Taxation leads to dwindling of middle classes

Taxation leads to dwindling of middle classes

The government’s tax measures have failed to fetch additional revenues, while generating more expired debts and leading to the concealment of incomes and the shrinking of the middle classes, figures show.

Last week, Finance Minister Euclid Tsakalotos himself gave a definition of the middle classes, putting their incomes at between 20,000 and 45,000 euros.

In 2015, 9.57 percent of taxpayers or 836,959 people earned over 20,000 euros; this dropped to 8.3 percent or 743,768 people in just three years, but they were the ones who shouldered 60 percent of taxes on individuals.

Also in 2015 the tax-free ceiling was at 9,545 euros, the solidarity levy rates were more favorable than today’s and the self-employed were taxed at a rate of 26 or 33 percent, depending on their income. With this system the income tax on individuals fetched 8.3 billion euros from declared incomes of 76 billion.

Last year the ceiling had dropped to 8,636 euros, the solidarity levy rates increased and the self-employed suffered heavier taxation; all this was meant to fetch an extra 2-2.5 billion euros in 2018, but the sum of taxes collected from individuals remained at 8.3 billion euros, the same as three years earlier, while incomes declared by individuals fell to 73 billion euros – i.e. a drop of some 3 billion euros.

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