"I hate cruise passengers! They ruin our island!" Sennen said in an unusually long and harsh diatribe this morning. "I feel like everyone is here just to serve them. We even go into our house so they can feel like people live in these cute houses that are here for their pleasure!"
I'm not sure why he snapped, but I think it was that there were a number of cruise passengers at Nektar where the kids' work and because Eirini was busy with a crowd of prospective customers, she told the kids she would pay them Monday instead of today as scheduled. It's not like Sennen has bills to pay or a loan shark breathing down his neck (so far as I know), but he was expecting payday and he's become very anti-cruise this year – so I think this was the final straw.
We talked about how cruise passengers bring people who like and care about like Eirini good business. We want Eirini and Allesandro to do well. So many people on Patmos make the most money of their year this month – so we should be supportive. Besides, that money Eirini pays the kids with money she earns at least in large part from cruise passengers. So, how harsh should we be?
This led to the understandable conclusion that Sennen would rather come to Patmos for the first half of the summer when it's less busy. Likewise, he would like to stick around for September when it's nice – although that's not an option. Sennen just really loves Patmos life.
Yesterday on my notary visit to the Customs Office, what the Customs-notary man piqued my curiosity and got me thinking. When he said Greeks pay a lot in taxes to receive certain guaranteed public services, my first reaction was that Americans pay a lot in taxes without receiving much back. I grew up with the idea that Europeans taxed their citizens heavily to support bloated welfare states while Americans paid less in taxes, staying scrappy and as a result, better able to afford things like insurance and healthcare costs. That said, most Americans I know feel like they're worried about keeping up with all their mounting costs – especially because of inflation – but even before that. Living the lifestyle I grew up with feels more and more expensive.
So, I wondered, what is the gap between the Greek way and the American? Greeks making in excess of 40,000 euros per year pay 44 percent income tax. There are additional contributions for Social Security and a Solidarity Tax (a nice name for a tax levied during Austerity to bring the Greek budget back into line) that ranges up to 10 percent for earners of 220,000 or more euros per year.
That's a lot of tax. A professional with a good job can expect to give up close to half of their income.
The American system may have some higher brackets ranging up to 37 percent, but few if anyone actually pays those after deductions and tax shelters. The American system has a lot of mechanisms. Maybe the Greek one does too – I wouldn't know.
I do know many businesses prefer to receive cash and will even give discounts because it can be hidden and thereby keep their taxes lower. I also know Greek property taxes are MUCH lower than most US metropolitan areas and for better and worse, homeowners insurance is not required – nor is it expensive. Some of our larger tax expenditures are not emphasized in the Greek system, not even in Delta Delta Delta.
That said, if we assume everyone pays their nominal taxes in both countries, Greeks take home less, but in essence pay some critical bills through their payroll deductions including health insurance, healthcare services (ie there are no copays or medical bills remaining after insurance reimburses its portion), college tuition, childcare, parental leave, garbage service and apparently notarization. Access to islands are subsidized by the government to ensure ferries run even at times of year when ticket sales wouldn't support it because those ferries are people's access to the world and vital supply lines to the islands. The Greek version of Social Security pays out a much more livable wage than the American. People can retire off their public benefits more safely than they can in the US and there are special unemployment programs for seasonal workers – of which Greece has a lot.
The question as I learned it growing up is who would you rather have controlling your money – you or the government? Because that tax differential used by you could be put to far better work and improve your wellbeing better. It's very Ronald Reagan and there's truth to it. If we each put out money into good market investments or paid off lingering debt – we could advance ourselves economically at a better rate than the government might do for us.
One interesting and hidden difference between Greece and the US – and I've seen this also in Bali and Singapore – Greece has a much higher percentage of homeowners who own their homes outright. Greece has a roughly 70 percent homeownership rate with 63 percent of those owning their homes free and clear. The United States has a 65 percent homeownership rate of which only 40 percent own their homes outright.
Eliminating the overhead of housing costs is a huge financial liberator. You can afford to part with a larger percentage of income if you have no mortgage or rent payment. And if you can rest assured you won't get chased by medical debt or need more than you can afford for your kid's college tuition – or put your kid into debt to get a college degree, you might be more willing to pay that higher tax rate.
