The Quebec government is running a series of tv ads intended to discourage under-the-table transactions between consumers and vendors. For example, a homeowner carrying his infant daughter is seen speaking to his house-painter, who has just finished painting the porch. He asks the painter if he’ll accept cash without the taxes. The painter lowers his voice and asks the homeowner, “When your daughter gets sick and you take her to the doctor, how much does it cost you?”. “Nothing” replies the homeowner. “Who pays”, asks the painter. “Well, the government, I guess” says the homeowner. “Still want to pay cash?”, asks the painter.
These ads come in the wake of the biggest corruption scandal in the Province’s history, exposing construction industry kickbacks to government officials at all levels, and resulting in the resignation of two mayor’s (Montreal’s yesterday, and Laval’s any minute now).
The stark contrast of the tv ads and reality made me think of Greece. In Greece, corruption has been so entrenched and far-reaching, and for so many generations, that no one wants to pay any taxes and does everything in their power to avoid them. A few years ago, before the economic collapse, a friend of mine in Greece called his country the “richest poor country in the EU”, highlighting the extent of the underground economy.
Governments in supposedly highly regulated countries with strong governance, nevertheless need to be aware that there is a tipping point between the “acceptable” corruption that one may attribute to a small minority as an almost inescapable part of human nature, and the systemic corruption that we see today. Once the tipping point is passed, people lose confidence that their taxes are going to their intended purpose, and the slippery-slope of black marketing becomes more attractive.