Free The Full Catastrophe by James Angelos Page B

quickly released and returned home. Riot police also returned to the island to escort the financial-crime investigators, who were checking additional establishments. One has to wonder what they were thinking, given that stealth is a requirement for such controls to bear fruit. Locals, it seemed, were amused the secondtime around. Teenagers snapped selfies with the riot police, and some Hydriots described a carnival-like atmosphere. The returning investigators found no other violations, locals told me, as if this proved local compliance with tax laws. The following day, the Greek press eagerly reported on the episode, and the news was covered in northern Europe too, where it was taken as further proof of Greece’s unruliness. A lot of locals found the unfavorable attention embarrassing. “It’s not nice for our little island to have police here,” the mayor at the time told me in his office, which was covered with Victorian-like portraits of prominent Hydriots. “You’re a Greek,” he added. “What you write has to be correct for our country so an ugly picture of Greece doesn’t come out abroad.”
    The controls were part of a broader government campaign to fulfill the central demand of its creditors: that the Greek government collect more taxes. Tax evasion in Greece was a national preoccupation. The pervasiveness of the habit, and the government’s enduring unwillingness to do anything about it, was more than any other factor the cause of Greece’s financial troubles. Had more Greeks paid their taxes, the country’s debt crisis may have been altogether avoided (assuming, perhaps unrealistically, some degree of responsible use of the hypothetical funds on the part of the government). But because the government had long allowed, even enabled, widespread tax evasion, it now faced the challenge of determining where to begin cracking down. One significant area of tax evasion involved the consumption tax on everyday purchases such as restaurant meals. While people deal in cash and off the books in order to avoid sales tax most everywhere, it was a particularly common phenomenon in Greece, where finding an offense of this type was like shooting fish in a barrel. The summer of the Hydra episode, the finance ministry, which, in addition to the police, conducted its own checks of restaurants and businesses in tourist areas, said it found violations at more than half of the some 4,000 establishments it visited, totaling 31,237 offenses. Theannual revenue loss from uncollected consumption tax in Greece amounted to 10 billion euros a year, according to a 2014 report by the European Commission, over 5 percent of its gross domestic product.
    Despite stepped-up enforcement efforts like the one on Hydra, however, people actually avoided the tax more as Greece’s economic collapse deepened. That is because consumers had less money to spend, which meant not only that they did not consume as much, but that when they did, they also made a greater effort to avoid paying taxes. The growing disinclination to pay also had a lot to do with the fact that a slew of other new taxes were being implemented around that time, such as a hefty property tax automatically tacked onto electricity bills as a way of trying to ensure payment; not paying the tax potentially meant getting your electricity cut. Greeks scornfully called the new property tax the
haratsi,
after a hated levy imposed by the Ottomans. The new and hiked taxes meant that many people’s overall tax burden was rising just as their incomes were plunging. Compounded with stepped-up enforcement measures, it all seemed unfair and heavy-handed to a lot of Greeks, particularly because many believed that, while the obligation to pay for the crisis was being loaded on them, enforcement measures did not apply to the worst tax evaders—the rich, the powerful, and the politically connected.
    The Hydra episode therefore sparked an emotional debate. Why should a humble tavern owner receive