Greek Vote Approves a Despised Property Tax

No property taxes there, huh? Must be nice. From what I've read, they also cheat a lot when it comes to paying other taxes. From today's New York Times here.

The Greek Parliament voted late Tuesday in Athens to back a hugely unpopular property tax, one of a series of new austerity measures. The vote could clear the way for a crucial injection of international financing meant to at least temporarily stave off a default on government debt.

The property tax, the first of its type in Greece, would raise 2 billion euros, or $2.7 billion, this year alone, according to government calculations. The question is whether enough Greek people can or will pay the tax to meet those forecasts. . . .

The tax, which will apply to 5.5 million homeowners — or about 80 percent of Greek households — will cost the average family 800 to 1,500 euros (about $1,045 to $2,041) a year, depending on the location and size of their property. With unemployment at 16 percent, and average income only about 26,000 euros, it is unclear how many households will be willing or able to pay. . . .

[Emphasis added.]

From this article:

The cheating is often quite bold. When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had claimed an income of less than $40,000. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all.

Such incomes defy belief, said Ilias Plaskovitis, the general secretary of the Finance Ministry, who has been in charge of revamping the country’s tax laws. “You need more than that to pay your rent in that neighborhood,” he said. . . .

Various studies have concluded that Greece’s shadow economy represented 20 to 30 percent of its gross domestic product. Friedrich Schneider, the chairman of the economics department at Johannes Kepler University of Linz, studies Europe’s shadow economies; he said that Greece’s was at 25 percent last year and estimated that it would rise to 25.2 percent in 2010. For comparison, the United States’ was put at 7.8 percent. . . .

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