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Greece is a good example of what happens with an over-reaching government, high taxes, and expensive social programs. You are joking, right? Greece is a good e

by frossie 16y ago

Greece is a good example of what happens with an over-reaching government, high taxes, and expensive social programs. You are joking, right? Greece is a good example of what happens when the state fails in two of its most important functions: efficient tax collection and an incorruptible civil service.

d2viant 16y ago
I haven't heard this before. How was their tax collection inefficient? Are you referring to tax evasion?
- ramanujan 16y ago
  He's talking about the satellite photo story from a while back in which Greeks had many more (taxable) private pools than were reported to the government. http://boingboing.net/2010/05/04/satellite-photos-cat.html http://boingboing.net/2010/05/04/satellite-photos-cat.html The question though is whether "more efficient tax collection" is really the cure for Greece's ailments. It really boils down to whether you think a centralized government can better allocate your dollars to your benefit, or whether you can. You could certainly make an argument that people would free ride and/or greatly underestimate the benefit that spending 10 cents of each dollar on (say) the military or roads would provide, and this furthermore justifies taking that 10 cents by force as part of the price of membership in a community. However, I personally find it less persuasive to argue that centralized allocation programs will produce greater wealth than distributed ones. A remote government simply doesn't have all the information and can't know your preferences. One thing I find interesting is that many people can come to fairly good agreement on what the problem is (bad economy, low unemployment, etc.) but disagree very dramatically on what the solution should be. frossie is likely a Keynesian and rick888 is probably a Hayekian; in my experience, Keynesianism is in the water supply and the "default belief" for most college graduates, but most entrepreneurs tend to end up Hayekian: http://www.youtube.com/watch?v=d0nERTFo-Sk http://www.youtube.com/watch?v=d0nERTFo-Sk
  - StavrosK 16y ago
    Speaking as a Greek, a centralised government would be far worse at allocating funds simply because it would embezzle a good chunk.
  - frossie 16y ago
    He's talking about the satellite photo story from a while back in which Greeks had many more (taxable) private pools than were reported to the government. I assure you, that is the least of it. The fundamental problem in Greece is, as I said, ineffective tax collection and a corrupt machinery of state. Since people are clearly having trouble understanding what ineffective tax collection actually means, let me explain: the government is unable to tax income or other forms of revenue. There is a huge cash (grey) economy that means that income tax, the primary revenue raising tool for most Western economies, is useless. If you go into a taverna with your family and blow 100 euros on a big meal, the bill will arrive and only cash will be accepted. At the end of a busy night that brought in maybe 2,000 euros, the proprietor will report to the tax authority an income of 200 - hey, slow night, eh. Now I realise this may be a struggle for those of you with a certain kind of politics, but believe me - a lack of an effective income tax is a terrible thing. For starters, the state needs revenues somehow - so since they can't reliably tax income, they have to tax secondary things - which unfortunately are things like fuel tax, and goods taxes that hit the poor much more than the rich. Hence a lot of the social tension that you see in the news. This is why the swimming pools are a big deal. Yes it may sound insane that anybody wants to tax pools - but when the person who owns the beautiful pool in the house by the ocean claims he only earned $10,000 last year, and you are unable to actually bust him on such an atrocious claim, then taxing his easy-to-find pool is the only thing you can do. This is a country than until very recently didn't even have a land registry; yes, the state had no idea who owned a piece of land. The point is that Greece is a bad example to use in a debate of fiscal policy, because it works nothing like you US/UK/{Insert your big Western economy here} people think it does.
    - temphn 16y ago
      If the people don't want to be taxed to pay for state services, then shouldn't the state fire people, stop services, and downsize, just like a business? No startup can point a gun at its customers to force them to give it money. Some startups genuinely do provide a valuable service that people can't or won't pay for. Oftentimes the difference between a viable and nonviable startup is the culture of the people you're selling to (academics are notoriously hard to monetize, while myspacers click on lots of ads). So if Greeks don't want to pay taxes like Brits then the Greek state should be a lot smaller than the British state. Replace as much as possible with user fees and just scale it down. Do you disagree?
- davidu 16y ago
  What tax collection? (And yes, also tax evasion)
_delirium 16y ago
Indeed, if it were merely an issue of the size of the public sector, Greece is totally middle-of-the-road: http://www.americanprogress.org/issues/2010/05/img/greece_graph1.bmp http://www.americanprogress.org/issues/2010/05/img/greece_gr... If anything, it's a bit more free-market than most of Europe, because what regulations exist are not enforced nearly as vigorously as they are in places like Scandinavia or Germany. In Germany, it's pretty hard to ignore building codes and zoning and just build a house, but in Greece people do it all the time, especially outside the major cities--- you just run your own electric line from a neighbor to avoid having to get an official hookup (you settle charges with them privately), hire a local architect and contractor, and you're good to go. Between that and all the small businessmen, it's a surprisingly DIY sort of place, where the government exists but is often ignored.

