Monday, September 12, 2011

Greeks to levy property tax to tackle offshore

From the FT:
Evangelos Venizelos, the finance minister, said an emergency tax would be applied to private property in 2011 and 2012, while all elected officials would take a 7 per cent salary cut this year.
The property tax is interesting. Details:
"The new property levy, to be assessed according to surface area, would be charged to owners’ electricity bills, bypassing normal tax collection procedure.
. . .
"It’s important that owners of properties registered with offshore companies are not excluded,” he added, referring to a swath of luxury properties in suburbs of the capital."
This is something half way towards a land value tax - something TJN supports. It is not a land value tax, since it is, according to this story, calculated according to surface area alone. If they included the rental value of the property as a basis for assessment, then we would see a land value tax. And, as he notes, a LVT would capture those properties that are owned by offshore companies, as so many Greek properties apparently are. (This is a point explicitly mentioned in the conclusion chapter of Treasure Islands.)

A land value tax isn't enough, though. A large set of wealthy Greeks don't seem to be contributing:
"In an unusual move, he said the country’s wealthy ship-owning community, which is not taxed on the bulk of shipping earnings, would be tapped for voluntary contributions to Greece’s recovery.

"There are people who haven’t contributed to this collective effort to rescue the country. . . The burden has fallen mainly on middle and low-income earners, so we want the international Greeks to help in a practical way,” he said.
Indeed. And other measures are required to tackle the offshore system. You can bet that secrecy jurisdictions are at the centre of those magnates' finances.


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