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Friday, March 6, 2015

A "Tax Corps" Instead Of A "Peace Corps"!

On March 2, 1961, President Kennedy, in only his 3rd month as President, established by Executive Order the Peace Corps whose mission was defined as follows:

"To promote world peace and friendship through a Peace Corps, which shall make available to interested countries and areas men and women of the United States qualified for service abroad and willing to serve, under conditions of hardship if necessary, to help the peoples of such countries and areas in meeting their needs for trained manpower".

FinMin Yanis Varoufakis has announced that he will hire part-timers to help in the campaign against tax evasion. One could call them the "Tax Corps" and define its mission as follows:

"To promote individual responsibilty as well as solidarity through a Tax Corps of men and women qualified for service to the country by helping to promote the volunatry payment of proper taxes on the part of Greeks".

The twitter world has made quite a bit of fun of this idea today. Socalled 'undercover agents' (possibly even including tourists) were alleged to go after tax evaders in James Bond style. I think they are mistaken.

Four priority areas come to mind immediately when I think about such a Tax Force and I have written about this before (here and here):

1. Anonymous offshore companies doing business in Greece.
2. Recipients of EU subsidies.
3. Owners of offshore banking accounts (Lagarde list, etc.).
4. Private individuals with major foreign bank transfers.

The Tax Corps could not be expected to be tax experts. They would be like the scattergun which shoots into the forest. Wherever the scattergun bullets scratch a tree, the professionals follow-up with a shotgun.

Think of 1.000 clever young people who could be trained within a few weeks to work through a questionnaire which allows them to make a judgment whether professional follow-up is appropriate or not. After training, give them lists of names they should work on and expect them to make one personal interview per day. That would make 1.000 personal interviews per day. Or about 20.000 interviews per month. Or about 240.000 interviews per year...

One reader of my blog wrote the following comment: "You would find recruitment of young Greeks very difficult. They would be pariahs even in their own families. They would 'work against Greeks' for the 'banksters'".

True, this could happen. However, everyone should be reminded that you really can't consider yourself a proud nation if you don't take pride in performing civic duties. Have the cake or eat it, but you can't have both!

27 comments:

  1. If it should be really difficult to find Greeks, either 1.000 oder 20.000, who need to the money and who are proud to help the Greek society collecting the money reuired to pay the social reforms syriza promised to implement, than
    - the unemployment and poorness in Greece can't be that ugly and
    - the reformability of Greee to getting a modern and more socially fair society must be very small.

    That idea seems to be the first good idea since quite some weeks coming aut of Greece.

    Roger

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  2. That phrase about the cake is an invention of retired bankers ;)

    FM Varoufakis certainly would be pleased to prove you that for the new Greek state this is no longer valid o_O

    H.Trickler

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  3. Are they going to catch those megalo-doctors with the undercover tourists? Hahaha.

    I would say, they should try whatever they can -provided it is legal-, but they will be judged by the results. How greek society and Syriza's voters react is a totally different story. They will see on TV a plumber, with 2 kids, going to the court for not issuing a receipt for a 200 euros worth of work or getting a 10k fine and all hell will break loose.

    Also, you don't seem to understand one thing: for Greeks civic duty is NOT paying your taxes. So helping catch tax evaders, as long as they are not the so-called oligarchs, is against your civic duties.

    Finally, in the USA there is way less tax evasion than Greece. One reason is that it is considered a civic duty. The other is enforcement. If you screw up you will pay dearly and nobody will care. Is Greece ready for the enforcement part or everybody will say, you should first catch all the megalo-doctors, oligarchs, megalo-lawyers and then you go after the small-time tavernas, plumbers etc?

    Peace.

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    Replies
    1. You must have missed that the plumbers & Co. were not on my list of 4 priority categories.

      Delete
  4. It is a brilliant idea, but not when Greek people, without any knowledge and expertise, will be asked and employed for this Task.
    The title of this post, including the first paragraphs, made me really enthusiastic. Then it stopped. Tsipras is not Kennedy.

