Aside from the questionable spending on two wars for who remembers how many years, the last four and a half years have seen an escalation of spending, social programs and as a result also an increase in federal civilian employees. In fact, federal employment is at an all time high of just over 2 million workers (excluding postal employees).
After decades of expanding popular programs such as Social Security and Medicare along with scores of smaller programs, politicians have gotten religion and figured out that these programs are expensive and that the promises they made must be paid for. Not that they have not been warned for many years what was coming, but after all, austerity is unpopular and unhappy people still vote.
There is a case to me be made that we Americans want all this stuff. We do elect people who make all this possible after all. And as much as we like to talk about freedom and individual responsibility it’s darn convenient to have things like health care and retirement taken care of for you, just ask one of us on Medicare, Social Security and a company pension. The part we don’t like to think about is paying for it.
Then we get to the point where we don’t have sufficient funds to pay for all the promises and we must do one or a combination of two things, implement some austerity (cut the benefits and promises) or increase the money available to pay for them (higher taxes).
Some will argue to trim benefits making them affordable. A few people actually think they paid for what they are receiving, ha! Others want to preserve all the promised benefits and to simply raise taxes…at least on some people.
Greece is our best example of social engineering, decades of promises, generous social benefits, high government employment and high taxes. Greece has learned the hard way that people march in the streets when there is a whisper of austerity and at the same time they find ways to avoid paying taxes that are supposed to fund government promises.
Consider these published facts about Greece and draw your own conclusions as to any parallels to the U.S. if not now, surely in a few years.
It’s estimated that 20 to 30 percent of Greek economy is underground and the government may be losing up to $30 billion a year to tax evasion.
The New York Times reports that many wealthy, high-earning Greeks are not reporting their income. Take a look at the following; is there any wonder why Greeks avoid taxes?
Greeks pay a Value Added Tax (VAT) of 21%. (a giant broad-based sales tax)
Income tax rates range from 15% to 40%. At 30,001 Euros (around $42,000), the rate is 35%, below that the rate is 25% down to 12,000 Euros.
The New York Times reports, “When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had claimed an income of less than $40,000. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all.”
Some of the most aggressive tax evaders, experts say, are the self-employed, a huge pool of people in this country of small businesses.
Greece Social Security
* The employer’s contribution is 28.06% of the salary. The employee’s contribution is 16%.
* A self-employed person makes payments to social security himself.
* The insurance covers pension, unemployment and health care insurance. Greeks get their health care from the state. But, if a patient wants more attention than Greekcare mandates, “Greeks routinely pay doctors cash on the side”
If you were addicted to government promises and paying those kinds of taxes (or expected to pay is perhaps a better way of putting it), wouldn’t you think you were entitled to your entitlements and be inclined to protest austerity and take extraordinary measures to avoid taxes? There seems to be a certain logic here in the way people react to all this and yet there are many experts who believe that somehow the American people will react differently.
Related articles
- Austerity in Greece Meant to Break Workers’ Resistance + Thousands of Greeks Say No to Austerity (dandelionsalad.wordpress.com)
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