In 2009, approximately €28 billion in taxes went unreported in Greece, according to a new report from economists Nikolaos Artavanis, Adair Morse, and Margarita Tsoutsoura.
The Greeks have been dodging taxes! Stop the presses!
Yeah, yeah, we know: Tax evasion in Greece is nothing new. For instance, as the Wall Street Journal’s Justin Lahart notes, when tax collectors set out to compare swimming-pool ownership with incomes, Greece's top earners actually camouflaged their pools.
Therefore, another story on Greek tax evasion doesn't seem all that "newsy," does it? Not really. But what is noteworthy is the amount of cash that has gone unreported. You see, because hidden income is, well, hidden, the Greek government has no idea how much Greek earners have been hiding from the taxman, which means there are no official figures.
So, in order to figure out how much the Greeks have avoided reporting, Artavanis, Morse, and Tsoutsoura turned to one of Greece’s ten largest banks.
“The banks, with tens of thousands of customers across the country, provided loan and credit-card application and performance data," LaHart writes.
"That not only gave the economists access to self-reported incomes, but also allowed them to infer the banks’ estimates of true incomes -- which are likely closer to the mark," he adds.
What did the economists find?
After crunching the bank-provided numbers, the economists estimated that in 2009 some “€28 billion in income went unreported.”
You know what that means, right?
“Taxed at 40%, that equates to €11.2 billion - nearly a third of Greece’s budget deficit,” LaHart writes.
With all of its financial woes, you’d think Greek leaders would try a little harder to collect tax revenues, right? So what’s the deal?
“The economists were also able to identify the top tax-evading occupations -- doctors and engineers ranked highest -- and found they were heavily represented in Parliament,” LaHart reports.
Depicted is the zip code-plotting of tax evasion. The authors of the study pool all individuals in a zip code covered in all samples (over all the years covered by each sample) and plot the average zip code percent of estimate true income evaded. Darker colors denote more tax evasion. The circled area (specifically, the dark area in the middle of the circle) is Larissa, an area targeted by news reports that has the largest number of Porsche Cayennes in Europe.
(H/T: Times 24/7)