Let's not get ahead of ourselves, of course. Greece is taking California-like steps in their attempt to raise "revenues." By that I mean cutting taxes on lower earners and shifting the burden upstream - like it or not, even California's most liberal tax redistributionsits have accepted that having the top 1% pay an out-sized piece of the budget simply leads to huge volatility down the road. They're also raising dividend tax rates, which will certainly scare off any new capital, other than the money Germany is about to lend. Decreases in lower income level taxes will be offset by passed-through higher taxes on offshore oil firms and excise fuel taxes.
Among the Greek fixes, reports Reuters:
The upper tax rate of 40 percent will be applied on annualincomes above 60,000 euros ($82,250), instead of the existing75,000 euro threshold
Incomes between 12,000 and 16,000 euros are to be taxed at18 percent, down from the current 24 percent tax on incomes from12,000 to 30,000 euros. This is intended to help low-incomeearners.Dividends will be added to incomes and taxed at theapplicable rates, meaning up to 40 percent. Currently, dividenddistributions are taxed at a flat 10 percent rate.Greek public sector workers will face a wage freeze acrossthe board this year, extending a freeze announced late last yearon those making over 2,000 euros a month. Seniority pay riseswill apply normally.The government announced a 10 percent cut in public sectorworkers' supplemental allowances, which are added to basicsalaries and currently constitute a large part of their totalincome.Public sector employees' gross income will fall between 1and 5.5 percent.Copyright 2010 AlphaNinja