How inequalities are consolidated over time

GRAZIA.TANTA@GMAIL.COM 10/2/2020 1
How inequalities are consolidated over time
The inequalities and impoverishment in 1995/2018 are
evident and are shown differently among the countries
on the Mediterranean coast more or less scrutinized and
intervened by the institutions of European/global
capitalism; mainly ECB, Eurogroup, European
Commission and, IMF
Summary
1 - How to manage an aviary
2 - Important indicators of social regression
3 - Comparison between the victims of the Troika
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1 - How to manage an aviary
The monopolyof state control by the political classisaninstrumentforthe reproduction of
the political class itself, of continued support to companies - especially the largest ones -
and also,a factor of segmentationandsocial stratification. The fragmentation of the fiscal
punishment- pointedout,asa rule,as just - evenwhenregressive- burdens,above all, the
lowestincome;sometimesthe costs of collection and control of tax evasion exceed those
of potential collection, which the political class classifies as a policy of… tax justice.
While income from work is scrutinized by the State, within the framework of its osmosis
with the financial system, income from capital is the subject of various and creative
instrumentsfortax reduction,for non-declarationof potentiallytaxableincome,forthe use
of offshores,of accountingasbusinesscostsforelementsof private-use- vehicles, travel ...
Social segmentationand the use of regressive policies for the realization of fiscal plunder
are opendoorsfor the wideningof inequalities.Note,forexample,the use of the maximum
VAT rate (23%) in the consumption of electricity, imposed by the Troika and which
continuestocalmlyburden all households, even though about six years have passed over
the ostensible presence EU / IMF zealots. On the other hand, Law 12/2008 of 2/26

abolishedmeterrental fees;but, shortly after, the chambers and the water and electricity
suppliersinventedothernamesto maintain a juicy recipe that, in the case of electricity, is
called "power rate". How much does it cost for public hospitals to be underfunded and
poorlymanagedsothat private ones,inthe contextof celebratedpartnerships, have more
and more users?
Thus,the fiscal punishmentismaskedinthe form of taxes stripped of class-based, neutral
prejudices, presented as shaped by technical aspects that mask all machinery aimed at
guaranteeing and expanding capital accumulation to the detriment of the common
population, especially those who live. of work. To this end, it is necessary to make
precarious,unstable,reduce the purchasingpower of those who work and make this mass
of people competitive,justasithappenswithchickens,whichare struggling,whenever the
time comes for the distribution of the feed. The feed is carefully measured so that the
chickens produce a volume of meat, increasing per unit of time or, produce a maximum
yield(meat) per unit of feed; as in an aviary, workers have no name and still lesser rights.
Thisharsh realityisdefinedby the think-tanks hired by the transnational corporations and
by the financial systemand,presentedfor publicity and commercialization by the political
classes,bythe managersof the State apparatus,witha greateror lesser show to (a) regret,
after the formals have passed. routines of social concerts.
2 - Important indicators of social regression
In capitalism, it is intended, naturally, that the function of work, of those possessing the
abilitytogenerate wealth,shouldincludeassistanceinforwardingthisadditional wealth to
the ownersof the meansof production(the capitalists) andtothe State,which,inturn, will
be in charge of using this surplus in a manner appropriate to the perpetuation of the
capitalistsystem;now,benefiting the accumulation of wealth in the holders of the means
of production, satisfyingthe multitude of non-capitalists,tomaintainorbuy their passivity,
essential for the system's perpetuity. Of course, it should be thought that partition this
surcharge in more general terms, it is necessary to pay due attention to the demands of
non-national capitalists, the global financial system, the indigenous political class, etc; a
partition that depends on the degree of subservience of governance, the softness of and
opposition, which is deeper in the case of geographical areas which are mere s runners
crossedthe logisticsnetworksof multinational andwhere there is efficient service laundry
money.
Taking statistical elements (Eurostat) for the 1995/2018 period, for the various European
countries,itisinterestingtocompare the evolutionobserved in that period, for four major
financial flows: central government expenditure, VAT revenue, revenue taxes on income
and property and the remuneration of employees.
Governmentsandpolitical classescollaborate incollectingthe tax burden from the general
population, taking into account the non-penalization of companies and so-called
entrepreneurs, because they are the ones who create jobs and wealth… bla, bla, bla; and
they will contemplate… the enormous and well-known humanitarian concerns, always

