Greece Ready To Tax Those In Poverty

In Greece, even the poor and beggars may now have to pay taxes, but tax evaders won’t

Looking everywhere for cash, a frantic Greek government is reportedly ready to scrap the tax-free threshold of 5,000 euros, or $6,561 a year and make the desperately poor pay taxes for the first time.

The level had been reduced to 12,000 euros, or $15,747 previously, but the government now said it needs the $1.96 billion a year that could be saved by taxing everyone.

Greece’s statistics agency has estimated that there are nearly two million people, or almost 20 percent of the population, now living under the poverty line, a number that increases daily with almost another two million people out of work and hundreds of stores closing every week in a deep recession and desperate economic crisis.

Hit by relentless pay cuts, tax hikes and slashed pensions demanded by international lenders to keep rescue loans coming, Greeks are increasingly finding ways to evade taxes, which has already cost the government $70 billion, a bill that’s rising by $15 billion a year.

A recent Finance Ministry report found that of 779,319 self-employed people and freelancers, some 457,386 – or nearly 60 percent – declared they made under the 12,000 euros threshold, including most every professional profession, fueling speculation that Greeks are trying to evade taxes every way they can.

There is fury too that workers, pensioners and the poor are carrying the burden while many Greeks believe that politicians and the rich have secret bank accounts in Switzerland and offshore banks to avoid taxes. The Swiss Banking Association has just refused to release the names of Greeks with accounts in that country, despite a request from 300 Greek politicians and their spouses who said they want to prove they are not hiding assets in violation of the law.

Greece’s lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is putting up $325 billion in bailouts, has proposed there be only four tax brackets:

  • 18 percent for those making 0-22,000 euros
  • 35 percent for 22-45,000 euros
  • 40 percent for 45-100,000 euros
  • 45 percent for over 100,000 euros

Prime Minister Antonis Samaras, the New Democracy Conservative leader, is struggling to get his reluctant coalition partners, the PASOK Socialists of Evangelos Venizelos and the tiny Democratic Left of Fotis Kouvelis, to renege on campaign pledges before the June 17 election in which they vowed to protect the poor and vulnerable. The government is planning another $14.6 billion in cuts, aimed primarily at workers, pensioners and the poor.

Venizelos, who as finance minister in a previous PASOK government that fell last year after constant protests, strikes and riots against pay cuts, tax hikes and slashed pensions, had doubled income and property taxes and was the one who lowered the tax-free threshold to 12,000 euros, but now is said to be trying frantically to distance himself from more harsh measures as his party’s popularity has plummeted to only 8 percent.