Almost a year after Greece received a €110 billion bailout to save it from bankruptcy, the country’s deeply dysfunctional tax system is still having trouble collecting taxes. With as much as one in three Greeks dodging the tax man—a national pastime in this country—the folks at the finance ministry are starting to turn their attention elsewhere.
They reckon that if you can’t collect revenues from the living, then how about raising some money from the dead? Specifically, Greece’s bean counters are wondering what happens to all those assets— houses, offices, bank accounts, stock holdings—that belonged to the deceased, but who passed away without survivors?
Why not? One estimate says there could be €4 billion of those unclaimed assets to be tapped. Other estimates put the number as high as €20 billion. If so, that would go a long way to closing Greece’s budget deficit (last year around €22 billion) and would even make a dent in the national debt (now around €340 billion).
Who knows whether the plan will pan out. There are lots of reasons it might not, ranging from petty bureaucracy, to outright corruption—it is said that the assets of the dead are already being exploited by some of the Greece’s shadier living inhabitants.
But more importantly, it underscores the chronic problems Greece faces with tax evasion and a giant shadow economy that experts reckon is as big as one-quarter to one-third of the real economy. If the Greek government were to collect all the taxes it is due, it wouldn’t have a budget deficit this year.
Sadly, that seems unlikely to happen. A year since Greece began its draconian austerity program under European Union and International Monetary Fund oversight, the Greek tax authorities have yet to nab one big tax evader or recoup revenue from the seizure of assets. Instead they have the favored quick-fix (and revenue producing) solution of a tax amnesty over the messy business of actually prosecuting tax dodgers in court.
The dead, by contrast, pose fewer problems. But they also don’t pose much of a solution either.
By Costas Paris and Alkman Granitsas
source: The Wall Street Journal
