The Biggest Problem For Greece Isn't Debt: It's This

Tyler Durden's picture

"Greeks consider taxes as theft," which, among other things, explains, as WSJ reports, at the end of 2014, Greeks owed their government about €76 billion in unpaid taxes accrued over decades; the government says only €9 billion of that can be recovered, with most of the rest lost to insolvency. Syriza is now making tax collection a top priority among the measures promises the new Troika, but as one government official warned, "the Greek economy would collapse if the government were to force these people to pay taxes." The bottom line is that "normally taxes are considered the price you have to pay for a just state, but this is not accepted by the Greek mentality," and perhaps with this latest round of deference to the EU overlords, it is clear why...



Greece’s new government, scrambling to secure another tranche of short-term funding, agreed on Tuesday to make tax collection a top priority on a long list of measures. Yet previous governments have made similar promises, only to fall short. As The Wall Street Journal reports,

“Greeks consider taxes as theft,” said Aristides Hatzis, an associate professor of law and economics at the University of Athens. “Normally taxes are considered the price you have to pay for a just state, but this is not accepted by the Greek mentality.”


Indeed, for most Greeks tax evasion isn’t considered a serious crime and there is little stigma attached to getting caught, unlike in other European countries or even the U.S.




Kosmas, a 32-year-old chef in Athens, says his income taxes are automatically deducted from monthly paychecks. But every time he buys something and he is given an option to pay less if he doesn’t ask for a receipt, he says yes.


“It is a win-win situation,” he said. “I pay less for the products and the store pays less in taxes.”




The government’s tax-revenue shortfall in January alone was 23% below its €4.5 billion target for the month.


Last week, the government outlined plans to forgive up to 50% of individuals’ tax arrears, a sign would make good on its campaign rhetoric.


Syriza would risk a popular uprising by the very people who put it into power if it were to back away from those policies and get tough on taxes, political analysts warn.


Even within the government’s own ranks, officials say Syriza can’t risk tougher enforcement.


The reason isn’t just political, but economic.




“The Greek economy would collapse if the government were to force these people to pay taxes,” said one senior government official.

*  *  *

And it seems they are already in trouble...

Greece admitted on Wednesday it will struggle to make debt repayments to the IMF and the European Central Bank this year as Germany's finance minister voiced open doubts about Athens' trustworthiness.


A day after euro zone finance ministers agreed to a four-month extension of a financial rescue for the currency bloc's most heavily indebted member, Finance Minister Yanis Varoufakis gave a frank assessment of Greece's financial position.


"We will not have liquidity problems for the public sector. But we will definitely have problems in making debt payments to the IMF now and to the ECB in July," he told Alpha Radio.

*  *  *

More broken promises to come...

Of course the answer to Greece's problems is simple:

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LawsofPhysics's picture

Please, in the current global corporate/feudal/crony system, this is a global issue.

jbvtme's picture

why don't the greeks rehab some of those old buildings.  that'll get the economy moving...

boogerbently's picture

This is what happens in a something for nothing country.

Are the Libs paying attention ?

Cangaroo.TNT's picture

Dear Yanis,

No one gives a fuck about what you have to say anymore.


Planet Earth

Wolferl's picture

Finally. Tyler Durden gets it. The problem of Greece is ... the Greek people. And nothing else.

boogerbently's picture

That is why showing Greece the door will be the best thing for EU.


Be careful what you wish for.

maskone909's picture

In economics, the Laffer curve is one possible representation of the relationship between rates of taxation and the hypothetical resulting levels of government revenue. The Laffer curve claims to illustrate the concept of taxable income elasticity—i.e., taxable income will change in response to changes in the rate of taxation. It postulates that no tax revenue will be raised at the extreme tax rates of 0% and 100% and that there must be at least one rate where tax revenue would be a non-zero maximum.


One potential result of the Laffer curve is that increasing tax rates beyond a certain point will be counter-productive for raising further tax revenue. A hypothetical Laffer curve for any given economy can only be estimated and such estimates are controversial. The New Palgrave Dictionary of Economics reports that estimates of revenue-maximizing tax rates have varied widely, with a mid-range of around 70%.



CH1's picture

Greeks consider taxes as theft...

All hail the Greeks!

DJ Happy Ending's picture

Even with this example of a newly elected government changing its positions immediately after being elected, I still doubt 1 in 100 people will see through the false left/right divide and conquer paradigm.

