Die Neue Zeit
3rd April 2015, 16:34
http://www.grreporter.info/en/creditors_defined_yannis_varoufakis%E2%80%99_propo sals_laughable/12451
"Amateur investigators will be appointed for a strictly limited period (not more than 2 months), with no possibility of extension. After a basic training, they will masquerade as customers on behalf of the tax authorities, equipped with video and audio recording devices," the minister explained. According to Varoufakis, even by itself, the news that there are thousands of ‘undercover agents’ in many parts of the country, wearing recording devices, will radically change the behaviour of taxpayers and will lead to the desired results in the fastest conceivable way." (Yanis Varoufakis)
I'm not sure if the article goes on to unintended sarcasm or not in this next part:
In fact, this measure emulates, or at least tries to, the Whistleblower Office of the US Revenue Service. [i]As is well known, the latter is able to scare into compliance even the mightiest corporations.
The so-called whistleblowers, who help detect cases of tax evasion, receive bonuses, which can reach up to 30% of the taxes or fines paid by offenders.
Could something like this be pulled off in Greece? Hardly, because both the taxation legal framework and the system of tax inspections are unlike the US ones. The Greek system does not have those ‘safety valves’ like the US one does, which can secure tax evasion scaring tactics and make them really scary.
That is because even US tax avoidance is so high. Based on the article's wording and even on official IRS information, the Whistleblower Office goes only after (illegal) tax evasion, not after the broader (and legal) tax avoidance. One wouldn't expect the average whistleblower in the program to be aware of something like, say, the General Anti-Avoidance Rule (GAAR).
Towards the end of the article:
As the Financial Times points out, responses to the plan for instituting tourist-agents have portrayed it as something slightly humorous, and this is a clear sign of the growing gap between the Greek government and the country's creditors.
Other reactions elsewhere:
Greece Proposes To Become A Tax-Collecting Police State: Will "Wire" Tourists And Unleash Them As "Tax Inspectors" (http://www.zerohedge.com/news/2015-03-06/greece-proposes-become-tax-collecting-police-state-quietly-requests-third-bailout-do)
And yes, while one can joke all day about wired tourists collecting hourly pay from the Greek government while moonlighting on behalf of the Greek tax collector agency (a process that will actually end up costing far more than collecting especially since the collectors have no incentive to actually catch anyone but to merely be paid as long as possible on an "hourly" basis), the real issue here is that Greece is effectively hoping to become a tax-collecting Police state: in which "the news that thousands of casual "onlookers" are everywhere, bearing audio and video recording equipment on behalf of the tax authorities, has the capacity to shift attitudes very quickly, spreading a sense of justice across society and engendering a new tax compliance culture - especially if combined with the appropriate communication of the simple message that the time has come for everyone to share the burden of public services and goods."
[...]
In fact, it would be more realistic if Greece asked to outsource all public and private communication to the NSA and then subcontract it to find who the tax evaders are. Especially since the NSA already knows all the perpetrators.
The more I think about this in context to tax avoidance problems in developed countries, the more I think both that Varoufakis has a crucial point, and yet that he has overlooked the issue of tax literacy. Liberal economists like Piketty like to point out the "golden" post-WWII era of high progressive taxation and reduced inequality, but there is scant literature on the history of (illegal) tax evasion and (legal) tax avoidance, so the purported levels of tax compliance by corporations and the wealthy back then is suspect at best.
"Amateur investigators will be appointed for a strictly limited period (not more than 2 months), with no possibility of extension. After a basic training, they will masquerade as customers on behalf of the tax authorities, equipped with video and audio recording devices," the minister explained. According to Varoufakis, even by itself, the news that there are thousands of ‘undercover agents’ in many parts of the country, wearing recording devices, will radically change the behaviour of taxpayers and will lead to the desired results in the fastest conceivable way." (Yanis Varoufakis)
I'm not sure if the article goes on to unintended sarcasm or not in this next part:
In fact, this measure emulates, or at least tries to, the Whistleblower Office of the US Revenue Service. [i]As is well known, the latter is able to scare into compliance even the mightiest corporations.
The so-called whistleblowers, who help detect cases of tax evasion, receive bonuses, which can reach up to 30% of the taxes or fines paid by offenders.
Could something like this be pulled off in Greece? Hardly, because both the taxation legal framework and the system of tax inspections are unlike the US ones. The Greek system does not have those ‘safety valves’ like the US one does, which can secure tax evasion scaring tactics and make them really scary.
That is because even US tax avoidance is so high. Based on the article's wording and even on official IRS information, the Whistleblower Office goes only after (illegal) tax evasion, not after the broader (and legal) tax avoidance. One wouldn't expect the average whistleblower in the program to be aware of something like, say, the General Anti-Avoidance Rule (GAAR).
Towards the end of the article:
As the Financial Times points out, responses to the plan for instituting tourist-agents have portrayed it as something slightly humorous, and this is a clear sign of the growing gap between the Greek government and the country's creditors.
Other reactions elsewhere:
Greece Proposes To Become A Tax-Collecting Police State: Will "Wire" Tourists And Unleash Them As "Tax Inspectors" (http://www.zerohedge.com/news/2015-03-06/greece-proposes-become-tax-collecting-police-state-quietly-requests-third-bailout-do)
And yes, while one can joke all day about wired tourists collecting hourly pay from the Greek government while moonlighting on behalf of the Greek tax collector agency (a process that will actually end up costing far more than collecting especially since the collectors have no incentive to actually catch anyone but to merely be paid as long as possible on an "hourly" basis), the real issue here is that Greece is effectively hoping to become a tax-collecting Police state: in which "the news that thousands of casual "onlookers" are everywhere, bearing audio and video recording equipment on behalf of the tax authorities, has the capacity to shift attitudes very quickly, spreading a sense of justice across society and engendering a new tax compliance culture - especially if combined with the appropriate communication of the simple message that the time has come for everyone to share the burden of public services and goods."
[...]
In fact, it would be more realistic if Greece asked to outsource all public and private communication to the NSA and then subcontract it to find who the tax evaders are. Especially since the NSA already knows all the perpetrators.
The more I think about this in context to tax avoidance problems in developed countries, the more I think both that Varoufakis has a crucial point, and yet that he has overlooked the issue of tax literacy. Liberal economists like Piketty like to point out the "golden" post-WWII era of high progressive taxation and reduced inequality, but there is scant literature on the history of (illegal) tax evasion and (legal) tax avoidance, so the purported levels of tax compliance by corporations and the wealthy back then is suspect at best.