Unfairness, Inequality, and Tax Evasion: An Analysis of the Distribution of the Tax Burden in Greece, 1955–1989

Pittaki, Zoi

doi:10.1007/978-3-319-90263-0_12

Unfairness, Inequality, and Tax Evasion: An Analysis of the Distribution of the Tax Burden in Greece, 1955–1989

Zoi Pittaki⁸

Chapter
First Online: 28 July 2018

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Part of the book series: Palgrave Studies in the History of Finance ((PSHF))

Abstract

This chapter analyzes the distribution of tax burden in Greece after the Second World War, focusing on the period from the mid-1950s to the late 1980s. It is shown that for the most part the system was prejudiced against the middle- and lower-income groups. This made the system unfair and increased its perceived illegitimacy. Added to the perceived unfairness were features such as taxes in favor of third parties, the revenue from which was given to the professional classes and organizations in a strong negotiating position. The chapter suggests that these characteristics contributed to the very high degree of tax evasion burdening the Greek system of taxation, one of the most severe problems of the country’s economy today.

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Notes

1.
Tax conscience can be defined as the moral sense of right and wrong guiding taxpaying behavior. In the Oxford Dictionaries conscience is defined as “[a] person’s moral sense of right and wrong, viewed as acting as a guide to one’s behaviour.” http://www.oxforddictionaries.com/definition/english/conscience. Accessed December 2, 2016.
2.
Straw and Glennie, “Third Wave of Globalisation,” 23.
3.
Kostis, State and Enterprises in Greece, 53.
4.
Some of the data presented refer to subsequent years; however, for the most part the analysis covers the period up to the late 1980s.
5.
For a breakdown of the structure of the tax revenue throughout 1950–2000, see Tatsos, Shadow Economy, 281.
6.
Giouras, Taxation and Politics, 327.
7.
Karagiorgas, Public Finance 2, 226.
8.
Bulletin of the FGI, August–September 1987, 493–4, 5–6.
9.
Karagiorgas, Public Finance 2, 245.
10.
Tatsos, Shadow Economy, 278–9.
11.
Ibid.
12.
Ibid., 281.
13.
For more information see ibid., 278–9.
14.
Ibid., 280–2.
15.
Giouras, Taxation and Politics, 322 (author’s translation).
16.
Vovolini Archive, Viomichaniki Epitheorissis, 22 (May 1955), 18.
17.
The law was introduced in 1919. See Sellas, Greek System of Taxation, 38.
18.
Glykou, State and Tax Policy 147.
19.
Giouras, Taxation and Politics, 317–18.
20.
Glykou, State and Tax Policy, 148.
21.
Break and Turvey, Greek Taxation, 39. OGA = Organismos Georgikon Asfaliseon, the farmers’ social insurance organization.
22.
Giouras, Taxation and Politics, 319.
23.
Index of Parliamentary Discussions 1946–67, 56–62, minutes from the sitting of the Special Committee, July 6–26, 1955 (author’s translation).
24.
Long-term Statistical Series of the Greek Economy, 13, 86–7.
25.
The Scopes of the Rearrangements, newspaper cutting, CHROTEX archive. From the layout and in comparison to other articles found in the same archive it seems very likely that tit was published in 1957 in I Naftemporiki (author’s translation).
26.
The Bulletin of Tax Legislation, 11, 11, January 23, 1957, 46.
27.
The Scopes of the Rearrangements.
28.
Vovolini Archive, File 30, Eftaxias Family, sub-file 1, Evidence no. 61, 2.
29.
Vovolini Archive, Viomichaniki Epitheorissis, 22 (May 1955), 18.
30.
See e-forologia.
31.
Sellas, The Greek System of Taxation, 122.
32.
Ibid.
33.
The tax rate remained at 35 percent until 1973; see Manesiotis, Tax Structure Change, 50.
34.
Stathopoulos, Taxation, 7.
35.
Ibid., 7–8.
36.
Ibid., 9.
37.
Ibid.
38.
Psalidopoulos, History, 41.
39.
Break and Turvey, Greek Taxation, 246–7.
40.
Ibid., 243. Laws 3213 and 3765 were introduced in 1955 and 1957, respectively.
