Greek Referendum Poll

[Razgovory]

I recently heard that the US has higher rates of tax evasion then Greece.  Could this be true?

[viper37]

I recently heard that the US has higher rates of tax evasion then Greece.  Could this be true?

https://en.wikipedia.org/wiki/Tax_evasion_in_the_United_States
A more recent study estimates the 2008 tax gap in the range of $450 to $500 billion, and unreported income to be approximately $2 trillion.[9] Thus, 18 to 19 percent of total reportable income is not properly reported to the IRS.

https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_Greece
The OECD estimated in August 2009 that the size of the Greek grey market to be around €65bn (equal to 25% of GDP), resulting each year in €20bn of unpaid taxes.[12] This was in comparison almost twice as big as the German black market (estimated to 15% of GDP).[13] Data for 2012[14] place the Greek "black market" at 24.3% of GDP, compared with 28.6% for Estonia, 26.5% for Latvia, 21.6% for Italy, 17.1% for Belgium and 13.5% for Germany.

Hard to tell, but unless we know exactly what they were comparing and how they arrived at this assertion, I don't really know.

Say, do they count as tax evasion a corporation that bases its HQ in a US state with low or no corporate income tax?

[viper37]

Nor is it on the frontier of anything threatening to Europe, save through Turkey.

well, it's the reason they were fastracked into the Eurozone.

[Admiral Yi]

Say, do they count as tax evasion a corporation that bases its HQ in a US state with low or no corporate income tax?

No.

[Razgovory]

Neat.  The amount of lost revenue from tax evasion in the US for one year could pay off the entire Greek debt!  We could go a long way into reducing deficit spending if we just pumped up the IRS some more.  With that amount of money being lost it seems deeply irresponsible to cut funding to the IRS.

[Monoriu]

Neat.  The amount of lost revenue from tax evasion in the US for one year could pay off the entire Greek debt!  We could go a long way into reducing deficit spending if we just pumped up the IRS some more.  With that amount of money being lost it seems deeply irresponsible to cut funding to the IRS.

But the law of diminishing return will kick in at some point.  You can hire millions of IRS agents, but at some point, the marginal taxes collected will be less than the salaries and overhead of the additional agents. 

[jimmy olsen]

How is it hypocrisy? Germany was smack in the middle of Europe, devastated, and half-occupied by Stalin and his German cronies. The forward line had to be rebuilt ASAP, and not even France wanted Soviet communists knocking on its borders.

Greece... well, is not Germany; its current plight is largely self-inflicted through decades of shoveling problems forward. Nor is it on the frontier of anything threatening to Europe, save through Turkey.

Germany's problems were self inflicted

[Martinus]

How is it hypocrisy? Germany was smack in the middle of Europe, devastated, and half-occupied by Stalin and his German cronies. The forward line had to be rebuilt ASAP, and not even France wanted Soviet communists knocking on its borders.

Greece... well, is not Germany; its current plight is largely self-inflicted through decades of shoveling problems forward. Nor is it on the frontier of anything threatening to Europe, save through Turkey.

[Martinus]

How is it hypocrisy? Germany was smack in the middle of Europe, devastated, and half-occupied by Stalin and his German cronies. The forward line had to be rebuilt ASAP, and not even France wanted Soviet communists knocking on its borders.

Greece... well, is not Germany; its current plight is largely self-inflicted through decades of shoveling problems forward. Nor is it on the frontier of anything threatening to Europe, save through Turkey.

Germany's problems were self inflicted

Maybe Germany was blameless in the same way men in the seduction community are not pathetic assholes?

[Zanza]

Why is this between Germany and Greece anyway? The other seventeen countries (or more for the IMF part) don't matter? Even if Germany forgave its entire share of Greek debt, Greece would still have something like 140% of GDP in debt left. I wish Merkel would just unilaterally declare that we forgive half of it or so, just to see the other cowards that hide behind us squirm.
If the only right thing to do is Greek debt forgiveness, should not the other countries now at this extreme point act even without Germany and maybe shame it to follow?

By the way the debt Greece has to Germany (and our share of EFSF) is almost interest free and the principal must only be repaid very slowly over decades. That debt is not what hurts Greece at this moment.

[Zanza]

After the war ended in 1945, Germany's debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP.

The mighty German economy of the year 1945. The perfect ground for a relative comparison. Did Germany even have a viable economy for most of the year? Athens in 2015 is roughly the same as Berlin in 1945, right?

[Martinus]

Why is this between Germany and Greece anyway?

Because Germany's unchecked foreign trade surplus (something that should have been addressed at the time of Euro creation) is one of the reasons for eurozone problems. It is what exacerbates effects of the crisis across the PIGS and Ireland.

[Admiral Yi]

Because Germany's unchecked foreign trade surplus (something that should have been addressed at the time of Euro creation) is one of the reasons for eurozone problems. It is what exacerbates effects of the crisis across the PIGS and Ireland.

I don't understand the connection.

[citizen k]

Because Germany's unchecked foreign trade surplus (something that should have been addressed at the time of Euro creation) is one of the reasons for eurozone problems. It is what exacerbates effects of the crisis across the PIGS and Ireland.

I don't understand the connection.

That's okay, neither does Martinus.

[Martinus]

Because Germany's unchecked foreign trade surplus (something that should have been addressed at the time of Euro creation) is one of the reasons for eurozone problems. It is what exacerbates effects of the crisis across the PIGS and Ireland.

I don't understand the connection.

A country running a constant substantial trade surplus with another country is essentially generating huge amounts of cash (that it is siphoning from the weaker country) that it cannot sensibly spend on consumption or sustainable investment. The cash thus ends up being lent at increasingly speculative prices back to the weaker country, to maintain the trade surplus, thus creating a vicious cycle of sorts.

Normally, a weaker country can protect itself from that kind of predatory mercantilism by rising its tariffs (to decrease imports) or becoming more competitive, usually through price (to increase exports), usually by devaluing its own currency (this is what Poland has been doing for the last two decades) - but both of these tools are unavailable to a Eurozone member state protecting itself from another Eurozone member state's predation.

In essence, the mechanism is similar to the recent real estate bubble only that it is one country creating a bubble in another country. Once the bubble bursts, the weaker country is left with a huge debt and rapidly contracting economy. Sounds familiar?