    I consider it as a must that experts from Europe are leading this project, with people who have real knowledge, and discipline, who can organize, and administrate. But that is not what this government wants, because it smells like "Troika".

    What is another problem is the bureaucracy in Greece: it is an extremely delaying factor, there is no time for delays.

    Not any working solution is left. All is going to a dramatical end. And it is up to time to decide what that end will be: bankruptcy, grexit, coup, new elections, or...... common sense that takes over Greece, via an even stronger Troika.

    Europe has to stay strong now, with a no, nein, oxi, nee, because without a mentality change never will ever change in Greece. I am, and all Europeans are, fed up with bleeding for the Greeks.

    The same story as with the addicted child and the parent: stopping offering, borrowing money, saying "no!" to the addicted spoiled child that does not want to grow up and take own responsibilities, is creating at least a chance for a change.

    In case of going on with borrowing money, the child will be lost anyway.
    The same counts for Greece, as one of Europe's children.
    Europe is a parent, and if Greece wants to rule the parent, with manipulations and faked love, it is time for a waking up for Europe and open the door for the child, that creates problems for all other children. It must go. To learn its lessons somewhere else.
    The door is open, though. Open for the new one, understanding finally what the parent really meant.

    ReplyDelete
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    1. Europe is not a parent at all. Your ideas are kooky. Europe is an economic mess, and the German idiots have no strategy worth talking about to solve it.

      Greece is a small country, with a proud history (unlike the Germans) and a weak economy. That is all anyone needs to know. The solutions are not short-term, are not simple, and no government is able to deliver economic prosperity in years let alone in weeks, as you seem to think.

      Delete
  5. This whole idea is bogus of course.

    How many of these students, housewives, pensioneers and tourists (how many tourists stay for two months?) will not be tempted to ask for a bribe (a free lunch at least) in such situations - in order not to report any sign of tax evasion.

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    1. Yes, that's the risk. I would send out people in pairs. My sense is that the younger generation which hopes passionately that SYRIZA will clean out the augean stables of Greece are going to be VERY difficult to be bribed. It's difficult to corrupt firm believers!

      Delete
    2. Klaus, as an experienced banker you must know that in order to be 1000% sure you need at least three persons in continually changing groups.

      Only two of them as a team will much too fast find an agreement to share bribes O__o

      H.Trickler

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  6. Found an article in "Die Zeit" about this:
    Varoufakis macht Hausfrauen zu Steuerspitzeln / Varoufakis plan: Greek housewives volunteering as a tax spy.
    The article is written in German but easy to translate (basically) via https://translate.google.com/

    http://www.welt.de/wirtschaft/article138154183/Varoufakis-macht-Hausfrauen-zu-Steuerspitzeln.html

    My comment: IF this plan will be realized then nobody can trust the neighbor anymore. This smells finally like the policy in the former communist states of Central and Eastern Europe, generally the Soviet Union and the countries of the Warsaw Pact.)

    ~

    Also interesting today is news from Netherlands:
    A group of authors and professors want a parliamentary inquiry about the introduction of the euro (officially in 2002). They started a civil initiative: https://www.peuro.nl/

    Among others Thierry Baudet, Jort Kelder and Arjo Klamer support the plea. They call the introduction of the euro is one of the most significant political decisions in Dutch history. "It still amazes us how it was possible that such a drastic decision with so little critical debate coincided."

    The Dutch people can sign the initiative on the website. Needed are 40.000 signatures. When writing this the number is: 3.903
    In a half hour thousands have joined. Of course I signed as well.

    ReplyDelete
    Replies
    1. There are many news in the Internet describing this fancy fart from Varoufakis.

      Your link regarding peuro.nl is very interesting. No doubt it soon will have the 40K signatures, but what then?

      H.Trickler

      Delete
  7. I used to respect Varoufakis. Granted, for the past five years he's been writing only about how Europe can transfer funds to Greece indirectly (by having the ECB buy bonds of the European Investment Bank etc etc), rather than about how Greece can get funds through foreign investment or through export growth. He was at least an economist that grasped monetary arrangements, and that was commendable.