Moreover, homeownership changes the nature of financial instability and poverty. Greece is similar to Bali in that it is common for families to own land and for that land to be used to house multiple generations. At least on Patmos – but in much of Greece I believe – the father of a daughter is supposed to provide a house to a newlywed couple. When a father lacks additional land, it's not uncommon to either build an additional structure on his existing land or to build a multi-family dwelling. On Patmos, multi-family units are fairly common and house entire extended families, each part with their own apartment or duplex. In Bali, family compounds are the norm. Homelessness is practically nonexistent because the family property is always there, even if a couple doesn't break out on their own – which they frequently do not and in most cases wouldn't want anyway.
Obviously, the US works quite differently and single individuals and nuclear families having their own dwellings is the standard – making housing a much bigger part of people's expenditures and creating greater opportunity for homelessness and destitution.
Singapore hybrids these models – making it so the state builds affordable condo blocks, a state-created bank helps finance mortgages for new homeowners and people's employment withholdings can be used in part to help fund the downpayment on their first home. In essence, the government plays the role of the Greek father/father-in-law. The result is 90 percent homeownership with stunning social and economic results. This more than any kind of law enforcement is central to Singapore's low crime rate.
When I get things like free notary services or when I took Matheus, our former au pair, to the health center where he got free medical treatment – it's easy to see the appeal of more socialist systems. Equally, when I lived in Singapore where benefits are more directed by the government, but funded for themselves by private individuals' own contributions rather than from the public tax-base, I could feel the benefits of government-negotiated drug prices, affordable public transportation, reasonably priced healthcare services. Singapore focuses more on the government controlling costs than providing from the public coffers – but the net result is similar: there's stability and security.
In America, I don't feel – and I don't know many people who do – that the government provides me a sufficient safety net. Or simply that I can see my tax dollars at work. Around Los Angeles, even roads and freeways are frequently bumpy terrain. LA Unified which gets almost double the money per student of my kids' school district performs poorly in most of its schools. If I call the DMV I have to wait for several hours for someone to call me back – although not having to hold anymore is a nice improvement.
I may not pay 44 percent of my income in taxes, but I don't know where the 20-odd percent I pay goes. Probably to the military which is the one thing I can point to and see we're clearly ahead of other countries. My municipality – The City of Westlake Village – actually yields return. I can see the nicely paved roads, pleasant biking and walking paths, beautiful parks, strong policing and summer concerts in the park. But I'm not paying that through my income taxes.
The more I travel – and even more the longer I live abroad – I can see America's system largely yields an ineffective middle ground when it comes to taxation. We neither produce the kind of value with our tax money that countries like Greece, Sweden or France do for their citizens – where it's easy to identify what people get from their government in exchange for their taxes – nor are we as innovative as Singapore to use government to help people to help themselves. Numerous presidential candidates have talked about imposing cost controls on Big Pharma to reduce drug prices given how much cheaper the same medications are in other markets. That has yet to happen.
Life feels more expensive and less safe.
I'm not sure what the answer is. I had half a minute where I was hopeful Elon Musk might actually help with government efficiency. There are clearly things American government does not do effectively – we don't seem to get the bang for our buck that other countries achieve. Only random slashings don't improve systems. They may reduce expenses – but they hobble and destroy systems – often creating more confusion and worse results. We need to thoughtfully ask fundamental questions about what we're trying to achieve and if what we do is really the best way to achieve our goals. We need organizational evaluation and possible restructuring – and we probably need to study other models for ideas.
Whether it's taking more of Greece's path, or more of Singapore's – it would be nice to feel like my taxes buy me something. Even a government service as effective and clearly value producing as 911 is funded through user fees on my phone bill, not my income taxes.
Greece is far from a model of great government. It does happen to be in a fairly centrist political period – which is amazing in the world today – with budgets that conform to what the EU requires. In other words, it's doing okay – which is big progress from sixteen years ago when it entered economic crisis. Given how crazy the world feels right now, I'm not sure "doing okay" isn't good enough for now. And we can hope for better days ahead for Greece, America and the entire world.
