Thursday, November 17, 2011

It's Not Greek To Me

[Editor's Note: This is a reprint of an article written by LG that appeared in the Asbury Park Press  on Sunday, November 13, 2011.  That version did not contain these photos.  Only the best for readers of The LG Report!]

I'm not an economist (who would admit to that these days even if they were?) but as a Greek-American, I have my own layman's explanation of the economic crisis in Greece.  It centers on a dearth of tax revenue.  But first, my qualifications:  My father was born and raised on Andros, the northernmost of Greece's Cycladic Islands.  I've been to Greece many times, including recently on my honeymoon.  I speak enough of the language to get by, I have plenty of Greek friends and relatives, I saw My Big Fat Greek Wedding, twice, and I love betting on horse races.   Oh, and perhaps my most conspicuous Greek badge of honor: I grew up washing dishes in my father's New Jersey diners.   

So here's my back-of-the-envelope analysis.  No need to break out your calculator to follow along.

Not paying taxes has long been a national pastime among Greece's citizenry.  It was not uncommon in the Old Country, years ago, to pay for a purchase in a store without having the transaction rung up on a cash register.  Absent a receipt, the government had no way of knowing that a tax should be collected.  Many times, I'm sure, it merely slipped the merchant's mind to report the income.  After all, he had other things to think about, such as who was looking good in the sixth race that day (most Greeks like to gamble) and what the line was on his favorite soccer team.  

In order to address this widespread duplicity in the sales tax system, Greece passed a law requiring consumers to obtain a receipt for their purchases.  The government now dispatches tax agents to patrol shopping districts, randomly stopping patrons and demanding that they fork over receipts for any purchases in their bags.  Failure to produce a receipt can result in a costly fine.  Thus, consumers have become, functionally, the taxing authority's enforcement arm.  In theory, this should have mitigated at least part of the problem, but I'm not so sure; what's to prevent merchants from simply having two separate cash registers?  As we all know, just about any compliance system can be easily defeated if the human mind is earnestly set to the task. 

My Aunt Rita, who lived in the United States for close to 50 years before retiring back to Greece, recently needed some carpentry work done in an apartment she owns in Athens.  She found a tradesman who said that he would do the work for 300 Euros.  When Aunt Rita mentioned that she wanted a receipt for her taxes, Carpenter Costas informed her that the price would be increased to 347 Euros.  If Aunt Rita was going to report the transaction, he was going to have to do the same, hence his 15% price hike — effectively, a penalty on Aunt Rita for following the law.  In the normal course of his work, Carpenter Costas just assumed that there would be no reporting to the government and no payment of taxes.  Multiply this by the number of transactions that arise among a populace of about ten million people, and Greece's lack of tax revenues comes into sharp focus.

While many Greek citizens (although certainly not all) appear to believe in their right to avoid paying taxes, they also seem to overlook the logical disconnect with their sense of entitlement to extensive government employment opportunities, full pensions and a litany of other state-provided benefits.  Apparently, these perks should be funded by the taxes of the other guy.  Running from the tax collector may have well been the first Olympic sport.

When I first started going to Greece in the 1980s, I was struck by the apparent religious devotion of the Greek people.  Everywhere I looked, especially on the islands, I'd see little white chapels standing as monuments to the populace's piety.  In many instances, a small house of worship, not capable of accommodating more than six or eight congregants, would stand alone near the top of a steep mountainside, without so much as a single access road in sight.  I'd just shake my head and say to myself, "Wow, what devotion!" 

Then, on perhaps my fourth or fifth visit to Greece, I said to my Uncle Leo (Aunt Rita's husband), "It's really impressive how devoted to God the people are here.  They build churches almost everywhere."  

A savvy businessman who had run a thriving construction company in America, Uncle Leo quickly set me straight. "Hey, Vlaka [which translates to "stupid" in English], don't you know why they do that? Everyone builds a church on their property here so they can get a tax break."   

Aha!  An epiphany, although not of the religious variety.  More tax avoidance.  Perhaps now those ornamental tax deductions on the mountainsides are finally filling up  ̶  with Greeks praying for a way out of their dire economic situation. 


  1. Wow! Lazarus, this was some kind of eye-opening article!


  2. thanks for a really informative post. I forwarded it to Mr. Eva, as I'm sure he will find it interesting as well. I guessed the reason for all those churches, though, after reading about the attitude toward taxes.

  3. Oh, my gosh. I'm sure you're pretty close to right. Thanks for the rueful chuckle.

  4. Let me see if I've got this right. The OTHER GUY should pay high taxes so you can get medical care, retirement benefits, etc.....

    Yep, sounds right to me!

  5. 2nd attempt at posting--I MUST NOT LET BLOGGER WIN!

    Let me see if I've got this straight. The OTHER GUY has to pay higher taxes so YOU can enjoy government subsidies & other benefits.

    Yep--sounds right to me!

  6. Great info LG, but you got me thinking here about tax-exempt status. Since I'm Jewish and my Hubby is Episcopalian, we could have dual houses of worship in our backyard and probably not only doubly qualify for tax exemption but maybe even get some subsidies - or bail-outs. The possibilities are just starting to addle my little brain...

  7. I just had no idea... I'm eyeing the patio (that's the extent of our yard here in CA) to see if we can possibly squeeze some kind of little chapel in our there...

  8. Thanks for sharing this. I had no idea that the economic situation in Greece is attributable to tax evasion! Enlightening stuff!

  9. What a marvellous account of the Greek tax (avoidance) system! As always, your writing is peppered with the defining LG humour and witticisms and I once again am reminded of why I follow you. Thank you for the insights and those special photographs saved especially for us :)
    Enjoy your weekend!

  10. Hey you sweet man! I just wanted to pop by and thank you for the wonderful comment you left on my blog the other day. You lifted my spirits! Hugs to you!

  11. Hello there. I was pointed in the direction of your blog by my mom, also an avid blogger and blog reader. Actually I believe she commented above on this very post (Karen). I quite enjoy your writing after the few posts I have read so far. The picture from your hotel balcony in CA looks like it might be in Huntington Beach, no? If its not then I plead the case that all SoCal beaches look the same. Lastly, I enjoyed your comments on Greece. My wife and I are fascinated with that area and want to visit before our 5 year anniversary, however, the economic problems, among others, have us thinking otherwise. Maybe southern Italy would be a better choice. Maybe that is blasphemy to a man so rich with Greek culture as yourself though.

  12. I just read further down your blog and came across the geography lesson. I wish to recant my previous desire to go to Greece. I will now be pushing the lady to go to the beautiful land of Sweden. :)

  13. This was a terrific post. It was so good I let Hubby read it. He is now on the phone to the builder seeing if we can work out some 'wheeze' involving a chapel on our new bit of land.
    Seroiously - your writing gets better and better - enjoyed this hugely- off to practise my new word now 'vlaka'!
    Carol xx

  14. Thanks for checking my blog out. I will definitely take your advice.

  15. Well that is pretty interesting!
    Good article Larry


The LG Report appreciates all comments, thanks for taking the time; Karma will probably award you a winning lotter ticket or something. The "or something" being more likely. But thanks again!