I'm tired of listening to this. Let me tell you what happens when you're 100% legal and declare everything up to the last penny you get as a software developer. In 2012 I had 100,000 Euros income paid 86,000 Euros spent on taxes (income tax with surprisingly different brackets than last year, "temporary" property tax, "temporary special contribution" 4% on the total turnover, mandatory social security, 55% of your current income tax as downpayment for next year). The year before I made 74,000 Euros and paid "only" 50,000 or thereabouts. In return I got: no schools, no roads, no pension, more taxes, more family members depending on me to live. The more you work the less you make (unless you have an ever-shrinking business). Crazy? That's the Greek tax brackets for you.
Meanwhile: I have to pay for my own hospital plan because in case I get sick I have to notify the public insurance carrier 15 days in advance of emergency surgery (no kidding!) or 3-4 months before booking an appointment with a doctor. I have to get an additional, expensive pension plan on top of the 350 Euros per month I am currently paying as mandatory social security because there will be no money when I'm 67 years old or have worked 40+ years to get the minimum pension of 700 Euros (nominal; actual payment after taxes and mandatory social security is around 480 Euros). I also need to set aside money to get the kids I'm planning on having to a private school because there are no teachers (not even substitutes) half of the time in the public schools.
If you are wondering why people tax evade you have to first ask the questions: 1. how much does the state take in taxes and 2. what does the state offer for the money it takes from its citizens? If the answers are "most of your money" and "not that much at all" respectively it doesn't take a genius to see why you get an endemic tax evasion for free.
Anyway. After three years of battling the system I gave up and moved away. My last tax filing in Greece was 2014 for my income in 2013. I am owed a 13,000 Euro tax return since August 10th, 2014. Of course it's NOT credited. And we're talking about money I have paid as a tax downpayment to the state since August 2013. They hold my money hostage for 2 years and they won't give it to me. Also, don't make the mistake of asking whether there's an interest rate for those two years. Don't be silly. There's not! Adding insult to injury I'm still a Greek tax citizen which means I get to pay taxes for the dividends I'm paid from my company abroad. Don't be ridiculous, of course they are NOT offset by the money the Greek state owes me! I have so far paid another 40+ thousand Euro taxes in these two years where the Greek state owes me the 13,000 Euro tax return.
I understand all this sounds alien to you. Why so much taxation, why no services in return, why the state isn't punctual in paying back. Beats me, brothers and sisters. I have concluded that one must be outright insane to try and do business if they're born in Greece.
I've only registered an account on/. to comment on this. Disclaimer: I'm not an economist but I did study basic macroeconomics in University. I am uniquely positioned to comment on this since I'm Greek and actually get to pay property taxes in Greece, unlike you, dear dunkelfalke.
Real estate is the typical investment in underdeveloped economies. In developed economies you place your money in stocks and bonds, having a more than fair chance of getting a ROI equal or higher than the inflation rate. So, if a German or American has about $50,000 they'll place them there. In Greece the inflation was at 20% until the early 90s whereas bond interest rates were at 14% and the stock market was anemic (even worse than it is today). In other words, placing your money on stocks and bonds would *lose* you money.
Therefore Greeks placed their money in (old) houses or would build their own with the combined effort of three or more generations of a family. I don't think that an average placement of $25,000 per person, over a lifetime of work, in brick and mortar makes that person "rich" by any standard.
The problem reading the statistics is that the valuation of the houses is based on Greece's skewed "objective valuation" system. This system assigns a price per square meter of property for each area, however this valuation is not grounded on market values. It's arbitrary and usually 5x-20x higher than the market value. For example, the "objective valuation" of a derelict house I've inherited from my father in a mountain village near Kalamata is 250 Euros per square meter when the market value is less than 100, for well-maintained property (as I said, mine is falling apart). I've heard of worse cases, e.g. a 1000 square meter field in a mountain village which only connect to the nearest villages via a single dirt road was 180,000 Euros. Market value? About 5,000 Euros.
The idea behind this irrational system is that the presumptive income is based on the "objective valuation" system which has a high tax-free bracket (I think it's currently at 140,000 Euros). If the market valuations were used, very few people would have to pay taxes based on the presumptive income derived from their property.
So, yes, on paper Greeks are extremely wealthy because of the typical Greek solution of cooking up the numbers towards a desired effect and not towards objectivity. In reality Germans have more (neither far more, nor far less) personal wealth and in immediately liquefiable assets. I'm stuck with a derelict house I inherited from my father, without electricity, and with ever diminishing market value. I still have to pay 600 Euros per annum for property taxes for this house. So, what does this property actually count for? An asset of purely imaginary value 15,000 Euros or an annual liability of 600 Euros?
