Greece's Inability to Tax Itself

Greece's Inability to Tax Itself

The papers say we're on the verge of an economic meltdown because numerous EU member states can't get their fiscal house in order, and the contagion will inevitably spread to all corners of the globe. The sovereign debt crisis is rapidly becoming a liquidity crisis as the cost of borrowing has recently escalated for the governments of Greece, Portugal, Italy, and Spain. That means the trouble isn't limited to projected future debt -- which is obviously alarming. A more immediate concern is that the cost of carrying current debt will soon become unsustainable.

The past months have seen so many austerity measures across Europe that it's difficult to keep track of them all. Each package seeks to increase taxes and cut public spending; neither of which goes over too well with the citizenry. But what's the point of raising taxes when the culture tolerates cheating on your taxes?

You've probably heard the old cliche: 'In Greece, tax evasion is the second most popular sport after soccer.'

The joke is now reality....


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