The crisis of the public sector in Greece, beyond any logic, hit the hardest people that worked in the private sector. At the moment of writing there are 1,5 million people unemployed (in a country with a total population of 11 million) all from the private sector. There is not ONE public sector employee that lost his/her job during the crisis, during the years from 2010 that the greek public sector went bankrupt. There are even thousands civil servants that were found guilty of corruption and even murder (!) that either hold their positions and normal pay or continue to receive their (reduced) pay from within prison!
From the millions of unemployed people, many used to work in companies that could not stand the overtaxation of the greek government and had to shut down or move their companies to neighboring, friendlier countries.
But this is just one aspect of the taxation drama in Greece. The other affects the people on a personal level and creates two categories of citizens: the ones that work for the public sector and the ones who don't.
Below is a real example of the taxation scandalous injustice taking place in the last soviet regime.
On one hand we have an unemployed engineer (one of the many thousands in Greece) and on the other a civil servant making 26000 euros per year (this is the average pay in the public sector as shown here http://theteapotgr.blogspot.gr/2013/03/analysis-of-greek-public-sector.html).
The unemployed engineer HAS to pay for a pension fund regardless of whether he has any income or not around 4000 euros per year. If he doesn't pay then the greek public sector charges 14%(!) interest per year to the money he "owes". For engineers this is obligatory and they don't have the choice to stop payments while they are unemployed, meaning that their debt rises quickly to huge sums. In 2012 40% of the greek engineers could not make the payments and as a result they are burdened with debt and a 14% annual interest! The engineers' pension fund was among those that were robbed by the government with the PSI. It is estimated that more than 2bln euros were robbed in order to keep public sector spending for some more years at unsustainable levels (in total 120bln euros were robbed via the govt bond haircut (PSI) from private bondholders, among those the now bankrupt cyprus banks). Due to this robbery a new law was introduced that increases gradually the engineers' obligatory payments to "their" fund by 96% (gradual rises every 3 years and within 15 years the obligatory payments almost double). Meaning that an unemployed private sector engineer will have to pay around 8000 euros per year! Now multiply that by 30 years at least and see what you get.
In addition, the engineer has to pay obligatory subscription to the technical chamber of Greece (65 euros).
Has to pay a special annual tax for being a freelancer which is 700 euros.
0 income 4765 euros in taxes so far. Total income for the unemployed -4750 euros.
The unemployed engineer (or freelancer in general) in Greece is never recognized as such which means that these people cannot receive unemployment or any other related benefits.
Now if the unemployed owns an apartment then there is another annual tax which depends on the apartment's age, size, etc and on average is around 500 euros.
So for the unemployed engineer we have more than 5000 euros in taxes REGARDLESS of whether he has any income or not!
IF the unemployed engineer HAD an income from renting an apartment for example and received 6000 euros per year, there would be a 10% tax on this income from the first euro, so it's 600 euros. Now the taxes are 5850 euros for an income of 6000 euros. This is 97.5% tax!
I do not even bother you with the myriad of indirect taxes such as the obligatory tax for the public television which is 51 euros per year and is embodied within the electricity bills or the taxes at the price of gasoline (due to these taxes it costs 1,7 euros per liter in Greece).
Now lets review the civil servants who make 26000 euros per year: the government pays for their pension fund, no subscriptions of any kind, no special taxes of any kind, and their taxes are the following:
income 26000
tax 5820
tax return(!) 1600
final tax 4220 which is JUST 16.2% of their income!
It has to be noted here that if the private sector freelancer had some income from his job he would be taxed gradually starting with an initial lowest tax factor of 26%!
The reduction of taxation of public sector employees equals to a significant pay raise. And the government makes this possible by raising the taxes of freelancers and unemployed people leading them to bankruptcy .
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