You are fucked because of the ignorance of your fellow man.


N2OJoe's picture

Actually theft implies that the victim is unaware of the act until after the fact. Robbery on the other hand is:

Law. the felonious taking of the property of another from his or her person or in his or her immediate presence, against his or her will, by violence or intimidation.
I would push it further and identify taxes as armed robbery unless you live in a country where they don't send armed men to your residence for missing a payment(lol).


Anusocracy's picture

Thanks for the distinction. So it's theft through inflation and robbery through taxes?

zaphod's picture

Am I the only one who finds that chart aspirational?

Pseudonymous's picture

Inflation is fraud and taxation is extortion and/or robbery. The word "theft" is sometimes used as a broad term for all of the above and others.

Stuck on Zero's picture

Here's an economic quiz question and answer:

Q: What does the government do if raising taxes produces less revenue?

A: Raise taxes.


bonin006's picture

They obviously didn't raise them enough.

TheAntiProgressive's picture

They have a budget that they voted on and we have to fund errr..... invest in the budget.

Anusocracy's picture

"Greeks consider taxes as theft...

All hail the Greeks!"

But they still want government.

Things that go bump's picture

I never realized I was Greek.

Al Tinfoil's picture

"Greeks consider taxes as theft".

What if the Greeks have it right, and we taxpayers have it wrong?

Stackers's picture

You also have to understand the ridiculously enormous tax burden the Greeks live under too.

Perfect example popped up on A/C Cobra kit car forum I was reading through.

These kits can be built for $30-50,000 including donor car Mustang in the US.

By the time this poor shumck in Greece finished laying out all the import duties, registration taxes, VAT taxes, and large displacement engine taxes he was up to almost $175,000 to $200,000 in total cost for a $40,000 "kit" car.

Getting to skimp around sales tax for purchases can save you up to 23% !

maskone909's picture

damn!  i personally would just turbo the factory oem stang.  cobras engines are built with forged internals and they love forced induction.

t0mmyBerg's picture

And that is the point.  No one minds paying their government tithe if that tithe is fair and used justly.  Like the Greeks, the US fails on both counts and their mentality will more and more come to be our mentality.

For example, is 40% of income a fair amount to pay?  Can anyone justify that?  And when your tax dollars are "lent" to George Kaiser and Solyndra, which miraculously then are paid out to him and his workers and a portion recycled back into Barack Obama's campaign fund, and then the company says "oops, looks like all that money was lost sorry taxpayers" and they seek bankruptcy protection can one really say your tax dollars are being used well?  I do not think so.

hardmedicine's picture


Vote down!


And that is the point.  No one minds paying their government tithe if that tithe is fair and used justly.

This is where I learn who here are really libertarian and who are just left/right republicrats wanting more of the pie on their side.  NO ONE MINDS... speak for yourself.  I don't mind paying for something as long as I get to say when and where and what i pay for and if I get to return it or complain about the product or just decide not to buy it next time.  With government none of this applies and that is where I have to depart from this mentality.  A voluntary government could be had here if the people were finally educated enough to conclude that we could have a wonderful system that was not based upon armed robbery.  The only thing a federal government is good for is for policing our borders and prosecuting the few real criminals who actually destroy human life or property......... where there is a REAL victim.  Both of those functions are being absolutely FAILED by our government so the money I pay is absolutely being wasted and pilfered and I don't care who I vote for next month or next year it is going to remain the same because of all the corruption. The other function of a government is to regulate and coin the money which according to the constitution , last I checked, was only to be gold and silver based.  FAIL again. 


Other functions of government can be handled at the state and local government or can go private.  You want to go to the doctor..... pay for it.  You want to drive on that nice road pay for it.............  When are people going to understand that everything the government pays for is first taken from a productive citizen?


Well, I guess I can continue to talk and thank God for the grandmother who taught me.  Not that it's going to get me anywhere but.

t0mmyBerg's picture

Well, I am not speaking for others, merely making a statement of fact I believe would be corroborated if the votes were tallied on that point.  But you are right, I should not have spoken categorically.  I should have said "Almost no one.."  That way I would not include you in the set.  I likely agree with you on most things, though in a dangerous world you cannot escape some spending on defense (by which I mean actual defense as in defense from invasion of our actual bit of land in what we call the western hemisphere).  In which case you are almost certainly going to need a bit of tax to the feds.  And again I mean a little bit.   Anyway those kinds of arguments can get voluminous.

