Editorial: The vicious cycle of taxes
One does not need any particular knowledge of economics or political insight to realize that excessive taxation is not efficient or…
One does not need any particular knowledge of economics or political insight to realize that excessive taxation is not efficient or that it does not open a path to economic growth. The statement on Monday by Schäuble, namely that raising the VAT in our country is economic nonsense, but that there was no other alternative due to the major income shortfall, merely confirms a self-evident situation.
From the moment that pillars of tax evasion have not been addressed in Greece, the policy of constantly imposing new taxes on those who are already paying with mathematically lead to exhausting their taxpaying ability, which in turn will see a shortfall in revenue. Indicatively, since 2010, the tax collectibility rate is in decline and only about 45% of taxes were collected in 2015. Additionally, this tactic also saw outstanding debts grow to 87 billion euros today, which is about half of the country’s GDP.
Greek society, or rather the productive section that is still alive, is trapped in this vicious cycle of excessive taxation, which such out the life of everything that remains. It is no coincidence that, given the opportunity, businesses will move their registered offices abroad to save on taxes. Likewise anyone capable of finding work outside of Greece is doing the same thing.
The constant political delays, the pinnacle of which was SYRIZA’s proud negotiation, have pushed the economy to its very limits. The new wave of tax burdens that starts tomorrow is the end result of the tragicomedy we have experienced in the past year and a half. The chances of their predictions on fiscal targets following are significant, meaning that this tax raid will not be the last, contrary to government officials.