March 13, 2015 in Daily Bulletin
Greece has a tax evasion problem, and while many think of it as a problem within the elite oligarchy, the upper middle class contributes helps drive it wrote Mike Bird:
- Generally banks set up loans so that an individual would spend no more than 30% of their monthly income paying that them back.
- In Greece the average is 82%.
- For some professional classes such as lawyers, doctors, or those that provide financial services, more than 100% of reported income is spent paying back loans.
- This is largely because reported income is falsely under-stated to reduce income taxes.
- Banks know this, and when deciding whether or not to give out loans, they have models to take into account an individual’s job and their reported income. They can then calculate their probable actual income.
Read more about the problem of tax evasion in Greece here.
Source: Business Insider
Via: Marginal Revolution