Ayreos's picture

The possibility of warfare is in itself a form of theft. The theft of safety. All it would take is for a non-puppet UN to ban all forms of warfare on the global scale, as well as all forms of defense budgets and mechanized weaponry. It's ludicrous that each country on earth has to dedicate precious resources and efforts in constantly fuding a military capable of at least intimidating its neighbors...

Of course, theory and practice are worlds apart.

Pseudonymous's picture

This is where I learn who here are really anarchist and who are just this small- or that small-government statists still wanting some of the pie that is long rotten and unnecessary.

Security, prosecution and coinage are separate activities or industries that can and should be provided in the most decentralized fashion practicable. You need both division between industries and a free market within each industry (the former coming naturally with the latter). The last of your desired government function really baffles me, given that currencies can be (and have been historically) as simple as natural commodities with a spontaneously emerging standard for their form. So a currency can only suffer from having any authority attached to it, while it does not at all need any authorities as it can be something as simple as a standard for a metal composition and weight units (e.g. .9999 pure gold being the currency, troy ounces of it being the base unit and 1ozt of it being the numéraire), not to mention the more complex standards such as Bitcoin, which too work without any sort of authorities.

You don't need any government, in the traditional sense as an entity that levies (non-voluntary) taxes or combines multiple unrelated services or functions, at any level, be it county or global. Every single one of the legitimate services and functions you think of can be provided by commercial and/or cooperative entities, systems, networks, protocols, standards, etc. and there is generally no need to combine different services together either. I would go even further and challenge you to identify even a single such service or function which has not been provided outside of any government at some point in history or some place on earth.

Anusocracy's picture

Kit cars, eh?

My brother was involved in that through Kelmark Engineering.

Wolferl's picture

Yeah, but those Greek MFs don´t want to go. Because it´s so cozy to suck at the big fat tits of mother EU for free.

zuuuueri's picture

correction: the MFing politicians don't want to let go. the people do. 


Ignatius's picture


"Greeks consider taxes as theft..."

Hard to figure -- taking into account this Greek sentiment -- that we ZHrs aren't falling over one another in praise of this ancient Greek wisdom.

Encroaching Darkness's picture

Damnation! A WHOLE NATION with the proper understanding of taxation? How do we encourage this educational breakthrough worldwide?

I knew I read "Ulysses: for a reason!

Charming Anarchist's picture

Dear WSJournalists, 

We need to update our registry.  Please trawl for new tax dissenters among the sheeple. 


Thank you. 

TBT or not TBT's picture

A lot of people in the U.S.A. lament that "Social Security" won't be there for them, and yet their wages are garnished nominally to go into the scheme.   Every last one of those knows they are being ripped off.   In the case of Greece, this isn't just angst.   The Greek population is aging very rapidly due to decades of catastrophically low birth rates.   There won't be a Greece left to pay back anything to the remaining impoverished decrepit.   

Usurious's picture
Usurious (not verified) Wolferl Feb 25, 2015 11:32 AM

lets call it what it is.........BANKSTERISM

zuuuueri's picture

this tired out line of propaganda keeps on getting trumpeted by the media, and it is a flat out lie. Check out the numbers -  and you will see that they do indeed collect a lot of taxes in greece. Who is paying these taxes if not the people? central government revenues in greece are 45.8% of GDP (2013) - oh wait , what GDP you say? the GDP whose numbers are inflated implausibly large because it's an input to all kinds of EU GDP-indexed limits, because it's a politically sensitive number, because it's one of the key criteria in the troika strait jacket, because it's a number which everyone in this modern loony-bin of an economy hangs on day and night? the real GDP in greece is lower than this number, not higher, as a bunch of insatiably greedy politicians and economists like to spout (claiming 'black market' activity) who want narrative to justify even more extreme robbery. The greek state collects north of 60 billion euros a year in revenues - actual money paid by greeks to the state in the form of taxes - in a country where unemployment is north of 30% and where those lucky enough to have a job are making less than a thousand bucks a month.. Exactly how much more blood do they think they can get from this stone? this article and so many like it are propaganda pieces to justify the ongoing plundering of a country. all you slaves cheering it on, you will learn only too late, when you find the same monster at your own door.