    Now however he has been exposed as a particularly poor politician. Such suggestions such as his undercover tax agents are embarrassing. Get your act together, Yannis.

    At least Syriza finally seems to recognize that tax evasion is primarily done by small enterprises and professionals. And yet it is these small enterprises and professionals that Syriza vowed to help in it's electoral campaign.

    Unfortunately, Syriza displays the common fetishes of left-wing politics: an obsession for redistribution of income (rather than a desire to create new income), an orientation towards the public-sector, and a dislike of big business (and big capital).

    All that would be entertaining if the current situation wasn't so dire. As it is the economy is heading back for recession, the government is running out of money, the banks's only source of liquidity is the ECB (through the Bank of Greece) and they need more and more of it, while their solvency is ever questionable since problematic loans remain unaddressed.

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  8. Can the israelian experience work in Greece as well?
    http://www.bloombergview.com/articles/2015-02-24/what-greece-can-learn-from-israel-about-tax-cheats

    By the way I dont think foreigners can repair the tax payment system, it has to be done by Greeks. If foreigners try to reform that sector it will always seen as imperialistic actions that is worth rebelling against.

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  9. These "reform" proposals are only smoke screens.

    In this interesting article in the Swiss leftist Wochenzeitung (unfortunately only in German) Varoufakis discloses that he really has far more radical marxist goals - to overthrow European capitalism and the ghastly euro zone and to undermine the EU - but considers this to be too dangerous at the moment:

    https://www.woz.ch/1509/yanis-varoufakis/rettet-den-kapitalismus

    Beware of this dangerous man!

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    1. European capitalism is in such a mess that it does not need anyone to destroy it, marxist or otherwise. As I cannot read German, I can only assume that Varoufakis is telling you about the terrible state of European economies, and the eurozone especially, and that these need to be completely rethought.

      He has the backing of most of the world's economists in that.

      Delete
    2. This publication seems to be based on a "lecture originally delivered at the 6th Subversive Festival in Zagreb in 2013"

      Subversive!!

      A very similar text in English:
      http://www.theguardian.com/news/2015/feb/18/yanis-varoufakis-how-i-became-an-erratic-marxist

      FM Varoufakis obviously plays with marked cards.
      But facts will be decisive by end of March 2015!

      H.Trickler

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    3. Is this Varoufakis article real or is it a fake? If it is real, then this is a scandal and it will in my opinion be hopeless, if not counterproductive, to try and cooperate with him.

      Delete
    4. @ Anonymous at 10.17
      This, I believe, is the original version of the article.

      http://yanisvaroufakis.eu/2013/12/10/confessions-of-an-erratic-marxist-in-the-midst-of-a-repugnant-european-crisis/

      Delete
    5. Thank you for the posted article....

      Quite Honestly, it is a great article. I am not quite sure how his thoughts will affect ongoing negotiations or how he may affect his counter parts. Truth be said with such pressure on us, the point has come where the pressure cooker is about to explode. If it is bad or worse for us of 2 evils so be it.

      V

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  10. Believe me, it’s not a fake. I have followed Varoufakis' blog since the beginning, and his communist agenda shines through many times, particularly when he has the ”right” audience, like on leftist radiostations or on the Subversive Festival, which by the way had Alexis Tsipras as ”Notable guest”. Interestingly in Wochenzeitung Varoufakis also wrights about the need to disguise his real identity as a marxist in order to be accepted by the high society.

    Moreover, Syriza as a whole is permeated with communist intentions. The dislike of big business comes not by chance. The ”party” has sometimes been described as just a populist leftist movement, which would rapidly transform itself though a ”kolotoumba” into some kind of centre-left social democracy with Tsipras as a new Andreas Papandreou or even a Greek Tony Blair. (Of course he might resemble Blair when it comes to the youthful appearance, but Blair's English was far better than the Greek Tsipras speaks.)

    There is no way such u-turn could happen. If you look at who has crept into the Greek government and parliament under the disguise of populism, you see quite a number of high-ranking hard-core communists with a long background in KKE and/or KNE (the Communist Youth of Greece).

