Recenlty in Greece, the tax on Oil have increase at alarming rates and is causing more and more people to differ to things like fireplaces to heat their homes. In this Article, found in the New York Times, it talks about how Greece is losing money even though the tax is increasing.
"So while the government has collected more than $63 million in new tax revenue, it appears to have lost far more — about $190 million, according to an association of Greek oil suppliers — in revenue from sales taxes on the oil."
I agree with Mr. Topalis that the worst part is not the lack of money, if not the mood that people are in. Greece is experimenting a very hard moment in its economy. However, if Greece wants to overcome the crisis, it will need the support of its people. No matter the increasing of taxes if the dodging is still a problem. That is the reason why Greece is still in debt. According to The Economist, there is an evidence that self-employed people tend to underreport their income. The most ironic thing is that the most egregious behaviour happens higher up the wealth ladder, so ordinary Greeks may be more deserving of Ms. Lagarde's sympathy.
ReplyDeleteThis is still a dynamic I do not fully grasp. For an individual, if you are burdened by debt, cutting your expenses is the best way to climb back to prosperity. It seems however, that this concept does not apply when it comes to governments and economies. Perhaps it is simply because of the vast complexity to which an economy balances over just simply ones checkbook.
ReplyDeleteI really feel bad for the people of Greece. It almost seems like their government is doing everything it can to make the lives of the Greeks miserable. In the article, A lady mentioned that she is now heating her home with electricity instead of oil, which the government has put an extremely high tax on. She then says that the government is talking about raising taxes on electricity as well. This seems to me to be a very cold (no pun intended) move by the Greek government. I hope that the people and the government of Greece figure things out soon. I am worried things will soon get out of hand.
ReplyDeleteThis article really saddens me. The impact it has on the moral of the Greek people is something that will outlast any economic problems. It is shaping their newer generations. This could also effect the economy because of Consumer confidence. If their whole culture of spending changes it may slow economic revival once money gets back into Greece. If I was poor enough to have to use a fire place to heat my home, I would be very reluctant to spend in the future in fear of that happening again.
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