Alexandra Kassimi describes what it takes to start an online store in Greece. You know the place where people have no money, jobs or prospect of employment.
“Most stores begin operating after receiving only the approval regarding their brand name, as the bureaucracy involved takes such a long time to complete that it is simply impossible to keep up with the operational costs, such as paying rent on obligatory headquarters, without making any sales,” said Antonopoulos.
Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector’s office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.
AdvertisementOnce they climbed the crazy mountain of Greek bureaucracy and reached the summit, they faced the quagmire of the bank, where the issue of how to confirm the credit card details of customers ended in the bank demanding that the entire website be in Greek only, including the names of the products.
Nothing in the story makes sense until you finally understand that the store is there — as is everything — to keep the bureaucrats involved. The health inspector, fire department, the regulated banker, the tech who literally analyzes the s**t. They are who the online store is supposed to support. They are what the economy is about.
The business model is for the bureaucracy to take their cut up front, in the processing of permits A, B, C, D … in case the business goes bankrupt. And if by any miracle it actually manages to make money, there is still the prospect of taxes or payments to avoid making taxes. Ultimately Greece will kill business. It already has.
But that’s because it doesn’t understand business. Unlike America, where the Associated Press carried a story on President Obama’s new industrial policy. It would tax some industries at a higher rate than others. “Economists note that Obama’s plan would upturn the very playing field the administration says it wants to level.” But, the President’s supporters counterargue, the tax breaks go the “right” businesses. Not that it hasn’t been that way for a long time.
The loophole-riddled U.S. tax code now benefits numerous industries over others. One tax break, for example, lets oil companies write off drilling costs immediately instead of over time, as most businesses must.
In the end, different industries can pay far different effective rates. The Treasury Department says U.S. utility companies pay an average effective tax rate of 14 percent. By contrast, retailers pay an average 31 percent.
The administration says the point of its tax plan is to make the system fairer and more efficient — not to squeeze more overall tax revenue from corporations.
All President Obama is doing is rearranging the deck chairs, never noticing that the ship supporting it is plunging beneath the waves. Ultimately the practice of picking “winners and losers” is what government industrial policy is all about. It turns the economy into a system that works based on not about what you know, but who you know. Jacob Sullum complains:
As long as we have leaders with this kind of overblown faith in their own knowledge, wisdom, and competence, we will have “a tax system that’s a complex, inefficient, and loophole-riddled mess.”
It is however, as good for lawyers and lobbyists as the Greek system is good for bureaucrats. It works very well. The only argument is over what “it” is.
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In the end, different industries can pay far different effective rates. The Treasury Department says U.S. utility companies pay an average effective tax rate of 14 percent. By contrast, retailers pay an average 31 percent.
What this statement ignores is that the government highly regulates utilities, up to and including the prices they may charge.
“…the store is there — as is everything — to keep the bureaucrats involved…”
Anyone ever buy a house and look at the details of where the closing costs go? It makes the commercial garbage disposal industry in New Jersey look like a paragon of virtue in comparison.
And when they do a refinance on the same house – here we go again. A friend of mine asked why with his refinance they were paying for another title search on the same property. “Well, maybe it was done wrong the first time.” they replied. To which he responded, “And if you screwed up the first time then why should I have to pay you again?”
I am sure that much of the distress over the collapse of the real esate market has to do with the many pointless fiefdoms, public and private, who are no longer getting their regular piece of the action.
Overall, one wonders why we tax businesses at all. Isn’t that just taking the seed corn off the table? The stuff we reinvest to expand and create jobs.
Why is it better that way than just taxing people who obtain wages, dividends, gains, etc?
When they speak of allowing business to repatriate offshore money, wouldn’t this help those little dollars gain citizenship again?
The reason to do another title search on a refi is to insure that in the case of foreclosure the lender can get first position. If since the original purchase a mechanic’s lien, a private loan using the property as collateral has been recorded, or other persons added onto the title, etc, any of these can force the bank to take second position such that they can only recover whatever is left after the first has collected.
Epi @ 3: “one wonders why we tax businesses at all”
Come on, you know the answer to that! It is to hide the tax burden from the people who actually pay all the taxes, i.e. the people themselves.
Besides, if the Political Clique did not tax the money away from evil business, those bloated corporate pigs would probably just use the people’s money to send their wives & children to Aspen on the kind of extravagant ski-ing vacation that most of us can only dream about.
W- “Nothing in the story makes sense until you finally understand that the store is there — as is everything — to keep the bureaucrats involved.”
On it’s most benign level that is true and that level is not very benign. But for Obama and his ilk of the Chicago Machine there is a deeper reason – kickbacks and payoffs. The new pay to play system being crammed down our throats by Obama, the Left and with an assist from the Institutional Republicans is designed to reward only those who pay the vig – all those who don’t are to be crushed.
It has nothing to do with “leaders with this kind of overblown faith in their own knowledge, wisdom, and competence”. It has to do with the insatiable desire to be in charge…to give orders…to rule! Power lust is all it has ever been about.
The problem really is that there’s not enough downside to being a petty tyrant bureaucrat.
In many states, monopolies and very generous concessions are granted to certain businesses through the state government, frequently by politically appointed Public Utilities Commissions.
In addition to being granted monopoly for a wide geographic region, many are GUARANTEED A SPECIFIED RATE OF RETURN… “profit,” that is.