41.
Ibid., 41. The law was introduced in 1959.
42.
Ibid.
43.
Ibid., 197.
44.
Ibid., 198.
45.
Ibid.
46.
Ibid., 195.
47.
Tatsos, Public Finance, 23–34.
48.
CHROTEX Archive, “Tax Courts,” I Naftemporiki, February 28, 1957, 6.
49.
Moscholios, Tax Incentives, 3–4, in the Library of the Historical Archive of the National Bank of Greece.
50.
Ibid.
51.
Ibid., 7.
52.
Dertilis, Ineffectual of Effective?, 40.
53.
For more information on the tax treatment of farmers, see ibid., 26, 48–9.
54.
Tatsos, Shadow Economy, 295–7.
55.
Ibid., 299–300.
56.
Ibid., 309.
57.
Glykou, State and Tax Policy, 177. See also Kouros, “The Abolition of Third Party Taxes.”
58.
Frangos, in Giouras, Taxation and Politics, 330.
59.
Kalyvianakis et al., Tax Regime, Shadow Economy and Tax Evasion, 33.
60.
“At least 350 taxes in favor of third parties have been targeted by the government and the troika.”
61.
Tatsos, Shadow Economy, 308–9.
62.
Giouras, Taxation and Politics, 329.
63.
Glykou, State and Tax Policy, 177.
64.
Tatsos, Shadow Economy, 277.
65.
Ibid.
66.
See Tatsos, Shadow Economy, 293.
67.
Statistical Yearbook of Greece, 1962, 26, 50; 2005, 184; 2009–10, 42, 108.
68.
Tatsos, Shadow Economy, 290, 293.
69.
Ibid., 290.
70.
Ibid., 302.
71.
Ibid., 302–8.
72.
According to the 1981 census.
73.
In 1961, pensioners accounted for 2.81 percent of the population; in 1981 their number had risen to 13.3 percent.
74.
Ibid., 287.
75.
The unequal distribution of the tax burden is also an outcome of the unequal relationship between direct and indirect taxes.
76.
Tatsos, Shadow Economy, 287.
77.
Ibid.
78.
Sellas, The Greek System of Taxation, 433–4.
79.
Ibid.
80.
Ibid., 277.
81.
Ibid., 74.
82.
As Giouras and Psalidopoulos, Occupation, Nazism and the Greek Economy, 19–20, 34, 224–46 indicate, this was like the tax policies followed by the German Occupation forces during the war.
83.
Tatsos, Shadow Economy, 287.
84.
See ibid., 20.
85.
IMF, Greece, 26.
86.
IMF, Corruption, 3. One of the means by which corruption is facilitated is bribery, “something, usually money, to gain an illicit advantage,” given to public officials in this case. See What is Bribery and Corruption?
87.
Tatsos, Shadow Economy, 247–9.
88.
Manesiotis, in Tatsos, Shadow Economy, 74.
89.
Greece, Selected Issues, 20.
90.
Tatsos, Shadow Economy, 186.
91.
Ibid., 75
92.
This tax official asked to remain anonymous.
93.
Tatsos, Shadow Economy, 75.
94.
Ibid.
95.
Psalidopoulos, History of the Bank of Greece, 293.
96.
Ibid., 186.
97.
Greece, Selected Issues, 26.
98.
Ibid., 277.
99.
Greece, Selected Issues, 24.
100.
Annual Reports for the Execution of the Budget, various issues.
101.
Kalyvianakis et al., Tax Regime, Shadow Economy and Tax Evasion, 275–9.
102.
Vovolini Archive, Notes—Tax Evasion, Viomichaniki Epitheorissis, 20 September 1953, 302.
103.
Ibid., 282.
104.
Giouras, Taxation and Politics, 330.

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University of Glasgow, Glasgow, Scotland
Zoi Pittaki

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ETH Zurich Institute of History, Zürich, Switzerland
Gisela Huerlimann
University of California, Santa Barbara, Santa Barbara, CA, USA
W. Elliot Brownlee
Keio University, Tokyo, Japan
Eisaku Ide

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Pittaki, Z. (2018). Unfairness, Inequality, and Tax Evasion: An Analysis of the Distribution of the Tax Burden in Greece, 1955–1989. In: Huerlimann, G., Brownlee, W., Ide, E. (eds) Worlds of Taxation. Palgrave Studies in the History of Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-90263-0_12

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DOI: https://doi.org/10.1007/978-3-319-90263-0_12
Published: 28 July 2018
Publisher Name: Palgrave Macmillan, Cham
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