attentive tothe turningtowards“green”since thatdon’taffectthe accumulationof capital.
Obviously ...
Thus,public expenditure - here, restricted to that of the central administration of nation-
states - must necessarily increase, as is the prerogative of economism, focused and
dependentongrowth;or rather,a diffuse interweavingof mutually feedingvariables (GDP,
profits, taxes, investments, consumption, income, sales ...) which is, consequently, also
valid for municipal administrations or, of specific devices, such as Social Security.
The public expenditure includes the need to support and encourage investment, to
maintaina mildortolerable tax burdenforcompanies,subsidies, benevolent legislation so
that the capital will be attracted or, do not move to where the risk and the tax burden is
loweror even,null.Conversely,forcompetitivenesstoremainand for foreign investments
to entera country,laborlegislationpenalizingthose whowork,low wages(competitive, as
they say) and appropriate qualifications are required. In short, all the advantages for the
capital,all the burdensforthe work,havingas express,formal and synthetic objective, the
growth of the enigmatic GDP.
State expenditure is fueled, essentially by taxes and the use of debt. It is known that the
former is extracted from the population without any defined consideration - it is an
exception - andthe use of debtimmediatelygeneratesthe obligationtopayinterestand,in
the long term, a repayment. It is not difficult to see that the exaction is much more
favorable for governments than the use of debt. All state machinery or, better, a real
artillery - tax apparatus,executions,seizures,fines,retentionsand immense data crossings
that search the lives of the least favored population are imposed on those forced to pay
taxes. However, governments are tolerant of capital movements abroad or through
intramural tax benefits,eitherbybuildingformulas that do not prevent capital transfers to
offshores or, creative formulas to dissipate the traces of fraud and the perpetration of
financial crimes. or the laundering of mafia activities and their interpreters.
At the outset, it is not easy for a nation-state to cancel a debt it has incurred without the
creditor's consent. Similarly, nation-states incur debt, interact with the global financial
systemforthat purpose,withoutgivinganyinformationtotaxpayersabout the application
of the borrowedcapital; but,takingforgrantedthat the populationwill bearthe costof this
new debt, without questioning and, above all, without even having a sense of what
happens.
The proceeds of the loans are placed in a bottomless pit or diluted in the immense
machinery that constitutes the state apparatus. Governments act towards the bulk of the
population, like despots, without obligations to their subjects.
The graph below shows the evolution (1995 = 100) of salaried wages compared to VAT
revenue, income and property taxes and central government expenditure. For the
assessmentof policymakersfor the situation,we have addedbelow atable withthe dating
of governments during the aforementioned 25-year period.

The division of responsibilities by the various government gangs
1995 / Apr 2002 PS Guterres Jun 2011 / Oct 2015 PSD / CDS Passos
Apr 2002 / Mar 2005 PSD / CDS Durão / Santana Oct 2015/2018… PS Costa
Mar 2005 / Jun 2011 PS Socrates
Despesa da Adm. Central -Central Administration Expenditure Receita IVA - VATrevenue
Receita -impostos rendimento e propriedade Revenue - taxes on income and property
Remuneração assalariados - wages ofsalaried workers
In more detail, it can be seen that:
 In Portugal, the antisocial policy of all governments in the period 1995/2018 is clear:
VAT revenue doubles in 1995/2004 -05, there is an identical doubling for total income
and propertytaxes(1995 /2006 -07 ) and State expenditure (1995/2007 -08 ). However,
the total wage earners have only doubled their income after more than twenty years
(1995/2017);
 The total wages of salaried workers grew steadily until 2008, in the middle of the
Socrates consulate, stagnated until 2010, falling the following year, when the famous
“engineer” left (temporarily) the scene;
 Passos welcomed the Troika intending to go beyond the Troika itself; and starred in
wage cuts, freezes,redundancies,increasedtax burdenand, otherrascals,flatteningthe
ground in 2015 for Costa to enter the scene, ahead of the fabulous contraption;
 It shouldbe notedthatthe volume of salariedemployeesonlyin2017 reached the level
of 2010; and that in 2012 it was at the same level as 2005;
 The VAT revenue is the bone structure of tax revenue because it is almost neutral for
businessesandbrutallyburdensthe working population, with a high portion of income
appliedinconsumption,whichisextensiveandseverelyburdenedbyVAT;whichreveals
the role of the state apparatus in the plundering of the product of labor. VAT grows

