Seven months after the EU bailout
Greece is still struggling to formulate a fiscal policy that doesn't
hinge on selling non-existent
olives. How can the country's economy move forward? By looking to the
past, writes Financial Times columnist John
. Specifically, to Rome and 17th-century France. Explains Plender:
collection has, in the past, been one of the most corrupt functions in a
dysfunctional Greek state. So the present government's forecasts of
much increased revenue have met with scepticism. It may thus be time to
consider a wacky but nonetheless practicable proposal--to reform the
collection process by introducing, on an interim basis, tax farming.
Plender acknowledges the collection method has a less-than-stellar two thousand year track
In the Roman empire it gave rise to abuse because the
private individuals who made an upfront payment to the state in exchange
for the right to collect tax mistreated the citizenry, to bolster
profits. Augustus and Diocletian had to curb such abuses. The same
problem arose in 17th and 18th century France, where tax farmers were
the biggest employers after the army and navy. Many of their employees
were paramilitaries with the right to search households on the mere
suspicion of evasion.
These powers were so abused that tax
farmers were intensely hated. In the French Revolution many were
guillotined, including Antoine Lavoisier, the father of modern
chemistry, who financed his scientific research from his activities as a
tax farmer and banker.
But all guillotining aside, this could
be just what Greece needs. Centralized tax collection, as Plender notes, works only in places "where
the state is reasonably efficient." Greece is not that place. Letting
the private sector "bid for the right to collect taxes in a competitive
tender process" could hardly result in fewer collections. And if
doesn't work out, there's always that France thing.
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