.[4]"

"The term "Laffer curve" was coined by Jude Wanniski who was also present. The basic concept was not new; Laffer himself says he learned it from Ibn Khaldun and John Maynard Keynes.[5]"

-Wikipedia

So, if tax revenues approach zero at both 0% rates and 100% rates, what if it is not only the rates which are variable, but the incomes?  I mean, if  I am not making any money, then tax rates aren't going to be 35% for me any more, and revenues are going to approach zero.

Oh, Dick and Don, you thought you were soooo fucking smart...

Time to dust off the flat tax again, but it will piss off the proles.


Thu, 02/07/2013 - 09:46 | 3222631 kridkrid
kridkrid's picture

correlation vs. causation. It's a reasonable observation given a certain set of circumstances. Like most economic theories, way too many variables to draw concrete conclusions, I think.

Thu, 02/07/2013 - 09:28 | 3222587 schatzi
schatzi's picture

It's not even the Laffer curve that's relevant. Changing tax rates means fuck-all if you don't have people efficiently collecting and enforcing.

Thu, 02/07/2013 - 09:32 | 3222593 GetZeeGold
GetZeeGold's picture

 

 

Dressed in camo......for full effectiveness.

Thu, 02/07/2013 - 09:35 | 3222602 moregoldplease
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Let's keep it that way :)

Thu, 02/07/2013 - 11:18 | 3222910 mess nonster
mess nonster's picture

Hence, gun confiscation, microchipping, drones, and DHS civilian security force.

Thu, 02/07/2013 - 09:34 | 3222600 Bad Attitude
Bad Attitude's picture

Dear Leader keeps telling us that more taxes are healthy for the US economy. Dear Leader keeps telling us that more redistributionist spending is good for the US economy. Dear Leader keeps telling us that more federal debt is good for the US economy.

I don't believe a damned thing Dear Leader says.

I just keep buying food and ammo.

Thu, 02/07/2013 - 09:37 | 3222611 moregoldplease
moregoldplease's picture

Hey! Wait a second once the wealth is redistributed there will a lot more money spent in strip joints, cruises, drug bars, etc. What's the problem?

Thu, 02/07/2013 - 09:47 | 3222648 Big Slick
Big Slick's picture

"I just keep buying food and ammo"

And now you're on a government watch list (me too).

I often wonder how much of a bribe it would take Tyler to give up my email address to the Feds.  With the pop-ups I see, probably not much.

Thu, 02/07/2013 - 10:22 | 3222753 John Law Lives
John Law Lives's picture

Don't give out your real name on such online public forums.

Maintain multiple e-mail addresses, and only offer up one to any moderator that you can afford to delete if needed.

Use Tor.

Trust no one.

Thu, 02/07/2013 - 10:28 | 3222785 Bad Attitude
Bad Attitude's picture

I'm pretty sure I've been on a government watch list since the early 90s when I was a Second Amendment activist.

Thu, 02/07/2013 - 10:44 | 3222817 John Law Lives
John Law Lives's picture

Me too.  I became a life member of the NRA in the early 90s.  BTW, is that a drone buzzing outside my window???

Thu, 02/07/2013 - 11:10 | 3222882 Meat Hammer
Meat Hammer's picture

And pay cash or convert to bitcoin.  If I knew how to hand-load .223 and set up a business that accepts bitcoin I'd be rolling.

Unfortunately, I don't believe in firearms nor cryptocurrency.  Forward!

Thu, 02/07/2013 - 11:21 | 3222915 mess nonster
mess nonster's picture

I have at least fifteen fake email accts, but due to GMO's, EMF's, crypto-estrogens, pesticide residues, and a youthful habit of recreational drug use, I can't remember any of them.

Thu, 02/07/2013 - 09:48 | 3222656 unplugged
unplugged's picture

get silver too - 90% coins

Thu, 02/07/2013 - 10:24 | 3222772 Bad Attitude
Bad Attitude's picture

Got some 90% silver, too. PMs have value if things don't completely collapse, and some level of civility remains.

I just don't believe the collapse is going to be orderly or civilized. When the EBT cards and Obamaphones stop working, all hell is going to break out - the parasites are going to become dangerously predatory.

And no, I'm not really prepared for that environment. (And, I really hope I'm wrong.)

Thu, 02/07/2013 - 11:26 | 3222942 BeansBulletsBandaids
BeansBulletsBandaids's picture

Don't forget a source of potable water or a way to filter non-potable water.

I think a lot of folks (not specifically directed at you, BA) forget the water. Food, ammo and silver are important - but if you run out of water in a few days it could be all for naught. I like to go with a rule of thumb of 3 gal per person per day. So a family of 4(with 2 small kids) I like to say 10 gal/day for ever how long you think the brown stuff will stay in the fan...

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