Wolferl's picture

You´re right, those statistics make no sense at all. That´s why i stopped reading and believing in Greek statistics a long time ago. The Greeks don´t even have a reliable database for all those numbers, heck, they didn´t even had computers in the finance ministry less than 10 years ago. And even those statistics about Greece from OECD or Eurostat make no sense too since they are based on numbers by the Greek government branches who probably rolled some dices to get them. Shows you that Greece is nothing more than a third world country and has nothing to do in the EU.

zuuuueri's picture

but the amount of tax collected is an actual number. The GDP itself is totally fudged, but it's fudged _upward_ so the real number is very likley even less - the implication being that these fuckers are already squeezing every last penny they possibly can get. 

the continuing media line about 'greeks dont pay taxes' is an insulting lie. 

now, the fact that we know that taxes are theft? yes, we do know it. Anyone who doesn't has got to have certifiably shit for brains. We don't pay because we like to , we pay for the same reason a lot of sane people do, because if you don't, goons with guns come after you. 


Wolferl's picture

I´m not sure if it´s the actual amount of taxes paid or if it´s just the amount that should be paid. I fear it´s the later.

zuuuueri's picture

oh, and something else about this article:
percentage of tax collected is a number that can be entirely made up by the ministry of finance by imagining that there is more tax due than they have collected. I have explained a lot of this before: there have been hundreds of thousands of bankruptcies in the past few years- very few of these formally through court because , who has the money to pay for lawyers and what will he gain when the case will drag a decade through the courts? Take a walk anywhere in greece in 1990, 2000, 2010, and now. you'll see the past 5 years a humongous number of shops closed up, dusty, broken windows, and worn faded 'for rent' signs _everywhere_. youll see a couple hundred thousand small family businesses have gone under. They might indeed owe some back taxes, but in greece, there is a lot of unjust 'debt' here: it costs between 3 and 6 thousand euros a year _minimum_ just to keep the paperwork to be able to have a business. This is not a tax on the business turnover, or on capital investment or depreciation or flow or whatever, this is just the minimum overhead to legally have a business. Now, lets say the economy went itno the shitter a couple years back and youre finally broke. You wanna close it down. You can't, until you pay another 2 to 3 thousand euros minimum (it can be a lot more!) in taxes and fees to shut down a business... oh wait you were broke, right? where you gonna get the 3 grand to close down the business? so you just stop operations. Go to the address, youll see the place has been empty for the past 3 or 4 years.. but on the tax office's books that is still a business, and since they havent' deregistered they owe for 2013, 2014, plus fines and interest and penalties,
that kind of fantasy 'revenue' is a lot of what is 'owed'. it looked good in previous rounds of this debt game , for greek politicians to claim 'see we have all this extra revenue that's billable, we just need to improve collection some more' ....more lies.

Leknam's picture

Agree, this post seems more likely than the narrative. Much the same as in Italy. Don't have the numbers

but the system is very much the same. You have to pay taxes in advance if you have a business,also pay taxes just to be in business. Pay taxes before you do business, lol. What chance do these people have.

As an aside, also with the sanctions in place by europe to russia eg; an apple ( the ones you eat not the I ones ) producer with client in russia

is not allowed to export his produce to his russian clients. NO compensation from the italian government or the european family, but still has taxes to pay. F ck u pay me. 

Augustus's picture

I cannot tell from those numbers how the "government revenues" are actually computed.

Remember that the Greek government owns substantial sectors of the economy.  If those revenues are being included than the numbers are not exxactly what you might expect them to be.  Including railroad revenues and expenses would make for a different picture than might be expected.

tmosley's picture

I wonder if Neo kept paying his rent after he took the red pill?

BigJim's picture

Sure he did, he just started paying it to Zion instead.

StychoKiller's picture

Meh, the Greeks are right, taxes are theft!

Augustus's picture

It is interesting to watch as a socialist video gaming Finance Minister gets knocked back with a dose of German reality.  The dangerous moments are comming when these pols have to "explain" it to those who elected them, believing in the fantasy.

froze25's picture

Logic and  reason do not exist for them when it doesn't serve their motives.  The people that they mostly sell their bullshit lies too do not think critically or with logic and reason they react on mostly basic emotions and greed due to many of them being in desperate situations and being "given a fish" instead of being "taught to fish" for multiply generations now.  So the answer is that they are paying attention but they don't give a shit.