ATHENS – With Finance Minister Euclid Tsakalotos having admitted the ruling Radical Left SYRIZA-led coalition – reneging on campaign promises – deliberately overtaxed the Greek middle class, a report by the Organization for Economic Cooperation and Development (OECD) said the government isn’t using the money for benefits for them.
The Paris-based group said families in Greece with an average monthly salary of 900 euros ($1105) pay particularly high taxes in return for almost nothing in return, with health care cuts and one of the European Union’s worst education systems.
Greece has the third highest tax rate in the EU for medium and high incomes, which in the last few years have faced an ever increasing tax bill, Eurostat data show, said Kathimerini, before Prime Minister Alexis Tsipras’ agreement for new taxes on low-and-middle income families kicks in, either in 2019 or 2020, along with more pension cuts.
The majority of OECD and Eurozone countries have been constantly reducing their tax rates, both for individuals and corporations, while improving social benefits, the review found.
The data presented March 21 by the OECD in its Going for Growth report and Eurostat found Greece has been hit with a double-whammy: taxes high as Scandinavian countries but benefits as low as the poorest in the Balkans, including for education.
In 2017, year Greece had the fourth highest tax rate for individuals across the EU. Combined with the solidarity levy, income tax amounted to 55 percent, behind that in Sweden (57.1 percent), Portugal (56.2 percent) and Denmark (55.8 percent). On the other hand Bulgaria has maintained its rate unchanged at just 10 percent since 2008.
Greece runs counter to the rest of Europe, hiking its top rates from 40 percent in 2008 to 55 percent today, as income tax last year came to 45 percent for earnings over 200,000 euros per year plus 10 percent for the solidarity levy.
Families with children – who are seeing benefits cut by SYRIZA, which promised to help them before breaking that vow too – are getting whacked especially hard.
OECD data provide the example of a couple with two children and an average salary of 850-900 euros ($1043-$1105) per month who pay 38.2 percent in taxes compared to the OECD average of 30 percent. In Ireland it comes to 13.6 percent.
It’s even worse for the jobless, who get a benefit of just 40 percent of the average income, against 72.8 percent in Italy and the Czech Republic. The OECD also stresses the very low quality of the Greek education system based on its PISA ranking, compared to fellow EU countries in the 28-nation bloc.