Spending cuts vs. tax evasion performance

You are invited to read this very recent paper about the magnitude, sources and effects of tax evasion in Greece. Then, please contrast the magnitude of tax evasion with the following number on the new squeeze in spending. We have:

• From the paper: “Foregone tax revenues are 16.3 billion euros, or 68 percent of the defcit for 2010 ” and tax evasion of this or about this magnitude happens every year!!! You will also find that their estimate of the unreported income is 41 billion euro – this is not and cannot be the rich man’s money alone, read the distribution of tax evaders on the paper.
• From the new fiscal measures on reduced spending (in Greek): 11.6 billion euros – and this is a one-time only measure!!!
• –> Difference in measure effectiveness of selecting to eliminate tax evasion for 2010 and doing the one-time fiscal squeeze in 2011 = 4.7 billion!!!

It makes you wonder…And yet, I ain’t talking about increasing taxes or not reducing spending where it should be done.  Stealing around from your neighbor though and then demanding many things for free just doesn’t sound right. At least in the US the have the decency to crack on domestic and international tax evasion – just remember who went after the unreport income in UBS – and then discuss how fiscal policy should be conducted.