Greece Urged to Get Tough on Tax - WSJ.com
Somehow, one can't help but think of all of this as socialist accounting which thinks there is no downside - i.e. the money from the private sector (where it can be invested, grow and create jobs) goes to the public sector (where it is consumed and then gone) - all of which is akin to the fairy tale about the goose that laid the golden eggs.
There have been interesting studies about the amount of GDP that can be taxed. The percentage tends to stay the same over time - no matter what the rates.
As is common knowledge, the higher the rates (esp. VAT), the greater the size of the 'gray' economy.
When an individual does their personal shopping, the price matters (if the price is too high, you don't buy it or can't afford to buy it).
With governments, the logic is that price does 'not' matter and VAT tax rates don't impact economic growth or activity.
It's too bad the common answer to economic malaise in Europe and the US is 'higher taxes' instead of 'less government'.
As taxes have gone up and government grown, there has been a downside. But, with such a commitment to taxes and big government, the downside has to be ignored.
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