Taxing wealth
Populism has always tried to cloak itself in ideology to cover up its hypocrisy. PASOK’s election campaign program follows that rule to the letter by assuring it will fund the handouts it has promised by taxing the rich. No doubt there are major inequalities in the distribution of national income in Greece, as evident from the fact that we have the highest poverty rate in the EU. One in five Greeks has an annual income below 5,500 euros and unfortunately the government has delayed taking action, only promising to fight poverty in its next term to the tune of 2 billion euros annually. The poverty rate, representing 20 percent of the population, has been an open wound for two decades. It is a wonder that PASOK is now promising to fight for what it failed to deal with while it was governing the country. There is wealth in Greece that can be taxed without harming the economy, that is, without creating counter-incentives to investment that would hamper growth. The large number of illegally built villas on the coasts and mountainsides indicates the extent of the concealment of wealth and outrageous tax evasion. Greece is also the only country in Europe where wage-earners, the self-employed and businesses are taxed but not wealth obtained from profiteering. Economy and Finance Minister Giorgos Alogoskoufis is preparing a bill to tax the profits earned from shares, bonds and foreign exchange; this will be a convincing answer to PASOK’s demagoguery on taxing wealth without having estimated the potential revenues. Income gained from tax evasion and profiteering should be taxed but we must realize that poverty can only be fought and low wages raised through economic growth.