The other side of that coin is that these utilities companies can be publicly owned and traded, so Aunt Dorrie is able to purchase and own shares just like the State Employees Retirement Fund.
The original thinking seems to have been that it would have been redundant and wasteful for a number of private companies in the same territory to be setting up competing power generating stations, transmission lines, pipelines, fuel depots, and working out optimal distribution grids, delivery schedules, maintenance, inspections, and so on.
Yeah, sure. Like having a fat monopoly doing all those things somehow guarantees lean, thoughtful, responsible efficiency.
My@$$…
We need a legal doctrine, maybe by Amendment or treaty, that no one has to obey an order from someone who is bat sh*t crazy.
“But actually, he thought as he re-adjusted the Ministry of Plenty’s figures, it was not even forgery. It was merely the substitution of one piece of nonsense for another. Most of the material that you were dealing with had no connexion with anything in the real world, not even the kind of connexion that is contained in a direct lie. Statistics were just as much a fantasy in their original version as in their rectified version.”
Remember that story the other day about how hard it is to open an ice cream parlor in San Francisco? It is all Greek to me and this is our Big Fat Greek Country!
dg @ 9: The original thinking seems to have been that it would have been redundant and wasteful for a number of private companies in the same territory to be setting up competing power generating stations, transmission lines, pipelines, fuel depots, and working out optimal distribution grids, delivery schedules, maintenance, inspections, and so on.
Water suppliers, roads – what if every community had three sets of roads, red, blue, and yellow, and you had to buy separate monthly subscriptions for each that you wanted to use? So the idea of “natural monopolies” is founded. You can also see pictures of Manhattan circa 1890 (I think), with crazy cobwebs of power and phone lines like nobody’s business.
That was the excuse for AT&T for about three generations, but they got so old and creaky that MCI came in and broke their principle, and now we typically have a dozen telecoms available at home, and it seems to work (although in downtown areas we’ve had situations were ten different fiber companies have to dig up the same street, one after another!) We’ve never had monopoly gasoline suppliers, though I believe Mexico did (or does?). I even own a few shares of Con Ed.
Sooo, … competition is good, and even a little sanctioned monopoly is a form of competition, as long as you don’t get carried away by it.
The problem with Greece (and here) is when the rent seekers come in, which is typically easier on The People’s facilities. Pretty soon it’s all parasites and no prey.
At my dads house you either wormed the cow or the worms killed the cow. This old country is looking pretty unthrifty to me and we need a real good dose of wormer, SOON.
One of the real problems in this country is that the courts give the parasites a say and thus you cant reduce your parasite load nearly enough; refrenceing the unions in Ca. that got the legs. to pass a law that cities couldn’t declare bankruptcy without legs. approval. Parasites need no say if we are to be effective.
Just bought a (another) house. Put down 65% of the $500K price. Went after a mortgage at 3.5% for the remainder, thinking that was a smart move. Wife and I both have substantial, 7-figure bank accounts, 5 other properties owned, high credit scores. Bank required three year tax records on 2 of my businesses, tax records for my wife and myself for past several years, records of insurance policies on all properties owned, explanations of why previous properties were sold, residency records, etc, etc ad nauseum. The paper stack approached 4 inches. Last night we threw in the towel on the loan and bought the place with 100% cash. Thank you Chris Dodd and Barney baby.
D @ 15: The paper stack approached 4 inches.
That don’t sound right to me. Loan application was not with one of your regular banks, perhaps? In spite of your current liquidity do you have some glitches on the record, a short sale, anything, in the last five years?
While my actual knowledge of this is remarkably small (given that I’ve spent years dealing with databases of mortgages in the aggregate!), my impression was that 40% down was pretty much the magic word these days. Or perhaps what you might have hit was SOP for a conforming Fannie or Freddie loan, and maybe a particularly dumb bank officer who didn’t know how to wave procedure (if there is such an option)?
The key to bank lending has always been to lend money to those who don’t need it, and you sound like a paragon case.
My wife & I have substantial 3-figure bank accounts, 5 other credit cards, good grades and a paid up library card.
JMH #8:
“The problem really is that there’s not enough downside to being a petty tyrant bureaucrat.”
I was thinking about that in an earlier post. The Harrisburg Mayor for Life, for example. What’s gonna happen to him? Nothing. Or the ones that signed the contracts that put Stockton into bankruptcy? Nothing. What happened to the people who would not allow the dots to be connected prior to 9/11/01? Nothing – except in some cases, more promotions. Or the ones that misinterpreted or outright faked the AGW and Ozone data? Or the Army officers who let Maj Hansen run around loose? Or the people that let out the crazy guy who shot the Congresswoman and all those others? Or the ones who hid/lost the data that showed the VA tech shooter was crazy? Note this includes members of the Earl Warren Supreme Court who ruled you could not keep the insane locked up. And so on.
Now the “leaders” of Bell, CA ….looks like they may be in the pokey for a while. But that is merely a statistical abberation.
There is lot to be said for the occasional torchlit necktie party held in honor of some public servants.
What do the parasites feed on when the host finally dies? Greece needs to know. The Eurocrats were hoping it would be Germany but the chances of that are fading.
Buck @ 19 – any organism that demonstrates robust vitality without communicable qualities must necessarily form spores that can be transferred to another host when we “step in it”. That’s one reason they where boots in Texas.
Wave the flag, but waive the regulations.
Wear the boots where you wish.