BUSINESS

Middle incomes take big blow

EIRINI CHRYSOLORA

TAGS: Economy

Greece’s middle-income earners are today at least 30 percent poorer than they were in the period before the economic crisis, having been overtaxed and having grown in number, as they now include previously wealthier categories too, according to Hellenic Statistical Authority (ELSTAT) data processed by the Hellenic Federation of Enterprises (SEV).

The latest figures, which concern the year 2018, show that the middle class in income terms accounts for 54 percent of households and pays 51 percent of taxes and social security contributions, while in 2007 it accounted for 48 percent of households that paid just 37.5 percent of taxes and contributions.

The burden on the middle class soared under the government led by Alexis Tsipras, especially after 2016: The average tax rate for the middle class rose from 19.3 percent in 2009 to 27.9 percent in 2018, “mainly because of the increases in social security contributions and the special solidarity levy as of 2016, with the implementation of the third bailout agreement,” SEV noted in its weekly bulletin issued on Thursday.

The middle class, by the definition of the Organization for Economic Cooperation and Development (OECD) that SEV cites, covers net annual incomes of 14,700-39,300 euros for a household with two adults and two children up to the age of 14. This is an income category that receives between 75 and 200 percent of the median national income that constitutes the equator between the richer 50 percent and the poorer 50 percent; that currently amounts to about 20,000 euros per year. Before the crisis the medium income stood at about 30,000 euros, therefore it really crumbled during the crisis. The middle-income class now accounts for 54 percent of the population, up from 49 percent before the crisis.

The upper income class, with earnings over 39,000 euros per year, currently represents 13.5 percent of households and covers 38.1 percent of tax revenues, against 56 percent it covered before the crisis when it accounted for 17 percent of households. A section of it has slipped to the middle-income class, SEV explained.

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