Spanish Guy
07-05-2013, 02:56 AM
Taxes in Europe are really high right now, much higher than in any corner of the USA. For example in my country, we have a 21% VAT, a third of your salary is destinated to fund the Social Security (a 7% paid by the worker, and a 28 by the bussiness), for paying pensioners, and furthermore we have to pay income taxes, and lots of "special taxes" in lots of products as alcohol, tobacco, gas, etc. And there are countries with higher taxes. Obviously, when an American forumer complains about the taxes in California or Illinois, I can only see you with some healthy envy.
Some countries in Europe, like Greece, Italy or Spain, are widely known for having a huge informal economy, and, as a consequence an important tax evassion. Politcians in Spain try to show the tax evassion issue as a rich people thing, and our equivalent to the IRS, in the last months, have acted versus some very famous people in Spain as the chief Sergi Arola or footballer Lionel Messi, who has been forced to pay € 15,000,000 in order to avoid a trial.
However, it's not only a rich people thing. For example, recent stats show 12% of tobacco consumed in Spain come from counter-feiting, with that rate rising to 35% in some provinces like Cádiz, one of the poorest on my country, which has border with Morocco and Gibraltar. In those circunstances, the recent government decission of rising tobacco taxes (now a 20-cigarrete Marlboro's pack costs 4.70€, about six dollars), doesnt' seem to be very smart. Furthermore, in Spain is relatively common in some economic sectors, paying a service without creating any bill in order to avoid the VAT payment.
Theorically, one of the main objectives of almost every elected government in the EU is reducing the fiscal deficit. In Spain, with a conservative government, although there have been some measures in order to reduce public spending, like reducing the subsidies to the public universities or for buying medicaments, the government has tried to reduce the gap rising taxes. Since the current Administration took the power a year and a half ago, we've experienced five rises on income taxes, four on corporate taxes, two on VAT, one on taxation on Patrimony, four on the Special taxes on products like gas, tobacco or alcohol, and, on the energy sector, 7 different taxes have been created, including a tax on a material used for making Air-Acconditioning machines and fridges. And that situation is not very different in other European countries.
However, the tax rises are not increasing revenues, as they're deepening the recession, and, as long as the taxes keeps rising, tax evassion is rising too. European governments in general, and the Spanish one on special, always say that more tax rises would not be necessary if tax evassion will be lower. Personally I don't accept tax evassion, as I consider the rule of law and the juridic security one of the pillars of our civilization, but really, I can't understand how elected politicians across Europe, suppossedly with a great intelectual formation, are not able to understand tax evassion is a consequence of our infernal taxation or basic Economics concepts like Laffer curve.
Some countries in Europe, like Greece, Italy or Spain, are widely known for having a huge informal economy, and, as a consequence an important tax evassion. Politcians in Spain try to show the tax evassion issue as a rich people thing, and our equivalent to the IRS, in the last months, have acted versus some very famous people in Spain as the chief Sergi Arola or footballer Lionel Messi, who has been forced to pay € 15,000,000 in order to avoid a trial.
However, it's not only a rich people thing. For example, recent stats show 12% of tobacco consumed in Spain come from counter-feiting, with that rate rising to 35% in some provinces like Cádiz, one of the poorest on my country, which has border with Morocco and Gibraltar. In those circunstances, the recent government decission of rising tobacco taxes (now a 20-cigarrete Marlboro's pack costs 4.70€, about six dollars), doesnt' seem to be very smart. Furthermore, in Spain is relatively common in some economic sectors, paying a service without creating any bill in order to avoid the VAT payment.
Theorically, one of the main objectives of almost every elected government in the EU is reducing the fiscal deficit. In Spain, with a conservative government, although there have been some measures in order to reduce public spending, like reducing the subsidies to the public universities or for buying medicaments, the government has tried to reduce the gap rising taxes. Since the current Administration took the power a year and a half ago, we've experienced five rises on income taxes, four on corporate taxes, two on VAT, one on taxation on Patrimony, four on the Special taxes on products like gas, tobacco or alcohol, and, on the energy sector, 7 different taxes have been created, including a tax on a material used for making Air-Acconditioning machines and fridges. And that situation is not very different in other European countries.
However, the tax rises are not increasing revenues, as they're deepening the recession, and, as long as the taxes keeps rising, tax evassion is rising too. European governments in general, and the Spanish one on special, always say that more tax rises would not be necessary if tax evassion will be lower. Personally I don't accept tax evassion, as I consider the rule of law and the juridic security one of the pillars of our civilization, but really, I can't understand how elected politicians across Europe, suppossedly with a great intelectual formation, are not able to understand tax evassion is a consequence of our infernal taxation or basic Economics concepts like Laffer curve.