by frossie 16y ago

d2viant 16y ago

I haven't heard this before. How was their tax collection inefficient? Are you referring to tax evasion?

ramanujan 16y ago
He's talking about the satellite photo story from a while back in which Greeks had many more (taxable) private pools than were reported to the government. http://boingboing.net/2010/05/04/satellite-photos-cat.html http://boingboing.net/2010/05/04/satellite-photos-cat.html The question though is whether "more efficient tax collection" is really the cure for Greece's ailments. It really boils down to whether you think a centralized government can better allocate your dollars to your benefit, or whether you can. You could certainly make an argument that people would free ride and/or greatly underestimate the benefit that spending 10 cents of each dollar on (say) the military or roads would provide, and this furthermore justifies taking that 10 cents by force as part of the price of membership in a community. However, I personally find it less persuasive to argue that centralized allocation programs will produce greater wealth than distributed ones. A remote government simply doesn't have all the information and can't know your preferences. One thing I find interesting is that many people can come to fairly good agreement on what the problem is (bad economy, low unemployment, etc.) but disagree very dramatically on what the solution should be. frossie is likely a Keynesian and rick888 is probably a Hayekian; in my experience, Keynesianism is in the water supply and the "default belief" for most college graduates, but most entrepreneurs tend to end up Hayekian: http://www.youtube.com/watch?v=d0nERTFo-Sk http://www.youtube.com/watch?v=d0nERTFo-Sk
- StavrosK 16y ago
  Speaking as a Greek, a centralised government would be far worse at allocating funds simply because it would embezzle a good chunk.
- frossie 16y ago
  He's talking about the satellite photo story from a while back in which Greeks had many more (taxable) private pools than were reported to the government. I assure you, that is the least of it. The fundamental problem in Greece is, as I said, ineffective tax collection and a corrupt machinery of state. Since people are clearly having trouble understanding what ineffective tax collection actually means, let me explain: the government is unable to tax income or other forms of revenue. There is a huge cash (grey) economy that means that income tax, the primary revenue raising tool for most Western economies, is useless. If you go into a taverna with your family and blow 100 euros on a big meal, the bill will arrive and only cash will be accepted. At the end of a busy night that brought in maybe 2,000 euros, the proprietor will report to the tax authority an income of 200 - hey, slow night, eh. Now I realise this may be a struggle for those of you with a certain kind of politics, but believe me - a lack of an effective income tax is a terrible thing. For starters, the state needs revenues somehow - so since they can't reliably tax income, they have to tax secondary things - which unfortunately are things like fuel tax, and goods taxes that hit the poor much more than the rich. Hence a lot of the social tension that you see in the news. This is why the swimming pools are a big deal. Yes it may sound insane that anybody wants to tax pools - but when the person who owns the beautiful pool in the house by the ocean claims he only earned $10,000 last year, and you are unable to actually bust him on such an atrocious claim, then taxing his easy-to-find pool is the only thing you can do. This is a country than until very recently didn't even have a land registry; yes, the state had no idea who owned a piece of land. The point is that Greece is a bad example to use in a debate of fiscal policy, because it works nothing like you US/UK/{Insert your big Western economy here} people think it does.
  - temphn 16y ago
    If the people don't want to be taxed to pay for state services, then shouldn't the state fire people, stop services, and downsize, just like a business? No startup can point a gun at its customers to force them to give it money. Some startups genuinely do provide a valuable service that people can't or won't pay for. Oftentimes the difference between a viable and nonviable startup is the culture of the people you're selling to (academics are notoriously hard to monetize, while myspacers click on lots of ads). So if Greeks don't want to pay taxes like Brits then the Greek state should be a lot smaller than the British state. Replace as much as possible with user fees and just scale it down. Do you disagree?
davidu 16y ago
What tax collection? (And yes, also tax evasion)

_delirium 16y ago

Indeed, if it were merely an issue of the size of the public sector, Greece is totally middle-of-the-road: http://www.americanprogress.org/issues/2010/05/img/greece_graph1.bmp http://www.americanprogress.org/issues/2010/05/img/greece_gr... If anything, it's a bit more free-market than most of Europe, because what regulations exist are not enforced nearly as vigorously as they are in places like Scandinavia or Germany. In Germany, it's pretty hard to ignore building codes and zoning and just build a house, but in Greece people do it all the time, especially outside the major cities--- you just run your own electric line from a neighbor to avoid having to get an official hookup (you settle charges with them privately), hire a local architect and contractor, and you're good to go. Between that and all the small businessmen, it's a surprisingly DIY sort of place, where the government exists but is often ignored.