Some sort of semi-coherent collage of notes on the Greek situation (1) | 87 comments (87 topical, editorial, 0 hidden)

Re: dealing with the corruption (4.00 / 3)

I know you asked Talos but reading anecdotal reports from the Greeks, even they have racialized and internalized the tax evasion and corruption issue. I know about the history of tax evasion and corruption (for instance, there's a mountainous region of Greece called the Agrafa which means, the Unwritten, and that literally refers to the fact to collect taxes because this huge swath of land was lawless, ungovernable and dangerous). So, going back to the Ottoman days, and a totally unfair tax policy of the Ottomans (based on ethnicity) the tax problem is supposedly ingrained. Couple that with split governments during the early part of the 20th century, wars, juntas, etc., and you don't have an actual market economy or polity established until 1981. Ironically, that's the start of the debt woes. Prior to that, Greece was at 25% debt to GDP for ages.

I don't buy this form of racialization that's been internalized even by Greeks. In the modern world, attitudes can change quickly, and they should have already in Greece. This isn't ingrained by any means (although I do allow that some of this is caused by the many mom-and-pop businesses and VAT, and that a proportion of the population in every country will play these games when in position to).

In order to get to the bottom of this tax evasion question, you'd have to look at the Greek tax code. I don't know much about it but Talos mentioned receipts. I've also read about other Greeks wanting to colelct receipts for taxis, so that they can enumerate on their tax all the taxes paid to VAT, which are then supposedly deductible.

For an American, this seems crazy. With a standard deduction, most Americans do not itemize, and we don't keep receipts either. So, for Greeks there may be an incentive to ask for a receipt from the cabbie, while in New York City, I jump out of the cab, slip a $10 to the cabbie, and off I go.

by Upstate NY on Fri May 14th, 2010 at 10:16:14 AM EST
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Re: dealing with the corruption (4.00 / 3)

I read somewhere that there was a check on swimming pools in gardens around Athens (a taxable item, self-declared) and using google maps satellite pix, it was quickly ascertained that there were thousands of untaxed pools.

You can't be me, I'm taken

by Sven Triloqvist on Fri May 14th, 2010 at 10:34:44 AM EST
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Re: dealing with the corruption (4.00 / 2)

About the tax evasion question again, though, the per capita in Greece is higher than the USA's. As Talos said, it's lower than the eurozone. But, tax evasion is only a measure of the money that should have been paid but wasn't. If your tax rates are lower, you could have a low tax revenue per capita AND a very low rate of tax evasion at the same time.

So, I would tend to look at tax revenue per capita, as the important thing.

by Upstate NY on Fri May 14th, 2010 at 10:44:48 AM EST
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Re: dealing with the corruption (4.00 / 3)

This aerial/sat pictures to find out undeclared swimming pools meme has been popping up regularly as an urban legend in many countries (sunny ones mostly), such as the South of France. It may even be true...

by Bernard (bernard) on Fri May 14th, 2010 at 12:12:55 PM EST
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Re: dealing with the corruption (4.00 / 3)

If you're running a business (even a one-person business, and I recall we've already remarked on the large number of these in Greece), you usually have a VAT account with the tax authorities. In your books, you have an account for VAT collected (paid to you by clients when paying bills) and another for VAT expended (on your investments and expenses).

At the end of the year (or other accounting period according to the type and size of business) the tax authorities may owe you a refund (if you have paid out more VAT than you have received), or, (more probably), you owe them the difference between the outgoing and the incoming.

Of course, just as you need invoices to back up your incoming VAT account, you need receipts for your expenses (to prove what VAT you've paid out). The taxi journeys would need to be necessary to your business, of course. Forgetting to get receipts would just automatically decrease your VAT expended account, with the result that you would pay more VAT than necessary.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri May 14th, 2010 at 10:45:03 AM EST
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Re: dealing with the corruption (4.00 / 9)

A lot of this (and a lot more actually) sort of thing (corruption - tax evasion, bribery, kickbacks, underground (non-taxed)economy, patronage, etc., etc.)goes on in Mexico and many other countries. I strongly suspect it is something that's very difficult to eliminate except via a long-term concerted effort that includes effective legislation, enforcement, education and cultural change. A daunting task to say the least. I don't see how it can be accomplished. Much of this type of corruption is/has become socially acceptable so it's not really carefully hidden (no need to). Trying to eliminate it completely could result in more veiled forms available particularly to the rich and powerful corporations, a la the USA.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears

by Gringo (stargazing camel at aoldotcom) on Fri May 14th, 2010 at 04:41:18 PM EST
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Yes, the US went through a long ... (4.00 / 7)

... clean government movement to get to the point that we had reached by the 1950's - where corruption was of course not eliminated, but where it was not universally expected and tolerated.

Since then, we've been sliding back the other way, since its not something that maintains itself automatically.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri May 14th, 2010 at 05:15:47 PM EST
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Re: Yes, the US went through a long ... (4.00 / 2)

The good old days of Tammany Hall.

by Upstate NY on Sat May 15th, 2010 at 12:09:46 AM EST
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Re: Yes, the US went through a long ... (4.00 / 3)

An excellent example ... the demise of Tammany Hall in the 1960's was a victory by the clean government movement, though not as big as establishing a career civil service in the Federal government.