And a final note: your mass media may want to portray Greeks as tax evaders but that's not quite the truth. Two years ago I paid 85,000 Euros income tax out of 110,000 Euros turnover. That's an effective taxation of 77% thanks to the highest taxation bracket being 43% and having to pay 55% of your taxes as a downpayment for next year. The next year my income was a third of that. I've still not gotten back any of the money which was withheld from me two years ago. Yet, the government demanded that I pay OUT OF MY POCKET for the new taxes, including the property tax. I was one of the lucky few who had money in the bank, no loans and no family so I paid up. The majority of SMEs who saw their turnover shrink to crap due to the austerity have loans to pay, families to feed so excuse them if they don't pay their taxes because they preferred to not lose their 30-year-old 2-bedroom apartment with no central heating and not wanting to leave their children hungry. Some couldn't even do that and these are the exact people who will get up to 800KWh of electricity per two months for free, for a total cost to the state of 2 million Euros. Meanwhile your country makes 105 million Euros per year from the
Slashdot Mirror
Meanwhile: I have to pay for my own hospital plan because in case I get sick I have to notify the public insurance carrier 15 days in advance of emergency surgery (no kidding!) or 3-4 months before booking an appointment with a doctor. I have to get an additional, expensive pension plan on top of the 350 Euros per month I am currently paying as mandatory social security because there will be no money when I'm 67 years old or have worked 40+ years to get the minimum pension of 700 Euros (nominal; actual payment after taxes and mandatory social security is around 480 Euros). I also need to set aside money to get the kids I'm planning on having to a private school because there are no teachers (not even substitutes) half of the time in the public schools.
If you are wondering why people tax evade you have to first ask the questions: 1. how much does the state take in taxes and 2. what does the state offer for the money it takes from its citizens? If the answers are "most of your money" and "not that much at all" respectively it doesn't take a genius to see why you get an endemic tax evasion for free.
Anyway. After three years of battling the system I gave up and moved away. My last tax filing in Greece was 2014 for my income in 2013. I am owed a 13,000 Euro tax return since August 10th, 2014. Of course it's NOT credited. And we're talking about money I have paid as a tax downpayment to the state since August 2013. They hold my money hostage for 2 years and they won't give it to me. Also, don't make the mistake of asking whether there's an interest rate for those two years. Don't be silly. There's not! Adding insult to injury I'm still a Greek tax citizen which means I get to pay taxes for the dividends I'm paid from my company abroad. Don't be ridiculous, of course they are NOT offset by the money the Greek state owes me! I have so far paid another 40+ thousand Euro taxes in these two years where the Greek state owes me the 13,000 Euro tax return.
I understand all this sounds alien to you. Why so much taxation, why no services in return, why the state isn't punctual in paying back. Beats me, brothers and sisters. I have concluded that one must be outright insane to try and do business if they're born in Greece.
Real estate is the typical investment in underdeveloped economies. In developed economies you place your money in stocks and bonds, having a more than fair chance of getting a ROI equal or higher than the inflation rate. So, if a German or American has about $50,000 they'll place them there. In Greece the inflation was at 20% until the early 90s whereas bond interest rates were at 14% and the stock market was anemic (even worse than it is today). In other words, placing your money on stocks and bonds would *lose* you money.
Therefore Greeks placed their money in (old) houses or would build their own with the combined effort of three or more generations of a family. I don't think that an average placement of $25,000 per person, over a lifetime of work, in brick and mortar makes that person "rich" by any standard.
The problem reading the statistics is that the valuation of the houses is based on Greece's skewed "objective valuation" system. This system assigns a price per square meter of property for each area, however this valuation is not grounded on market values. It's arbitrary and usually 5x-20x higher than the market value. For example, the "objective valuation" of a derelict house I've inherited from my father in a mountain village near Kalamata is 250 Euros per square meter when the market value is less than 100, for well-maintained property (as I said, mine is falling apart). I've heard of worse cases, e.g. a 1000 square meter field in a mountain village which only connect to the nearest villages via a single dirt road was 180,000 Euros. Market value? About 5,000 Euros.
The idea behind this irrational system is that the presumptive income is based on the "objective valuation" system which has a high tax-free bracket (I think it's currently at 140,000 Euros). If the market valuations were used, very few people would have to pay taxes based on the presumptive income derived from their property.
So, yes, on paper Greeks are extremely wealthy because of the typical Greek solution of cooking up the numbers towards a desired effect and not towards objectivity. In reality Germans have more (neither far more, nor far less) personal wealth and in immediately liquefiable assets. I'm stuck with a derelict house I inherited from my father, without electricity, and with ever diminishing market value. I still have to pay 600 Euros per annum for property taxes for this house. So, what does this property actually count for? An asset of purely imaginary value 15,000 Euros or an annual liability of 600 Euros?
And a final note: your mass media may want to portray Greeks as tax evaders but that's not quite the truth. Two years ago I paid 85,000 Euros income tax out of 110,000 Euros turnover. That's an effective taxation of 77% thanks to the highest taxation bracket being 43% and having to pay 55% of your taxes as a downpayment for next year. The next year my income was a third of that. I've still not gotten back any of the money which was withheld from me two years ago. Yet, the government demanded that I pay OUT OF MY POCKET for the new taxes, including the property tax. I was one of the lucky few who had money in the bank, no loans and no family so I paid up. The majority of SMEs who saw their turnover shrink to crap due to the austerity have loans to pay, families to feed so excuse them if they don't pay their taxes because they preferred to not lose their 30-year-old 2-bedroom apartment with no central heating and not wanting to leave their children hungry. Some couldn't even do that and these are the exact people who will get up to 800KWh of electricity per two months for free, for a total cost to the state of 2 million Euros. Meanwhile your country makes 105 million Euros per year from the