Real tax reform needed
Reforms ought to have the element of a break with the past in their specific domain. Otherwise they do not constitute reform, they become just a simple clause. Unavoidably reforms must function to the benefit of the majority of people and upset the privileged few. If we accept that the meaning of reform coincides with the above, then there has been no reform in the tax domain, at least as far as taxpayers are concerned. The governments of the last few years have branded «reforms» the virtually annual changes in income tax brackets. The changes in those brackets or the rise of the tax-free ceiling may ease tax burdens (for some more than others), but this lasts just a short period of time. When no one is watching, indirect taxes rise (as in the case of the increase in cell-phone and cigarette levies in 2006), with the state taking back all it has given its citizens. That is evident from the analysis of state budget data: Revenues from direct taxation keep falling, while indirect taxes are ever increasing. Some 54 percent of state income originates in indirect taxes, while only 38.2 percent of inflows comes from direct taxes. True tax reform should signify the simplification of the labyrinthine tax system. It should give the citizens a sense of justice in taxation, knowing that the taxes they pay will indeed go to worthwhile purposes and that evaders will be punished. To date, dozens of committees have studied the local tax system. Various scientific studies have been published, while even the USA’s Internal Revenue Service has examined the Greek system and tried to convince those in power of the need to simplify it, noting there should be an end to regulations favoring certain interests. Taxpayers have by now realized that sooner or later more such special regulations will be issued and simply wait for them. Worse still, law-abiding taxpayers see the evaders getting away with it, which obviously makes the incentive for tax evasion ever stronger. Certainly, tax evasion is embedded in our character. No one likes seeing the state become a partner to the fruits of one’s labor, with a considerably high share. Anyone who pays a large portion of his or her revenues in tax would be more demanding in terms of services offered, public money management and whether his or her neighbors also pay their taxes.
