Recent Study Reveals Widespread Tax Evasion in Greece; Special Report by Leading Financial e-Letter Investment Contrarians

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In a recent Investment Contrarians article, editor Sasha Cekerevac reports that in a recent study to determine the number of Greek citizens who pay taxes, approximately 70% of Greeks were found to underreport their income. He notes that because this income was not declared, the Greek government lost 11.2 billion euros in taxes, or approximately four percent of gross domestic product (GDP). (Source: “Wealthy Greeks Still Don’t Pay Taxes,” Der Spiegel, November 1, 2012.) According to Cekerevac, while America’s problems aren’t exactly the same, it has too many loopholes and deductions that are only contributing to the ever-increasing government debt.

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Recent Study Reveals Widespread Tax Evasion in Greece; Special Report by Leading Financial e-Letter Investment Contrarians

One of the common themes around the world is the growing level of government debt, due to high budget deficits. Budget deficits occur when spending is greater than revenue.

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In a recent Investment Contrarians article, editor Sasha Cekerevac reports that in a recent study to determine the number of Greek citizens who pay taxes, approximately 70% of Greeks were found to underreport their income. He notes that because this income was not declared, the Greek government lost 11.2 billion euros in taxes, or approximately four percent of gross domestic product (GDP). (Source: “Wealthy Greeks Still Don’t Pay Taxes,” Der Spiegel, November 1, 2012.) According to Cekerevac, while America’s problems aren’t exactly the same, it has too many loopholes and deductions that are only contributing to the ever-increasing government debt.

“One of the common themes around the world is the growing level of government debt, due to high budget deficits. Budget deficits occur when spending is greater than revenue,” explains Cekerevac. “Taxes are the main source of revenue for governments; taxes decrease with a slow economy. A slow economy means fewer employees, which means less revenue from income taxes, and lower taxes on goods purchased. This increases budget deficits, which then adds to the rising total of the government debt.”

But, as Cekerevac notes, this is not a problem that exists solely on American shores. He points out that a big issue around the world is how to tax the wealthy.

“While many in America believe that increasing taxes for the wealthy will decrease the budget deficits and, in turn, eventually decrease the government debt, the problem is more severe in some nations,” states Cekerevac.

Using Greece as an example, Cekerevac reports that a recent study revealed that undeclared income totaled in excess of 10% of Greece’s GDP for 2009, or 28.0 billion euros. He adds that the report cited lawyers, journalists, entertainers, and doctors as being the biggest culprits. (Source: “Wealthy Greeks Still Don’t Pay Taxes,” Der Spiegel, November 1, 2012.)

“That is a truly staggering amount relative to GDP, which is exacerbating the budget deficits and the growing government debt,” says Cekerevac. “This lack of revenue is pushing the government to enact further spending cuts, of which the average citizen is feeling the full effects, including massive pension cuts.”

The Investment Contrarians editor notes that the U.S. has out-of-control budget deficits, too, but its problems are quite different from those of Greece. According to Cekerevac, the U.S. has too many loopholes and deductions that need to be eliminated, and structural changes that need to be made to reduce the budget deficits and begin paying down the government debt.

To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.

Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”

The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing, and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work, and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.

After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.

Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.

Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.

George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.

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