Deli, Y., "Taxing What You Cannot See: Hidden Income and Measured Inequality in Greece"

Title: "Taxing What You Cannot See: Hidden Income and Measured Inequality in Greece"
(co-authored with Fotis Delis, Joint Research Centre of the European Commission, Stamatia Ftergioti, Aristotle University of Thessaloniki, Theano Kakoulidou, Economic and Social Research Institute and Trinity College Dublin) 

Speaker: Assistant Professor Yota Deli, University College Dublin

Host: Assistant Professor Georgios Manalis & Assistant Professor Ioannis Kospentaris, Department of Economics, Athens University of Economics and Business

Room:  76, Patission Str., Antoniadou Wing, 4th floor, Room A41

Abstract: We examine how the structure of the Greek personal income tax affects measured inequality when a large share of income is not declared. We reconstruct the income distribution and the full tax computation for 2013 to 2023 from the tax tabulations the tax authority publishes every year, and validate them against an administrative sample of tax returns matched to the social security registers for 2015, 2017 and 2019. We find that the self employed earn 1.84 times what they declare, and that a further 1.2 to 1.75 billion euro is earned by self employed who declare nothing, a margin that no multiplier on reported income can reach. On the distributions as declared, the personal credit delivers two thirds of the redistribution the income tax does, and the presumptive income floor moves the distribution by more than the income tax itself.