Mitsotakis Government / 4 out of 10 faced with poverty – Incomes for the rich increased

Almost 4 out of 10 Greeks are facing poverty at a time when inequalities are widening and the richest in Greece are receiving a larger share of the GDP “pie” during the days of the Mitsotakis government. According to the relevant analysis of IOBE, the bottom 40% of the population paid 1.63% of total taxes in 2021, being in the two lowest quintiles of income, which are defined by incomes up to 6,098 euros. It is worth noting that the poverty threshold, according to ELSTAT’s categorization for 2021, amounted to 5,712 euros per year for a one-person household and 11,995 euros for households with two adults and two dependent children under the age of 14.

At the same time the poor got poorer and the rich got richer. Increased levels of income inequality are observed compared to 2012, since the bottom 20% earned just 0.2% of the total income (compared to 1.4% in 2012), while the highest 20% earned 58.7% of the total income (versus 52.6% in 2012) of Greece. In essence, the richest part of the population increased their incomes in the midst of crisis, unlike the poorest part. IOBE, making use of the publicly available data of the Independent Public Revenue Authority (AADE) on incomes and taxation of natural persons and comparing the year with the most available data (2021) with the oldest data available (2012), reports that the declared incomes (real incomes from all sources) in 2021 compared to 2012 were lower by 7.2%. Also, by dividing the population into quintiles, it includes for 2021 a 20% in the lowest income quintile, which includes those with incomes up to 1,016 euros. The top 20% includes those with an income of 19,312 euros and above.

Inequalities are a problem

According to IOBE, the Gini inequality index estimated by the World Bank ranks Greece 57th globally for 2021. Given that the tax system in Greece is progressive (ie tax rates increase as income increases), it is not surprising that the fact that the total tax burden is increasing, partially smoothing out inequality, the Institute emphasizes. According to IOBE, the degree of progressivity based on assessed taxes is also remarkable, since the bottom 40% of the population paid 1.63% of total taxes, while the top 20% paid 76.84% of total taxes.

Incomes for the rich rose

Furthermore, “increased levels of income inequality are observed compared to 2012, since the bottom 20% earned just 0.2% of total income (compared to 1.4% in 2012), while the highest 20% earned 58.7 % of the total income (compared to 52.6% in 2012) of Greece”, as the IOBE study states, and adds: “There is a corresponding increase in the taxes payable, with 60% of the population paying only 4, 3% of total income taxes, while 20% of the population pays 81% of total taxes. In conclusion, the economic crisis that the country went through had a negative and significant impact on citizens’ incomes and the impact has not yet been overcome.”