Greek Tragedy ( Capitalism in crisis....again! )

[reverendjeremiah]

We are discussing Greece here, not political or economic ideology.

Thats what I thought as well..and that is what I had in mind for the context of my post

If you think that capitalism was to blame for the Greek situation then give your reasoning, explain why it was a more significant factor than the out of control public debt, rapidly rising costs of welfare systems, ageing population and retirement at 52 on an 80% salary, lack of investment in the productive sector to create wealth and lifestyles that tended to be more demanding of goods and services than they could provide for themselves. Or better yet, explain how you see Capitalism being to blame for a situation where they are not being productive or profitable and didn't sufficiently use capital investment to extent their wealth, the banks created a situation where they are now owed tens of billions of dollars and will likely not recover it all (and have a fairly decent chance of receiving none) given they exist to seek profit.

I never suggested that Capitalism was to blame for the Greek situation. I specifically said "Modern Capitalism", and to ensure that people did not misunderstand me, I defined "Modern Capitalism" as "Privatise the profits, socialise the losses." I personally see no problem with the age being set at 52 on an 80% rate. The big problem in this situation is that the "modern capitalists" (please refer to my original definition for it again) are currently in control of Greece and have managed to push, as of 2010, the corporate tax rate down one percentage point each year until it drops from 25% to 20% in 2015. As long as this is in effect, the Social Security system will only get worse. Why did you not know this? Let us look at the current exchange rate of Dollar versus Euro:
http://www.google.com/search?q=euro+vers...ess&ie=&oe=

Now lets look at the income tax rate of the supposedly "progressive tax system" they have in Greece:

The employer deducts tax from the employee and transfers it to the tax authority every month. Income tax brackets in Greece for the year 2008 are 0% (up to 12,000 euros), 27% (from 12,001 to 30,000 euros), 37% (from 30,001 to 75,000 euros) and 40% (above 75,000 euros). For tax year 2009 the respective rates will be 0%, 25%, 35% and 40%.

The cut off at 40% starts too low and contains everything higher than that low number. 75,000 Euros is rounded equivalent to $100,000 USD. Now look at the next lowest bracket. This is the bracket of pay where the middle class / skilled workers tend to fall under. This braket is taxed at 3% less than the upper bracket. 3% difference?!?!?! This makes the mass of consumers (the middle class) under a much heavier burdon than the richest people of the country. I will remind you that the price of milk doesnt change regardless of wether you make 1$ an hour or $10,000 an hour. So naturally the only people who can AFFORD to invest is the rich becuase they have such larges sums of spendable income that is hardly taxed compared to the working class. Now we take this information and shine it under the light of the fact that there are tax excemptions in Greece as well.

Tax Exemptions
There are several cases of Tax exemptions under the Greek taxation system, these are as follows:
Proceeds from the sale of shares that are traded on the Athens Stock Exchange.
Income from ships and shipping.
A dividend received from a Greek company.
Capital gain from sale of a business between family members, as defined by law.

All of these tax exemptions are more likely to benefit the upper income earners, and not the actual workers of the country. So now you have very filthy rich Greeks not only dumping the burdon of funding the country on the backs of the workers, but they also do not have to pay taxes for sales of stocks, income from shipping (which is a major income source in Greece), dividends from company stocks, and capital gains from transfering wealth between family members.

Anyone with a basic understanding of economics can easily see that the "privatise profits, socialise losses" is very much in effect in Greece, and it will only get worse as these rich people, who already barely pay any taxes, will have the taxes of the corporations lowered from 25% to 20%.

The problem in Greece will only get worse as the years go by. Why? Because the same people who are screaming "taxing the rich will kill jobs" fail to point out that the tax rates on the rich HAVE been going down and there is a direct connection between the decline of jobs and the decline of tax rates for the rich.

You want to see jobs? Jack the tax rates up on the rich and then give them incentives of tax breaks for the creation of new jobs. As long as the rich get to keep huge sums of cash with no strings attached, then the profit motive of capital fails to keep the rich moving forward. Lets make sure the profit motive stays on the rich shoulders as well as the mid class.