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ATHENS, GREECE — The Greek election is Sunday, and the current conventional wisdom is that conservative leader Antonio Samaras is going to win by a narrow amount.”Private polls” (polls commissioned by candidates or banks on behalf of clients) supposedly show Samaras winning, and it seems that enough people have been scared into believing that a Tsipras victory would mean a Greek expulsion from the Eurozone, something that’s deeply unpopular here.
But the election isn’t over yet, and an extremely plugged in Athens resident gave me reason to think that in just the last 2 or 3 days, the momentum may have broken back towards Tsipras.
In the weeks surrounding an election, the process of tax collection grinds to a halt. No sitting government ever wants to crack the whip about collecting payments when it’s running, and generally, due to the uncertainty, nobody feels particularly motivated to get their payments in. But taxes will be due right after this election, and so people are going to their accountants now to start tax preparation.
Now it should be noted that the average Greek has a much more intimate relationship with their taxes than the average American. In the US, everyone complains come tax time, but for most people it’s a fairly uneventful process. They file electronically, and the money zips out of their account (usually out of their paycheck, actually) and that’s that.
But in Greece it’s not nearly so simple. Everyone uses an accountant, the tax code is incredibly complex, and you actually go to the tax office pay in person multiple times per year. The Greek bureacracy loves this, because in-person taxes means opportunities for bribes and kickbacks.
In the late 90s, Greece apparently brought in “Tax Rambos” form the United States IRS to teach Greece how to get better at tax collection (how to set up more electronic systems, and so forth) but the entrenched Greek bureacracy would have none of it, and nothing happened.
OK, so in the past several days people have begun preparing their post-election taxes, and they’ve been hit with sticker shock. The new austerity reforms have seen some major increases in tax bills for the average Greek… sometimes to the tune of 300-400%, according to one person familiar with the intricacies of it all.
This has got people particularly angry, and it could be this trend which causes people at the last second to turn away from Samaras with disgust, and vote for Tsipras.
It’s impossible to know, and nobody in the market can do anything about it at this point, but if Tsipras pulls out the victory, this could be one explanation.
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