Taxing the good life

The growth of the national economy by 4 percent in the first quarter is an impressive and promising development as a swift increase in the GDP means more money for social welfare measures, infrastructure projects and for covering the public debt. But in modern democracies, growth’s contributions are not one-sided and should be spread throughout society. The government should promote such measures. Considering the negative fallout of globalization on Greece’s industrial sector, the mounting pressure on middle-class urbanites, and the rising number of the newly poor, the government should increase taxation on excessive consumption to finance its social welfare program. Angela Merkel’s tax package in Germany, announced earlier this week, scrapped tax breaks on luxury vehicles and introduced a «wealth tax» for those with annual earnings of more than 250,000 euros, increasing their tax rates to 45 percent from 42 percent. Foreign visitors are stunned by the hordes of SUVs lumbering through the narrow streets of Athens. The stock market bubble, the Olympic projects and other state contracts during PASOK’s eight-year rule allowed people to make huge fortunes overnight. These nouveau riche rushed to buy luxury flats and expensive off-road vehicles. Shouldn’t the Economy and Finance Ministry look into this controversial if not suspect exuberance of spending? The government has scrapped extra tax on vehicles with a factory value up to 50,000 euros (80,000 euros market value). But the ministry should use the TAXIS system to cross-check the incomes of SUV owners. And in any case why should SUVs have lower taxes than other cars with similar engines? And why aren’t executives taxed on the use of luxury cars leased by their firms as happens abroad?