The political phrase is pleasant, easy and conditional politically difficult to question: «We will tax the great wealth»Alexis Tsipras brought it back with special emphasis, linking it to reductions in wage labour taxation (though as Prime Minister he did exactly the opposite) and with the assurance that it would not increase «not one euro» taxation of entrepreneurship and the middle class.
The real question, however, is not whether we agree or disagree with the principle. It's what it means. «Great wealth» And how much money is the State going to collect.
And that's where the problems start.
A politician who has actually worked out a tax proposal should, at least approximately, know the tax base to which it is addressed. How many taxpayers with a net worth of more than EUR 5 million? How many over 10 million? How many over 50 million? What is the total fortune of these people? Which part of it is real estate, which listed shares, which holdings in unlisted enterprises and which financial assets?
Without these answers there is no way to assess the proposal.
Let's take a simple example. If the taxable property above a certain threshold is EUR 60 billion, a tax of 0.5% would theoretically yield EUR 300 million. At a rate of 1%, the amount would be EUR 600 million. With 2%, 1.2 billion euros. This is a huge difference. And we're still talking about theoretical revenue before deductions, debts, valuations, tax compliance are calculated.
The second problem is even more important: what is considered property?
An entrepreneur may have a company worth EUR 50 million, without personally having EUR 50 million in deposits. If his participation in the company is most of his property, will he be taxed? And if so, how will an unlisted business be valued? Based on the balance sheet? profits, future cash flows? Some independent valuation?
These are not technical details but the very essence of tax policy.
There is also the middle class issue. If the threshold is set too low, for example at EUR 1-2 million, it can include people whose largest asset is their residence and a second property. If it is put at EUR 10, 20 or 50 million, it is indeed limited to a very small group of very wealthy citizens. The selection of the limit therefore also determines who will actually pay.
This is why the attitude of the government and PASOK is a question.
The New Democracy could make an extremely simple and politically effective move: to agree in principle that tax justice is a legitimate objective and to ask Mr. Tsipras for numbers.
«What's the limit? What's the tax base? How many are it about? What's the factor? How much revenue will you collect?»
Why doesn't he do it with more intensity? The New Democracy may not want to appear to be politically defending the very rich against a proposal that, as a slogan, may have a great social impact. I am saying perhaps because at least one significant portion of the population has been convinced that it is about producing wealth rather than taxing. But the ND in this way (non) reacting lets its political opponent determine its own agenda. Instead of turning the debate from «We tax the rich» in «How much exactly will you collect and from who?», remains in a defensive confrontation.
Even greater is the question about PASOK. As a direct competitor of Tsipras in the centre-left area, it should be what would first of all require a specific tax justice plan. PASOK has talked about tax justice and new sources of revenue and has submitted individual proposals, including on bank profits taxation and dividends taxation. But other individual tax interventions and another specific tax on large-scale net property.
The result is that Mr. Tsipras today has an understandable political message, and his opponents for some inexplicable reason not to force him to turn it into a numerical plan.
But the debate on tax justice is too serious to run out of slogans.
Mr Tsipras's proposal attempts to combine: less burden on work and entrepreneurship, greater burden on accumulated wealth.
But the difference between a political slogan and a political proposal is chaotic.
If Mr. Tsipras wants to prove that this is not just a message of attracting the left audience, let him present a painting:
Property limit – number of taxpayers – total taxable basis – tax rate – expected revenue.
Then we can all judge.
Until these numbers appear, one could claim that the phrase «We will tax the great wealth» It remains a more political slogan to unspoken voters, rather than a comprehensive economic proposal.
And the fact that New Democracy and PASOK do not force him decisively to present these exact figures is perhaps the most inexplicable element of today's political confrontation. Instead of fearing the slogan, they should insist on drawing, tax base and costing.
Because at the end of the day, taxation, as well as the economy in general, we need to know who you want to tax, how you want to tax him, how you tax him and ultimately how much and within how much time you estimate to collect them.
And then we enter chapter two. Describe in detail how you will distribute these extra specifics you collect.
* Basil Kozobolis is a professor of Ophthalmology at the University of Patras