By the 1950's, Tammany Hall was notorious and seen as an aberration, but when it got its start in the 1790's, it was the norm ... just one political machine among many, looking out for the interests of its own as the other political machines looked out for the interests of their own, the urbanization of the pre-Civil War fraternal organizations that looked after civic affairs in many a small town and representative of the Jacksonian ideal of patronage politics.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sat May 15th, 2010 at 01:06:58 PM EST
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Re: dealing with the corruption (4.00 / 9)

As someone living in another region with entrenched corruption (or perhaps it's the same region, from Italy through the Balkans to ex-Soviet areas?) I'm pessimistic on this front. talos writes that "circus of corruption is not really open to anyone", but it's still a majority. And a majority is a hypocrite about it: I could list all day the examples of acquaintances who all proudly employ their small tricks (behind the back of the state, employer, customers), and at the same time curse "politicians" who do the same kind of tricks "on the back of decent people". These attitudes have their root in the state-subject relationship of several preceding dictatorships [in my region, when the phenomenon is noted, usually only the last -- communist -- dictatorship is blamed...]. But people won't seize democracy, they continue with their small tricks and vote for big tricksters in elections.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Sat May 15th, 2010 at 06:10:56 AM EST
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Re: dealing with the corruption (4.00 / 7)

Also from the diary:

This is a scheme of social legitimation of corruption through its apparent democratization. It starts from not issuing receipts and having two prices for services (i.e. plumbers: 100 Euro with a receit, 70 without), to doctors demanding extra money for surgery in public hospitals, to bribing public hospital boards to not operate or not buy expensive diagnostic machines so as to increase demand for access to private diagnostic centers, to public employees receiving a percentage of the supply costs in order to select the "right" supplier, to paying prefecture employees to turn a blind eye to, often vast, construction or planning illegalities (such as building villas in burnt forest areas) or simply to hurry-up procedures that are intentionally delayed so that one is forced to bribe the official to finish up various procedures (i.e. permits for connecting new buildings to the power grid) in a reasonable time frame. The list goes on ad infinitum. The many faces of Greek corruption would require terrabytes of just to list and years to document...

Ah, how familiar, unfortunately. Just recently:

An acquaintance of mine tried to get a drivers license for half a year. Right before the first exam, the instructor told him plainly that he should forget about passing without giving the instructor (him) his due. My acquaintance flat-out refused, and when he passed the theory exam without problems, it seemed the instructor was bluffing. However, then came the practice test. He failed three times. Even when there was another instructor in the car and no problems were noted during the test, the test result document noted failure. Finally my acquaintance asked the first instructor how much it would cost him, to which he replied, "you should have asked that the first time", then named the sum. (Which my acquaintance final paid, to my anger.)
For craftsmen in my town, the two prices for services mentioned by talos are a norm. In the past month a plumber was giving me bad looks for asking for a bill. And this month a carpenter wasn't troubled by me witnessing as he gave a neighbour a bill for a third or fourth of his services only.

I was (am?) a bit of an outsider to notice the language of corruption in earlier times. And I am still unsure about... doctors. In both the media and private discussions, everyone tells me that giving some money in a briefcase or expensive gifts to (public health service) doctors is endemic. But I have never witnessed it, and never paid or was asked to pay. On the other hand, I have been rarely treated by doctors with kindness...

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Sat May 15th, 2010 at 06:36:44 AM EST
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Re: dealing with the corruption (4.00 / 3)

In Sweden, cash gifts are pretty much unheard of when it comes to driving licenses or doctors appointments. If it happens it would be someone buying a license despite failing the tests or buying a prescription for drugs despite not having the illness in question. Ie you do not pay for them doing their job, but for them to break the rules. And I would set the risk of getting reported for attempted bribe as higher then the chance of getting license/drugs.

On the other hand, cheating with taxes when it comes to contractors is fairly common, and one of the main arguments behind the maid deduction the current government introduced was to move black market cleaning to the white market.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sat May 15th, 2010 at 03:56:17 PM EST
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Re: dealing with the corruption (4.00 / 3)

These attitudes have their root in the state-subject relationship of several preceding dictatorships [in my region, when the phenomenon is noted, usually only the last -- communist -- dictatorship is blamed...]

In Spain, nobody blames Franco for this. Or anyone for that matter. It's just a part of life.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Carrie (migeru at eurotrib dot com) on Sat May 15th, 2010 at 07:01:34 AM EST
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Re: dealing with the corruption (4.00 / 8)

Trying to eliminate it completely could result in more veiled forms available particularly to the rich and powerful corporations, a la the USA.

