He's talking about the satellite photo story from a while back in which Greeks had many more (taxable) private pools than were reported to the government.
The question though is whether "more efficient tax collection" is really the cure for Greece's ailments. It really boils down to whether you think a centralized government can better allocate your dollars to your benefit, or whether you can.
You could certainly make an argument that people would free ride and/or greatly underestimate the benefit that spending 10 cents of each dollar on (say) the military or roads would provide, and this furthermore justifies taking that 10 cents by force as part of the price of membership in a community.
However, I personally find it less persuasive to argue that centralized allocation programs will produce greater wealth than distributed ones. A remote government simply doesn't have all the information and can't know your preferences.
One thing I find interesting is that many people can come to fairly good agreement on what the problem is (bad economy, low unemployment, etc.) but disagree very dramatically on what the solution should be. frossie is likely a Keynesian and rick888 is probably a Hayekian; in my experience, Keynesianism is in the water supply and the "default belief" for most college graduates, but most entrepreneurs tend to end up Hayekian:
He's talking about the satellite photo story from a while back in which Greeks had many more (taxable) private pools than were reported to the government.
I assure you, that is the least of it.
The fundamental problem in Greece is, as I said, ineffective tax collection and a corrupt machinery of state.
Since people are clearly having trouble understanding what ineffective tax collection actually means, let me explain: the government is unable to tax income or other forms of revenue. There is a huge cash (grey) economy that means that income tax, the primary revenue raising tool for most Western economies, is useless.
If you go into a taverna with your family and blow 100 euros on a big meal, the bill will arrive and only cash will be accepted. At the end of a busy night that brought in maybe 2,000 euros, the proprietor will report to the tax authority an income of 200 - hey, slow night, eh.
Now I realise this may be a struggle for those of you with a certain kind of politics, but believe me - a lack of an effective income tax is a terrible thing. For starters, the state needs revenues somehow - so since they can't reliably tax income, they have to tax secondary things - which unfortunately are things like fuel tax, and goods taxes that hit the poor much more than the rich. Hence a lot of the social tension that you see in the news.
This is why the swimming pools are a big deal. Yes it may sound insane that anybody wants to tax pools - but when the person who owns the beautiful pool in the house by the ocean claims he only earned $10,000 last year, and you are unable to actually bust him on such an atrocious claim, then taxing his easy-to-find pool is the only thing you can do.
This is a country than until very recently didn't even have a land registry; yes, the state had no idea who owned a piece of land.
The point is that Greece is a bad example to use in a debate of fiscal policy, because it works nothing like you US/UK/{Insert your big Western economy here} people think it does.
I disagree. Ineffective tax collection actually might be helping the greek economy. The government is so inefficient that I cannot imagine how paying more taxes would actually help in the long run. People can be more efficient and produce much more real value by spending their money.
The real big problem is the inflated public sector. This of course is a problem because is a big burden to the public finances but more importantly results in >20% of the population that is capable of working being occupied at the public sector producing minimal value for the economy overal.
Minor correction, but you said 'efficient' not 'effective' tax collection in your original post, there's a big difference in the solution to either problem, but I still understand your point.
"Cash only" is pretty common in Southern Europe. The local first division soccer team is cash only and strangely, its hard to find solid numbers on how many folks were at the games.
From the cafes to big business to retirees who are collecting their meagre pensions but still working (and not paying tax on that income) its a huge issue; not just for the lack of tax dollars but also the fact that things would become very dark and difficult if it was all legit.
If the people don't want to be taxed to pay for state services, then shouldn't the state fire people, stop services, and downsize, just like a business?
No startup can point a gun at its customers to force them to give it money. Some startups genuinely do provide a valuable service that people can't or won't pay for. Oftentimes the difference between a viable and nonviable startup is the culture of the people you're selling to (academics are notoriously hard to monetize, while myspacers click on lots of ads).
So if Greeks don't want to pay taxes like Brits then the Greek state should be a lot smaller than the British state. Replace as much as possible with user fees and just scale it down. Do you disagree?
Low taxes might be better; you can certainly make that case. However, what he's saying is that a large amount of people don't pay low taxes because that's the sort of system they put in place through due political process. They pay low taxes because they are cheating the system. That has a lot of very unpleasant effects: shifting more of the tax burden to those the state can collect from, creating tension and mistrust between different groups of people, and creating a general sense of disregard for the rule of law.
