Economist
May 5, 2010
Tragedy has now come to Greece as the protests mount. Those on the streets of Athens feel they are being forced to pay the price for a crisis that is not of their making. To some extent, they are right; tax evasion among the professional classes has been a problem for years.
But when debt crises occur, few are likely to escape the pain. It is a standard conservative argument that taxes on companies end up being taxes on everyone, since they will be passed on to consumers in the form of higher prices. But of course, it works the other way round; cuts in benefits for the poor, on in public sector payrolls, lead to lower demand for the goods and services that companies produce. We may all be in the same boat, but that will not stop left-wing parties from demanding punitive taxes on the rich, and right-wing ones demanding that public spending be slashed, and both groups blaming foreigners, creditors or both. Can there be anything more futile than Greece, a country with a big tourism sector, blocking planes from landing and boars from docking at Piraeus?
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