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DEBTOR NATION

Chapter 1 ♦ AIRMAIL FROM AFTERLIFE

1976

One rainy summer day, I packed my backpack and went to America. I was seventeen. I knew what I was doing: I was escaping from the debacle at home. And I was looking for something. For what exactly, I didn’t know, but I’d go look for it in America. There, the heat burned in my nostrils. Lawns were brown. Cars were big and air-conditioned. Girls went gaga over my accent. Guys thought I was cool. And I fell in love with it all.
          Three years later, I was paying my way through college in Texas when the notion of home, distant and convoluted as it had become, blew up with gratuitous violence. A Boeing had crashed into a mountain in Turkey, killing all 155 people aboard. I heard about it on the radio. But I didn’t connect the dots.
          A few days later, I found a message from the operator in my campus PO Box. Telegram, call Western Union, it said. I called from one of the pay phones. My heart was pounding in my temples, and I had trouble hearing the lady on the other end.
          “I’d read it to you,” she said. “But it’s in German. I think you better come by and get it.”
          “I’m fixing to go to work. Can’t you try to read it to me?”
          “Oh dear.”
          “Is it long?”
          “Two lines.”
          “Can you spell it?”
          “Well, I guess I could. Are you ready?”
          I pulled out a notepad and pen. “Ready,” I said, though I knew that I wasn’t ready, that I’d never be ready for whatever she was about to spell.
          “E-L-T-E-R-N new word,” she said, “A-M new word M-O-N-T-A-G new word M-I-T new word F-L-U-G-Z-E-U-G new word I-N new word D-E-R new word T-U-R-K-E-I—”
          “Stop! Please.” I couldn’t write anymore. Parents on Monday with plane in Turkey.... German sentences, even in abbreviated telegram style, had the main verb at the end, but I didn’t want to hear the main verb, didn’t want to hear it spelled out letter by torturous letter. “Thank you. That’s enough.”
          I’d escaped the debacle at home and had gone as far away as possible. But this wasn’t what I’d had in mind. I stood there in a daze, brain deadlocked, numb, clutching the receiver, drowning in abysmal emotions.
          Then I went to work. It was just a part-time job, but now I needed the money more than ever. Afterward, I drove to the Western Union office and picked up the yellow slip of paper with twelve lines of all-caps alphanumeric gibberish and two lines of readable text. It was from my sister, sent from the town where she was staying with friends. But it didn’t include their phone number. And my brother was on vacation somewhere. So there was no way to reach him either.

Next....

TESTOSTERONE PIT, the novel

Wolf Richter

Chapter 1 ♦ Circle Jerk

It was Saturday, the biggest day of the week, and everyone was working bell to bell, over forty salesmen, though Ferronickel didn’t know exactly how many he had because some hadn’t shown up and might have started selling cars some other place, and because he’d hired a bunch of new guys an hour ago.

“It’s a beautiful day,” he sang in a basso profundo voice as he marched across the showroom in his asymmetric gait. He was the general sales manager at the Ford Superstore. His Tabasco Sauce tie was loosened, his collar unbuttoned. His gut that hung over his belt strained his shirt. He had puffy eyes and was full of mean energy, ready to explode, ready to force things to happen. He blew out the door, came to a halt on the porch that surrounded the showroom on three sides, and lit a cigarette.

Al Millikin, one of his four sales managers and perhaps the best closer in town, was watching Mad Boxer work a customer on the truck lot. Potential deal.

“Why can’t he bring that guy inside and write him up?” Ferronickel said.

“He ought to tell him we got free pussy on the showroom,” Millikin said.

“Don’t give me any ideas for our next live remote.”

“Come to think of it, that would be a hell of a lot more effective than the classical rock-and-roll shit we’ve been doing.”

“For our male customers.”

“We could alternate. Free pussy one day, free Godiva chocolates the next. We’d have both ends of the spectrum covered.”

“You’re a fucking Einstein, Millikin.”

Reginald Pierce, another sales manager, a big guy with a shortish Afro, was jumpy and his eyes darted about. He fretted about Whacker Packer, Hackman Jones, JoAnn Delouche, and several other salesmen who’d formed a dope ring by the plate-glass window. If left alone, they’d make up rumors, complain about dealership coffee, and infect each other with morale problems. He singled out a young guy.

“Freddie T, are you going to participate in a circle jerk?” he growled. They called him Freddie T because of his unpronounceable Greek last name. “Or are you going to sell something?”

It startled them; they’d forgotten all about selling. And they drifted apart.

Lou Massago gesticulated on the phone in one of the closing booths. He wore a white button-down shirt, a red and blue tie, slacks, and ostrich-skin boots. A scar curved upward from the right corner of his mouth, giving him a lopsided grin even when he was serious. His eyes were set close together and peered out from under his bushy eyebrows with ferocious intensity. But he had a soft voice when he wanted to, and now he wanted to because he was talking to a customer about a 15-passenger van that had come out of the rental fleet. There were ten of them. They were scratched and dented and had too many miles on them, and they were overpriced, and no one could sell them, but he was king of sales, and if he could sell them, it would prove he could sell anything.