regularlyoverthe governmentsDurão / Santanawith a rise of 17% to 19% in June 2002;
it has increased from 19% to 21% four months after the beginning of the Socrates
consulate in March 2005; and, finally, it stands at 23% on the first day of 2011, still
underthe baton of Socrates and his minister Teixeira dos Santos; what Passo s e Costa,
convenientlykeptivandwere contentedwith,quibbling miserably about the reduction
of some crumbs in the rate that affects electricity consumption - and that in the end,
even that didn't happen;
 However, even in the time of Socrates, VAT revenue stagnates in 2008 and undergoes
great variations, presenting in 2011 values not very distant from the collection of
2007/8. In 2011, raising the rate to 23% does not prevent a visible fall in state revenue
from the tax, taking into account the period of falling income and consumption,
following the application of the dictates of the Troika;
 As of 2014, VAT revenue evolved very significantly, allowing Costa and Centeno's
financial brightness, tripling in 2019, its value compared to 1995. And, as can be easily
seen,wideningthe differentiationof the evolution of the revenue of the VAT and labor
income;
 Followingthe previous point, it is revealing of the antisocial nature of the regime that
VAT revenue triples in a period almost equal to that in which labor revenue has only
doubled. The antisocial character of the post-fascist regime, in all its splendor, is
consistentwiththe reactionarynature of the dominantpartof the political classandthe
conservatismandineffectivenessof unioninstitutionsorso-calledleftparties,objective
accomplices of the punitive character of politics established decades ago.
 In the sectionof taxesonincome andproperty remainsa more marked growth than the
remuneration of employees exception of the years 2003/2005, a period that fits all,
practically, within Durão / Santana governments;
 Since 2006, the evolutionof thisgroupof taxeshasstronggrowth,withsome parallelism
face to registered for VAT and, in the dynamic more detached than the checks of with
labor income;
 The Troika and itsdual houseboysPassos/Portas promote, in 2013, a huge increase over
the previous year (about € 4,100 M, 29.3% up compared to 2012). 2013 revenue
remained at the same level until 2017 and, already in the Costa era, there was a
reasonable increase in 2018, which was more moderately replicated in 2019/20;
 As observed for VAT, taxes on income and property consolidate in the post- Troika
growthmarkedlyhigherthanthe evolutionof wage income. Clearly, in the wake of the
2008 financial crisisandthe intervention of Troika - with the subservient obedience of
the Portuguese political class as well as the stagnant union structures - a social
environmentwascreated leading to a greater precariousness in the lives of those who
do notbelongtothe political oligarchiesandeconomic - workers, unemployed, retired,
young people ...

 The central governmentexpenditure accompanyingthe marchof labor remuneration to
2002, surpassing the whole of last thereafter, especially after 2009. It follows for the
rest of the period, one increases evident cycle at the end of Socrates consulate (200 9
/2010), followedbyanincrease Anothersignificant co m monitoring the Troika steps of
operation (2012- 2014), with the intermediate break that placed 2012 expenditure at
the level of fouryearsearlier.There follows,inthe Costamanagement,aperiodtending
to reduce the bumpsthat stronglycharacterizedthe previous period; however, despite
the “excellence”of the magician Centeno, state spending in 2018 is at the level of nine
years earlier.
 As is evident, so much restraint, there was nothing virtuous about it. It reflected the
imposition of salary stagnation in the civil service; the degradation of the NHS - along
with the growing delegation to the private sector, especially the well-known public-
private partnerships; the mess of teacher teaching placements; unlike what happens
withthe armedforces,at the service of NATO although, without the capacity to defend
the territory, if it were to be attacked; a perfectly useless presidency of the republic,
which shone one ignorant till 2015, has been succeeded by an issuer of frequent
vacuities,suchMarceloRodriguesThomasorAméricoRebelode Sousa,whounderstand
the differences between the former fascist regime and the post-fascist of nowadays;
social security more geared to forgiving corporate debts, financing patronage as clever
as ignorant, than to improve the lives of pensioners; a judicial apparatus where
everything is jammed up, waiting for a prescription, especially when it stumbles with
great figures of the kleptocratic regime.
3 - Comparison between the victims of the Troika
We include in the designation “victims of the Troika” countries like Greece and Portugal
where in fact, the formal intervention took place and with rigor; countries, such as Spain
and Italy, where this intervention was less formal or invasive, taking into account the
political,demographicandeconomicdimensionsof these countries;and,excludingIreland,
where its financial difficulties resulted only from the rescue of Anglo- Irish Bank, whose
losses were quickly incorporated by the Irish State.
Behind, we incorporated a graph that, for the period after 1995, shows the evolution of
global elements for the Portuguese economy - state expenditure, VAT revenue, revenue
fromincome andpropertytaxesandalso,for the global volume of remunerations of work.
Then,we will observe,forthe five countries mentioned above, the comparative evolution
for each of the aforementioned economic quantities.
Relatingtogovernmentspending,Cyprus standsoutfromthe beginning,witha unique and
uncontrolled growth in the context of a depositary country of enormous mobsters capital
or, if you prefer, a laundry.
For the rest,the regularityof the evolutionof Italianpublicexpenditure stands out (it grew
only 56% in 1995/2018), in contrast to that of other countries; Italy was far from reflecting
the failures of the financial system in public management, which are visible in the rest -
Greece, Portugal and, Spain. In the latter, it is worth noting the great growth in public

