Re: Cash still rules in Spain
 

Where that argument falls down is that in the UK with as you say a generous welfare system the ones paying the tax other than the NHS get very little from the welfare system even when they fall on hard times. I think you have to face up to the fact that not just Spain but other southern European countries have a culture of beating the tax man. I am not saying it only happens there but it seems to be more in the culture than the UK.

Re: Cash still rules in Spain
 

You've never heard of child benefit and tax credits?

These are things most British families receive. In Spain, you get nothing

Of course the culture and attitudes are different, I am offering an explanation about why this is so

Re: Cash still rules in Spain
 

Again, I argue that trust in government is a prime metric, but as a result of government's behaviour; taxes, regulations, etc...

If government is perceived to be primarily serving itself; imposing silly rules, unnecessary fees, bureaucracy, and unnecessary taxes on the population; wasting tax money on self-serving projects; small businesses being penalised whilst Goliath businesses get all the breaks; leaders consistently involved in corrupt activities...

...all while the average family increasingly struggles to get by...

...Well, then people won't feel any moral obligation to follow the rules, and will evade the system as much as they can get away with.

Here's an interesting Edelman study that shows that governmental trust is dropping almost everywhere - but particularly in the Eurozone.

here's another interesting study:
Driving factors in shadow economies
Interestingly, the trust data is somewhat consistent with the size of the shadow economy in those countries.

http://www.dw.de/image/0,,18230532_401,00.png

Re: Cash still rules in Spain
 

Well of course I have heard of them but not all have children do they? Tax credits are silly anyway why tax people with one hand then pay it back with the other far easier surely to have fair taxes to start with? You were explaining it by spinning it to excuse why countries like Spain seem to have this culture of tax avoidance.

Re: Cash still rules in Spain
 

How can you have data for shadow economies. Pretty useless data in my opinion:thumbdown:

Re: Cash still rules in Spain
 

Haven't the EU started to use such data to assess a country's income hence why the UK had to pay more into EU coffers a while back as they took into account illegal activities such as prostetution and drug dealing etc? I may be wrong?

Re: Cash still rules in Spain
 

:goodpost:

Re: Cash still rules in Spain
 

...as though this is some sort of made-up secret that nobody really knows about.

Here's a few basic ways to achieve a reasonable sense of the levels of shadow economy: Volume of cash transactions, volume of cash in banks vs. in public pockets, percentage of population with bank accounts, debit cards, and volume of bank transactions and cash withdrawals weighted against local economic data (shop purchases, investments, private building work, tax declarations, collections, public coffers, etc), numbers of unemployed obviously living beyond the means of their benefits or other incomes, personal interviews... yada yada...

If merchants in a local area declare a total of €100m in sales, but the local economy produced €72m in total income, well, then something's amiss, innit?

Of course a 'real' statistics-gathering organisation would go far beyond these basic metrics, gathering and comparing many more relevant metrics, and test their data against the real-world before offering conclusions...

Re: Cash still rules in Spain
 

Not sure, but people will moan about any tax they have to pay. The people who don't pay tax, are then surprised why services are getting worse. Getting rid of cash can certainly help in the future.

Re: Cash still rules in Spain
 

Yes agreed but it only works if policed otherwise pointless.

Re: Cash still rules in Spain
 

Still pretty useless data per country, because the local merchant in Greece might have sold 10 t-shirts to foreigners. The foreigners who bought the t-shirts could have withdrawn cash from where they come from and not from a cash machine in Greece.

Re: Cash still rules in Spain
 

That's true, but there's a risk/reward factor. When taxes and regulations are strangling, the reward for evading them is high. If you can save a fortune or dramatically streamline your ability to make a little money; people will be more inclined to not declare this or that, do an unofficial cash business, ignore a few regs, etc.

However, if the bureaucracy is low or reasonable, regulations are reasonable, and taxes are lower, then the reward just isn't worth the risk. May as well just do everything on the up & up.

And getting rid of cash will only make it easier to impose higher taxation and more regulation. The EU wants to impose a worldwide tax-scheme so there's no competition for tax revenues. Nowhere to go. Pay what we say, or get penalised, you criminal.

If it weren't for cash, and jurisdictions that impose lower tax ('tax havens'), you can be confident that we'd all be paying 70% income tax and 40% VAT. After all, making us all poorer is for the "common good".

Re: Cash still rules in Spain
 

How a countries tax system works is a different story and just because you get rid of cash doesn't mean we'll all be paying more and have the same tax rates. Of course you need a good government to make it work, but you can get better services for less money and reduce crime.

Re: Cash still rules in Spain
 

Europe already comprises the single most tax-based econom(ies) in the world. The European tax system funds nearly 40% of member states' GDP. That's simply the basis of the system. And the lion's share of the tax burden is most heavily imposed on individuals and small businesses. The exact opposite of other, more successful economies.

Don't you find it curious that the one action that had historically achieved the greatest positive impact on economic growth is never proposed by any European political party or politician? (excepting the UK, which actually isn't really 'Europe' anyway, but that's another topic).

No wonder the EU wants to eliminate all forms of "tax competition" or 'alternative' means. The system is all but entirely dependent on tax collection. And in the event they ever achieve their goal, you can bet our economy will become far more tax-based than trade-based.

Re: Cash still rules in Spain
 

Where would those more successful economies be? People don't want to pay taxes, but expect the best health care system, new roads etc. We're pretty lucky to live in Northern Europe and have a high standard of living. We only have it, because we're paying taxes. People who are now moaning that they haven't had a salary increase and say services are getting worse, are probably the ones buying cheap products from China and avoiding tax etc.