The top income tax rate is 40% -- which is not too high in itself, about the same as the U.S. However, the 37% tax bracket applies to income of only 30,000 euros! The 27% tax bracket kicks in at a mere 12,000 euros. In the U.S., the 35% rate doesn't kick in until you have an income of $372,951. The 28% rate applies to income of $137,000 for a married couple. You can see the difference between the U.S. system and that of Greece.
Plus, on top of that, Greece has a 21% VAT, recently raised from 19%.
But, here's something I didn't know -- Greece also has a payroll tax of 16% paid by the employee, and an additional 28% paid by the employer! Ouch!
The back of my envelope says that amounts to a 65% marginal tax rate -- on income above 12,000 euros! Not to mention property taxes or other local taxes.
Saturday, May 15, 2010
Greek tax system.
Earlier this week I posted Nathan Lewis's recent article on the Two-Santa Theory, but forgot to highlight his illuminating summary of the Greek tax code:
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And Greece has far too many tax breaks and loopholes for the wealthy to escape through. The tax burden is mostly put on the middle class as it is in America and that is why America is going to fail in the same manner as Greece has.
ReplyDeleteAnd of course America has no real excuse because it is a resource rich country. George W. Bush started the damage and now the ball is rolling down hill and gathering momentum. All the supplyside rhetoric is not going to make a bit of difference and in fact if any of the nonsense is adopted then it's going to accelerate the downward trend. Hopefully the American people understand that and are cautious of being stung twice by the greed of the right.
To The straight goods!: What "nonsense" are you referring to? Sound money, pro-growth fiscal policies, free trade, minimal government interference in private markets? These are the principles of supply-side economics. They are tried and true ingredients of a prosperous economy. So before posting comments, at least have an understanding of the subject you are attempting (however weakly) to criticize.
ReplyDeleteOh, I do have an understanding Bob. Everyone should because it's very easy to see what state the country was in at the end of Bush's reign of terror. As I said, regardless of Obama the ball had already started rolling. Huge tax cuts to the wealthy put us over the edge. That's part of the nonsense and you can submit your other ideas why Bush destroyed our economy if you like. One thing for sure though Bob, we were pretty well screwed before Obama got to take the reins.
ReplyDeleteThere can only be minimal government interference in the private market place if the deck is not stacked against the middle class already. It was and that is the government interference SS'ers always are reluctant to discuss. The people will only put up with it for so long and that brings us back to the situation in Greece. That is why there is a communist resurgence of course. They have been betrayed by selfish and greedy capitalism. Not "capitalism" but "selfish and greedy and out of control capitalism".
And so Bob, if you feel like you want to challenge my understanding of supplyside economics then have at it. We'll see who knows what they are talking about. I'll address what SS really means and you can try to address what you want SS economics to be to disguise it and make it acceptable to a lot of very unhappy people. You will need to pretend that the main agenda is not cutting taxes for the middle class and the poorer class of people but again cutting taxes for the very wealthy. And ya never know, you may fool them again!
Read TWTWW, The Seven Fat Years, and anything from Rueven Brenner and then we'll talk. You clearly need an education on what SSE really is since you obviously believe that GWB was a supply-sider (hint: he wasn't at all). Until then, we'd really both be wasting our time.
ReplyDeleteAlready read Jude's book Bob, and I don't intend on reading any of the crap that Reuven spews. Anyway, it doesn't matter to me if we talk further.
ReplyDeleteI will say though that you have seemed to have forgotten the meaning of the word, Supplyside. That's not a mystery why because now it needs to be rebranded to mean something that will be palatable to the millions of people who were fleeced by W. Tax cuts to the wealthy, or in other words, the supplyside.
Here's how I've got it: W thought that he would once and for all prove out the theory of SS economics so he gave huge tax cuts to the wealthy. Did you forget? So even though you may say that he wasn't a SS'er, he was by his very actions. And lo and behold, he failed and nearly led the country to financial collapse of the whole damn country.
So Bob, no matter what I think SS is, the people who were effected know very well what SS was supposed to be. And I'm telling you Bob, they ain't gonna be forgetting in a hurry. Fact is, RR will be spinning in his grave if the maggots have left any of him to spin.
And for that reason SS ideas are like flogging a dead horse and will remain so for a long time. If I were you I would push for SS change under a new disguise. Say, promising to cut taxes of the demand side too, not just the very wealthy. Find out what those funny people with the tea bags hanging off their hats are up to and run with it. I think they're coming to understand that SS nonsense is the new enemy Bob.
And one more thing Bob: If you redecide to talk about it with me then would you try to be a little more civil about it? Telling me I need an education and telling me I have no understanding of the subject aren't exactly conducive to a good exchange of ideas. It could lead me to start ignoring you before you ignore me! What I'm really saying is that you will have to break with tradition and be a nice capitalist if you want to win friends and influence people. And after all Bob, you sort of need support for your cockmanie ideas from as many people as you can get don't you.
This site needs to beef up the academic links. You could start with Nobel Laureates like Robert Lucas and Ed Prescott's famous study, "Why Do Americans Work So Much More Than Europeans."
ReplyDeletehttp://ideas.repec.org/a/fip/fedmqr/y2004ijulp2-13nv.28no.1.html
Just ask me for more.
Mr. Reynolds--
ReplyDeleteThank you for your comment.
Have posted Prescott's article and will read up on Lucas.
I would love guidance on academic links.
Best,
Sean