He hated working the phone. He needed his customers in front of him, needed to stare into the whites of their eyes. But no one had sold any of those vans yet, and to prove he was king of sales and could sell anything, he’d decided to sell them all. Besides, the Saturday rush hadn’t begun yet, and calling old customers was more productive than standing around waiting for something to happen.

Next....

Wednesday

Feb292012

Final Spasm: Greco-Teutonic Tax Wrestling

Wednesday, February 29, 2012 at 8:48PM

In Germany, the top personal income tax rate of 45% kicks in at €250,000 ($330,000). The next step down, 42%, kicks in at only €54,000 ($71,000). It’s squarely aimed at the middle class. People who belong to a religious organization pay an additional "church tax" that the Ministry of Finance redistributes. Other taxes are piled on top. And when the hapless German taxpayer spends money, the value added tax of 19% comes due. Not surprisingly, tax fraud is a national sport. Yet, the German budget is nearly balanced.

In Greece, three-quarters of the independent professionals, such as doctors, lawyers, and engineers, declare taxable income below the existential minimum, according to a leaked paper by the EU Commission. Tax fraud amounts to about €20 billion per year (8.5% of GDP), and unpaid taxes amount to €63 billion (27% of GDP). Only a series of bailouts keep the country afloat: first €110 billion, now €130 billion, plus the debt swap of €107 billion. In total €347 billion—150% of GDP! And Germany is by far the largest contributor. For this mindboggling debacle, read.... Greece, “The Bottomless Barrel,” As Germans Say.

Both countries are also linked by some troubling polls. In Greece, 79% of the respondents said that Germany had a negative impact on Europe, 76% said that Germany was "rather hostile" toward Greece, and a third associated Germany with the words, Hitler, Nazism, or the Third Reich. A poll taken in Germany at the same time showed that 62% of Germans opposed the second bailout package, up from 53% in September, and two-thirds thought insolvency would be unavoidable.

So, in a bitter confluence of ironies, Germany will send 160 employees of its Ministry of Finance to Athens to help the government establish a more effective revenue collection system. Which is going to endear them even more to the Greeks. But as one of the conditions for the bailout billions, Greece must reform tax collections, and the Greek government made an effort to appear serious: with much media hoopla, it rounded up 100 tax evaders. Immediately, the effort smacked into reality: the court system.

The paper Kathimerini laid out the astounding problems. If you get wrapped up in a misdemeanor case, you would pay a portion of the amount owed before you can get an administrative court to hear your case, but it's waived upon appeal. Then you proceed to a first instance court—where a monumental backlog delays the hearing by three to four years. Once the court makes its decision, you can appeal it. Three years delay. Then the appeals court ruling can be appealed to the Council of State. Two years delay. Total time elapsed: a decade. In a misdemeanor case.

You can get up to three years in prison if amounts owed exceed €150,000. But you don’t need to go to prison if you don't want to. You can instead pay some money and be done with it.

If it’s a criminal offense, a prosecutor takes the case to a criminal appeals court. If the court is not in session at that moment, you’re freed after paying a portion of the tax debt. A court date is set for 6-10 months down the road. If your lawyer can't make it—and why should he or she be able to make it?—the date is moved out a year. The law doesn’t allow two such suspensions, but they occur. Eventually, there may be a trial, and you may get five or more years in jail. But if you have no criminal record, the sentence is suspended. Just pay court costs. If you’re condemned to pay a fine, it’s usually quite small. And it “is passed on for collection to the tax authority, where it is paid, if it is paid, in installments,” said law expert Takis Kousais.

Most defendants settle with the tax authority and pay the first installment to get out from jail. So, not exactly a deterrent. How 160 German tax experts would reform this system, if they can’t even get their own tax-fraud issues under control, remains a mystery. But reforming the system is one of the many conditions attached to the actual bailout payments, and these conditions are the crux.

Luxembourg’s Finance Minister Luc Frieden said it out loud: "If the Greek people or the Greek political elite do not apply all of these conditions, they exclude themselves from the Eurozone." Then he added crucial words: "The impact on other countries now will be less important than a year ago." And that has been the strategy all along. Read.... Firewalls In Place, Markets ready: Greece Can Go To Heck.

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Reader Comments (2)

The church tax is on the amount paid as income tax and not on the income.

I agree with your post, but you don't offer any solution for this mess. The way forward for the Greek is to have a simple flat-tax system with severe punishments and then set up elected tax courts to deal with the tax cases swiftly. Russia had a success with flat-tax and severe enforcement after their default. I have a post about what Greece should do to get out of the mess: The Day after Tomorrow in Greece -- http://appliedphilosophy.wordpress.com/2012/02/08/day-after-tomorrow-in-greece/ -- that shows effective tax rates for Greece.

March 4, 2012 |

anonemiss

Agree, Greece needs a simple enforceable tax system. The problem is enforcement. As the most egregious tax cheaters are at the top of Greek society, and they're the ones making the rules, enforcement with teeth is unlikely to happen. It's much easier to ask for bailouts and run up the deficits. Same in US and Japan, BTW.

March 6, 2012 |

Wolf Richter

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