    In the Greek cabinet for instance Balafas, Chountis, Dragasakis, Lafazanis, Skourletis, Tsipras, Voutsis, Kotzias, people with important portfolios. There are even more MP’s of course, Akriotis, Ammanatidou, Charalampidou, Georgopoulou-Saltari, Kamateros, Karasarlidou, Lapavitsas ….

    I am also curious to know which of the ”world’s economists”, outside of the marxist camp, want to overthrow capitalism.

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    1. Thanks for all this (very useful) information. For me, who does not live in Greece, this is interesting to know. I suppose, that many, like me, took him for some kind of leftist social democrat at first, and, as a consequence, were somewhat surprised by the way he behaved.Unfortunately all this does not bode well for the future of Greece, I am afraid.

      Delete
    2. This is not factually correct. The Syriza government is social democrat, but well to the left. Similar to the Labour Party in the UK before Blair turned it into a neoliberal party.

      Since the Syriza party has many political parties forming it, there are some from the far left and the communist party. few of these are in the government ;; the main exception being Kotzias. This appointment was actually a stroke of genius, as his relations with Russia are very strong. As a last resort, Greece may turn there.

      AS for the list of people claimed here to be communist, this is just right wing rubbish.

      And the answer to your question of how many of the world's economists want to change capitalism, the answer is the great majority because things are going very badly indeed. A new approach which is production centred and people centred is called for, as opposed to neoliberal nonsense that has led to global banking catastrophe and economic depression.

      Delete
    3. A very manipulative answer. I did NOT ask for economists who want to "change" capitalism, but who want to "overthrow" - destroy, end, bring about the downfall of - capitalism.

      Delete
  11. I think I should point out that the major difference between Varoufakis' proposal and what I have outlined above is that there is nothing 'undercover' in my proposal. I am not talking about 'spying' on people. I am talking about making official appointments for fact-finding interviews, for completing a checklist. And, most importantly, I am talking about 4 principal categories where the vast majority of Greeks should feel supportive that they are being looked into.

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    1. Exactly.

      Focus on that core and get something even one damn inditment.

      I like the IRS receipt tax evasion idea. I really do not understand the narrowmindedness behind the idea. To be honest if this was real and it was offered in a parttime manner i would do the job for free. Plus i loved the idea from the two German MP's fromt he social demacracy party, about rebating German tourists afer collecting receipts in Greece. Both ideas are foward thinking and "out of the box" which no narrow minded conservative can comprehend.

      The checks on society of businesses to cut receipts though is small change in comparison to the 4 points Mr. Kastner mentions. This idea if it works would help the mentality of receipt issuance and also help increase real GDP while help collect alittle more tax. But the big money is int he 4 points.

      To be honest if we are uncapable of nailing even one damn person from the LISTA LAGARDE whether in the governement nor the next, we are as we say in Greece, "deserve our fate...."

      V

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  12. Wow, Varoufakis is already out there with a new idea: referendum or new elections. He probably realises that there will be not much support for his "reforms" tomorrow.

    The question is, will Greece even have the time (or rather the money) to arrange either a referendum or snap elections? And what could possibly be gained that way?

    Referendum:
    1. Yes for the Euro + Troika-supervised reforms vs. 2. Yes for the Drachma + even worse austerity. The voters are between a rock and a hard place.

    If 1. how would Tsipras go on from there?
    If 2. how would Tsipras go on from there?

    Snap elections:
    Probably Syria wins again. Tsipras is back where he is now, although the economic situation is worse than now after weeks of campaigning. Grexit even more unavoidable.

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  13. Yes it's a wonderful idea. I don't think the EU funds could be handled by Greek laymen but with the hands-on help of EU's OLAF they could be educated. How about all the young people studying accounting and economy taking a sabbatical year, it's going to be a long time before they are needed on the private job market. The critical question would be who do we go for? The politicians have immunity for everything. The oligarchs do not have any assets in Greece, and even if you could get a million EUR from each of the top ten it would only net you EUR 10 MILLION. Then there are the one million self-employed, if you could get EUR 10.000,- out of each it would net you 10 BILLION. Oh sorry, they are voters.
    Lennard

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