The Greek solution to mass scale tax evasion is to build a surveillance state, while outsourcing the actual surveillance to tourists.
If you’re a tourist in Greece, there are so many things to do: visit the Acropolis, admire the architecture in Santorini and maybe try to catch some local tax cheats. No, really.
The Financial Times published a letter that Greek finance minister Yanis Varoufakis sent to Eurogroup president Jeroen Dijsselbloem. Varoufakis suggested that “students, housekeepers and even tourists” would get paid by the hour if they were willing to get wired and go more-or-less undercover, posing as customers and trying to catch tax evaders in the act.
This is apparently part of the Greek government’s effort to make a credible commitment at reform. Talk of a ‘primary surplus’ is no longer relevant with Greek revenues imploding. That makes continued support from the European Union more necessary for the country but also harder to obtain.
Surely this proposal won’t be as bad for tourism as the new government’s proposed crackdown on all-inclusive resorts. But help me model it — will suggesting tourists inform on their hosts increase activity in a sector that may represent as much as 20% of the Greek economy (by offering a financial incentive for tourists) or reduce tourism (by degrading the welcoming culture in the tourist industry if Greek business owners suspect their guests of being informants)?
If this idea makes the cut, of course, the new government is already out of ideas.
fhe economic woes of Greece and Italy are a clear warning to libertarians, but they can’t see it of course. This proposal is not the solution.
While in the military, I was in Crete twice during the 1980’s. Like Mexico, the locals wanted American dollars and would bargain with you. Second time, took a bus to another town on the island and paid a local woman $2 each for a place to stay.
What the Greeks cared about, was selling items to the locals. You went to Crete with a nice video camera, you better be leaving with it.
To be fair this is an incredibly difficult problem to solve. Building an effective tax enforcement regime in the face of a culture of systematic tax avoidance will take years even with the best of intentions. It’s generally unappreciated that in most Western countries the majority of people pay their taxes because they think it’s the right thing to do and they want to obey the law, not because of fear of prosecution.
No one likes a snitch, doesn’t matter what part of the world…STOP SNITCHING!
As they say…..”snitches get stitches!”
I’m heading to greece next week, where do I sign up? Haha, just kidding. Although, my adventurous side thinks it would make for a pretty random and interesting day… my manufactured-spending side would feel terrible ratting anyone out.
Actually, this idea isn’t as far fetched as it sounds. Peru initiated a somewhat similar program for a while back in the late 70’s & early 80’s that, accompanied with often brutal enforcement, took tax evasion from nearly 100% to reportedly under 50% — nothing short of miraculous by South American standards (excluding Chile).