expenditure until the emergence of the financial crisis, but less explosively in the case of
Spain, which is followed by a period of strong deceleration which, in the last year
considered,showsnotonlythe irregularityof the level public expenditure, such as the fact
that it is below the levels reached before the peak of the crisis. The social and financial
costs resulting from the growth in debt are known and, above all, felt.
In the case of Greece, the state's expenditure is, in 2018, at the level recorded in 2003,
which shows the huge flow of cuts, as well as the drop in the standard of living of the
Greeks.InPortugal,the level of 2018 approachesthatof 2009, whichis not yet observed in
the case of Spain.
State Expenditure
In general terms, Cypriot state expenditure has grown 3.7 times since 1995, followed by
Portugal 2.2 times,Spain1.9times,Greece withanincrease of 70% and Italy,justover 50%.
We continue with a similar approach for VAT and the same countries. Again, Cyprus
appearswithvalues that are gradually different from the rest of the countries included in
the graph, from the beginning of the century. Thus, VAT revenues, in the Cypriot case, in
2018, were 6.4 timeshigherthaninthe standard initial year(1995),against 3.3 times in the
case of Spain,2.9 timesforPortugal and 2.5 or 2.4 times,respectively for Greece and Italy.
Afterregularandsimilargrowthuntil the beginning of the century, with growing revenue,
particularly inthe SpanishandGreekcases,VATrevenue is placed (2007) at values close to
2.7 times that recorded in 1995. In that period, Portugal has less dynamism and Italy
demonstrates its relative regularity also in the growth of VAT revenue.
In the graph, in 2007/09, the negative impact on VAT revenue, in all countries, is evident,
withparticularhighlightsforSpainandPortugal,inthe latter case, the contraction induced
by the Troika is evident; as of 2012/13 VAT revenue is rising, with a more pronounced and
parallel tendencyforIberian countries. In 2013, Greece places VAT revenue at the level of

2004 and, even in 2018, the amount is still close to that of 2006. Spain and Portugal
successively achieve the highest volumes ever, from 2014 and 2015, respectively.
Value Added Tax (VAT)
In the chapter on income and property taxes, the relative regularity of their evolution in
Italy is underlined, which was only changed between 2006/2008 and 2017 through more
notorious additions; all of this in a plan to double revenue in 2018, compared to 1995.
All the othercountriesconsideredshow abruptandviolentchangesinthe levelsof revenue
from income and property taxes.
Cyprus shows a huge increase, almost a doubling of revenue between 2004 and 2008,
following a notable drop between 2002 and 2004; although with sudden and significant
variations, Cyprus presents the highest level of progression of these taxes, among the
countries considered.
The revenue growth shown by Greece is very marked, tripling its value in 2009 or 2012
compared to 1995; and that the Troika's performance will certainly not be strange. As of
2015, the level of these tax revenuesstabilizes at around 2.5 / 2.75 times the level of 1995,
withPortugal as the companythat reachedthislevel in 2013, during the supervision of the
Troika, with increases in the last two years.
Finally,Spainhasone of the lowestratesof progressionuntilreaching,in2007, the value of
2.5 timescomparedto1995, followedbya sharp drop until 2009. At the end of the period,
Spain shows itself as the country, of this set, with the lowest rate of growth of the set of
taxes on income and property (75% more than in 1995); it should be noted that Spain
resumedin2009 the level reached in 2004 after reaching an intermediate peak of growth.
Taxes on income and property

Labor wages evolved in parallel until 2001, with the difference between then being the
great rise in Cyprus for a decade and other increases, less marked in the cases of Greece
and Spain, situations that involute, respectively, in 2010 and 2009.
Labor wages
The breaks that followed are very uneven. In Cyprus, the volume of wages at work goes
from3.1 timesthe 1995 level in2011 to 2.6 timesthree yearslater,in the aftermath of the
financial crisis; from then on, the volume of remunerations rose significantly, reaching a
level slightly lower than in 2012.
Greece has the biggest drop in total wages for work; these corresponded, in 2009, to 2.75
timesthe value of 1995 and,only1.9 timesin2016, the indicatorgrowingagain,since then,
which has not happened since 2009.
In Portugal andSpain,the momentsof the beginningof the decrease inthe totality of work
remunerations took place, respectively, in 2011 and 2009; the period of decrease in the
mass of remuneration in Spain was four years (2009/2013), against only two for Portugal

(2011 and2012). Itshouldbe notedthat there is perfectparallelismin the evolution of the
total wages of the two Iberian countries, from 2010 as it had been happening until 2002.
Italy,witha steadyevolutionuntil 2011,stabilizesatthis level until 2016, after which there
isa growthinthe wage bill,placingitself withadynamicsimilartothatobservedforGreece
and, slightly below that registered for Portugal.
(to be continued)
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