ATHENS – Too late to help Prime Minister Alexis Tsipras regain standing in polls, the scrapping of planned new taxes on previously exempt people and families in Greece will be paid by some one million self-employed who will tax breaks they were set to get.
The robbing Peter-to-pay-Paul maneuver was aimed at benefiting the low-income sector that was set to be taxed after the Radical Left SYRIZA leader relented to demands from Greece’s European creditors to get a third bailout in 2015, this one for 86 billion euros ($95.15 billion.)
Taking a beating in May 26 elections for Greek municipalities and the European Parliament, Tsipras rushed through a Parliament boycotted by most all rival parties an amendment cancelling the new taxes set to begin in 2020. He called snap polls for July 7 but the latest survey put him 9 points behind.
The cancellation of the taxes came without consenting the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) that said would stay out of domestic politics during a campaign but then warned Tsipras handouts and tax cuts could undo reforms helping bring a slow recovery.
To help the low-income sector set to be taxed, Tsipras had to scrap tax breaks for professionals, craftsmen, musicians and owners of small-and-medium-sized businesses to make up the difference in lost income.
That would have lowered the ENFIA property tax surcharge Tsipras vowed to ened, reduced the low income tax rate from 22 to 20 percent, end a hated solidarity tax for those earning up to 30,000 euros ($33,888) annually and more cuts from those earning up to 65,000 euros ($73,420) a year, the middle class that Finance Minister Euclid Tsakalotos admitted was being overtaxed to help redistribute the wealth.
The major opposition poll-leading New Democracy had earlier proposed legislation to stave off new taxes on the country’s lowest-income but Tsipras wouldn’t hear of it until he wanted it done and asked the Conservatives to back him after he ignored them.