Friday, October 14, 2011

Greek Bailout Part 2

I mentioned that Greece might be able to help itself by cutting import and export taxes or by devaluing its currency (if it were allowed to) and I wake up to find that instead they're increasing internal taxes. This is a short-term solution and not a good one for any country, for Greece it's a joke.

Allegedly tax avoidance/evasion is endemic as such instead of people not paying 20% they'll not be paying 21% instead. To counter this a new property tax will be collected through electricity bills a difficult thing to avoid for property owners. Don't pay the tax on the bill and the power is cut off.

How many will choose to have the power removed and to cook and light their properties with fire? How many businesses that have to use power will simply up and move out of the country? How many illegal splices will be run off the mains cable and the investigators intimidated (or bribed) into ignoring them?

No business is going to start up knowing they're going to facing this tax. No business is going to hire new workers with this overhead.

Greece is just digging a deeper hole for itself.