Saturday - January 12, 2013

Paying It Off

In other words, anybody with a halfway decent job is paying at, or near, the maximum tax rate. Guess the party’s over in Greece.

Athens passed new tax increases to boost revenue by US$3 billion to keep in line with previous commitments to creditors. The new measures limit family benefits and force the middle class to pay over 40 per cent of their annual salary in taxes.

Greek’s Conservative-led coalition has passed the new tax increases to middle and high-income earners, self-employed and businesses.

The new law increases the amount of income tax paid by those earning more than US$26,000 a year, limits tax benefits for having children, revokes tax breaks for farmers and increases corporate tax to 26 per cent from 20 per cent.

It also increased top income tax rate to 42 per cent from 40 per cent for Greeks earning more than US$56,000 a year, which is the higher-end of middle class average in Greece.

The new law was part of an overall package approved past November in order to qualify Greece for more bailouts in the future. It aims to save Greece up to US$3 billion in 2013.

If the new tax changes would not have been passed, then Greece would not qualify for more bailout money to be transferred and the nation would have fallen short of paying its own bills.

So now that they’re going to tax their people naked to pay their way out of debt, that step towards austerity lets them get even more money lent to them, so that they get deeper in debt. Yeah, that makes sense. Uh huh.

Just last month Greece has received another US$45.5 billion in frozen loans and now with the passage of the new tax bill it is on track to get another US$19.9 billion in the next few months.

But it’s been a free ride over there for ages, and it’s time somebody has to pay the piper

Trying to hold control of the economy at the end of 2012 Greece adopted a 2013 budget that involves 9.4 billion euro of spending cuts, mainly in state wages, pensions and benefits, all of which have already been significantly reduced over the past two years.

Tough austerity measures have also led to a drastic surge of unemployment – in September 2012 it reached a record 26 per cent, which is one of the lowest levels amongst the EU nations.

Oops. Yup, the party’s over.  But I think they meant to write “highest” instead - the EU27 is at 10.7.

Posted by Drew458     on 01/12/2013 at 01:03 PM   
Filed Under: • Economics • EUro-peons •  
• Comments (2) • Trackbacks(0)  Permalink •  

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