I suspect the drive to stamp out "corruption" basically makes illegal the kinds of patronage available to the poor or poorly connected, while leaving intact the political economy network of the well-connected. Old boys' networks, university alumni associations, and the like, are acceptable forms of what, when observed in other countries or in poorer social strata is called "corruption". Every so often, a member of the elite will be ritually punished for corruption as a way to hide the fact that corruption by another name is still rampant among the elite.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Carrie (migeru at eurotrib dot com) on Sat May 15th, 2010 at 07:09:23 AM EST
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Re: dealing with the corruption (none / 1)

I mean, which part of corruption - tax evasion, bribery, kickbacks, underground (non-taxed)economy, patronage, etc., etc is not found in the USA?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Carrie (migeru at eurotrib dot com) on Sat May 15th, 2010 at 07:25:58 AM EST
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Re: dealing with the corruption (4.00 / 2)

Well, they all are. The point is that in the USA participants in corrupt activitiesgenerally have to be more discrete about it and the real opportunities for gain are pretty much restricted to those with some sort of power, economic or political. Those who "flaunt the law" stand a reasonable chance of being called out. I know some seemingly have the ability to get away with murder, but even the mighty eventually fall if they play the game too loosely and for too long.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears

by Gringo (stargazing camel at aoldotcom) on Sat May 15th, 2010 at 01:24:11 PM EST
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Re: dealing with the corruption (4.00 / 7)

In the Middle East you pay bakshis to civil servants when they have made decisions that you find favourable. Which is, of course, corruption. In the West, you award "consultancies" to civil servants when they have made decisions that you find favourable. This is entirely legal, above-board and counted as part of the gross domestic product.

Snark aside, there is little doubt that society works better for (almost) everyone when you don't have to pay kickbacks to junior civil servants like police officers and doctors simply for doing their jobs. There is also little doubt that it does nothing to deter the corruption of senior civil servants, including politicians. It just makes it slightly more sophisticated.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat May 15th, 2010 at 07:38:37 AM EST
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Re: dealing with the corruption (4.00 / 4)

I think that is letting the rampant corruption of the US civil service off the hook. Yes, of course there are hypocrites who loudly condemn one form of corruption that they are not accustomed to and silently but ferociously defend the forms of corruption that they directly participate in ...

... however, although we will never "stamp out corruption" so long as its human beings in position of authority, it is possible to fight it. The problem is that it needs a political movement to drive the process to the point of institutionalizing it, and then the institutions have to be defended from being undermined on a piecemeal basis. While political movements come and go, and some are effective enough at their peak to get improved institutions established, the long boring task of defending against piecemeal undermining is not something that movements seem to be very good at.

I would say "this is similar to the history of financial system regulation and de-regulation", except in the US they are two facets of the same history, so the similarities are due to the common history.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sat May 15th, 2010 at 01:14:25 PM EST
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Re: dealing with the corruption (4.00 / 3)

In the USA, they are getting rid of diversity admissions in the universities. Meanwhile, George Bush III graduates from Yale.

by Upstate NY on Sat May 15th, 2010 at 12:52:51 PM EST
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Re: dealing with the corruption (4.00 / 3)

Yes, I think much of what we call "corruption" in the US is likely illegal or quasi illegal in other countries also, but it's often no more than low level bribery just to get someone to do their job. We "participate" all the time when we pay a Telmex worker to move a line rather than wait the prescribed six months, or pay a CFE employee to repair a trunk electrical connection rather than do without electricity for three days. We consider it money well spent given the circumstances, and we also understand that given the low salaries paid workers by the government it's almost a necessity for them to supplement their income this way.

The more insidious forms of corruption are when, for example, town mayors, senators or presidents regularly steal enough tax money through elaborate fraud schemes to enrich not only themselves but also their extended families and friends for generations. This type of corruption we have in the USA also, but I would argue that violations of the public trust are not as pervasive or as profitable in the US as in some other countries, particularly at the federal level. I have a sneaking suspicion that more goes on at the local and state levels due to the lack of oversight. We had several technical employee in our county a year ago who managed to steal $9 million by manipulating computer records and contracts. They did get caught, but much of the money may have ended up in India and the County Executive and several others lost their jobs. I've just read this article about the matter and it pretty much corroborates what's been said about corruption and lack of oversight in our local government. One could see it coming.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears

by Gringo (stargazing camel at aoldotcom) on Sat May 15th, 2010 at 10:56:55 PM EST
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Re: dealing with the corruption (none / 1)

Corruption in Spain's local government is endemic.

Since you can read Spanish, you'll love this one. I'd say there is an even chance this woman could become Spain's prime minister within 6 years <shudder>.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Carrie (migeru at eurotrib dot com) on Sun May 16th, 2010 at 04:50:16 AM EST
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Re: dealing with the corruption (none / 0)

Corruption in Spain's local government is endemic.

by Carrie (migeru at eurotrib dot com) on Sun May 16th, 2010 at 04:51:36 AM EST
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Re: dealing with the corruption (none / 0)

....could become Spain's prime minister within 6 years

Computerized voice:

Erase the thought! Erase the thought! Eeeee raze thaaat thddkgjkjsldkkdf

Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Mon May 17th, 2010 at 05:20:15 PM EST
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Some sort of semi-coherent collage of notes on the Greek situation (1) | 87 comments (87 topical, 0 editorial, 0 hidden)