The avaricious SEV leadership
The well-known recent self-centered behavior of certain representatives of the upper-middle class in our country was manifest last week once again, in open defiance of the working people and households whose economic situation has deteriorated. Specifically, no sooner had Economy and Finance Minister Giorgos Alogoskoufis tabled, last Monday, an amendment requiring corporations to pay up-front (that is, immediately after they submit their income statements for 2005) a greater portion of the tax due (65 percent instead of 55 percent and, specifically for banks, 80 percent instead of 60 percent) than the notoriously impertinent couple at the head of the Federation of Greek Industries (SEV) President Odysseas Kyriakopoulos and Vice President Dimitris Daskalopoulos started making statements in newspapers and TV channels about a tax coup, continuous uncertainty in matters of taxation and «a sudden measure that upsets the climate of confidence (between the government and businesses) and the firms’ business plans.» According to my sources, Alogoskoufis not only was not cowed by these reactions but is thinking of making businesses next year pay an even higher proportion of their due tax up-front – 75 percent for most businesses and 90 percent for banks. The extension of the measure is to be included in the amendment tabled last week. PM furious The same sources added that Prime Minister Costas Karamanlis is especially furious and bitter at the egotistical behavior of the industrialists’ leadership and the head of the Athens Chamber of Commerce and Industry Drakoulis Foundoukakos. The PM has concluded that, with their stance, the owners of the means of production not only fail to contribute toward cementing social cohesion but, through their excessive greed, provoke the popular strata that have been burdened with helping reduce the huge budget deficit and public debt and allow Greece to avoid the European Commission’s demanding and demeaning supervision. What makes the industrialists’ position even more galling, the PM’s close associates say, is that the present government, despite the explosive fiscal problems it faces, immediately implemented its pre-election promise to reduce corporate tax by 10 percent over a three-year period. At the same time, it was forced to raise value-added tax by a percentage point, imposing an additional burden on consumers, and to implement a tight income policy for the 5 million people working in the state and, especially, the private sector. Alogoskoufis responds On this issue, responding point by point to criticism, Alogoskoufis explained to me the following: – The increase in the amount of tax that must be paid up-front by corporations does not affect the amount of the tax as a whole which, this year, is being reduced by two-and-a-half percentage points. This first installment of tax payment is just part of the overall tax and its increase does not cancel – as some rushed too easily to claim – the corporate tax cuts. For example, if, because of the corporate tax cut, an enterprise will have to pay 5,000 euros less in tax than last year, this is exactly what it will pay regardless of the amount to be paid up-front. – Greece must adapt to current practices in the European Union where, in many countries, such as Denmark and Germany, enterprises pay as much as 100 percent of the corporate tax up-front. Greek enterprises must adapt and also help in the effort to reduce the fiscal deficit, an effort to which each of us has to contribute. – The increase in the amount of corporate tax to be paid up-front goes some way toward reducing a difference between individual and corporate taxpayers. In the case of salaried employees, their tax is withheld from their monthly payments. Thus, they pay all of their tax in advance and sometimes even more than is their due, as tax returns show. PASOK’s position In this case, however, it is not only the industrialists who have strayed from the path but the so-called Panhellenic «Socialist» Movement (PASOK), backed up, of course, by the newspapers and TV channels of their favorite businesspeople. The stance adopted by a number of party cadres from the Simitis period, whom George Papandreou has unfortunately kept, is a form of opposition discourse without principles, without ideology, bereft of policy and a social dimension. Last year, when the government cut taxes for corporations, but not individuals, PASOK had denounced its «class politics.» Now that the government, due to the difficulties posed by EU supervision, has decided to shift part of the burden onto businesses, the same PASOK cadres, thoughtlessly and shamelessly attack the government for not keeping its promises. In a parliamentary committee session, PASOK MP Vasso Papandreou attacked Christos Gortsos, general secretary of the Hellenic Banks’ Association, for saying that he had no problem with the higher amount of corporate tax paid up-front. Papandreou scolded him because «instead of defending the banks and their clients, he defends the government.» It should be noted that a similar increase had been made by the Socialist Finance Minister Alekos Papadopoulos in 1996 with the correct argument that the public debt ought to be reduced ahead of Greece’s joining the EMU.
