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April 24, 2013
Jewish World Review
Nov 28, 2011
/ 2 Kislev, 5772
Italians entertain novel proposition: Paying their taxes
In Italy, tax evasion is somewhere between a folk art and a way of life. As a nation, Italians have given themselves generous cuts in their taxes by the simple expedient of not paying them.
The result is that the government loses out on $340 billion a year, about 21 percent of GDP, and that is a big reason the country faces a debt crisis. The Washington Post calculated, "If collected annually, that amount could pay back every last cent of Italy's $2.6 trillion debt in just under eight years."
The official figures would make even the Republican green eyeshades who calculate the bounty that would flow to the U.S. government from additional tax cuts suspicious.
Italy is the world's eighth largest economy yet of the 41 million tax returns filed in 2010, fewer than 1 percent -- 394,000 in a nation of 60 million people -- reported incomes of more than $135,000. Two-thirds of Italians reported incomes of less than $27,000 and half of those reported earning under $13,500.
For a long time, Italy's frustrated tax collectors got little help from their country. Recently departed prime minister, Silvio Berlusconi, even appeared to encourage tax evasion by joking about it.
But there are signs that Italy's tradition of "only fools pay taxes" could be changing under pressure from its eurozone partners and the threat of Grecian-style austerity measures and slashes in the public payroll.
Since 2009, the government has collected $13.6 billion in evaded taxes, a small step but perhaps only the beginning. Public opinion is turning against tax evaders and a recent poll, quoted in the Post, shows that 73 percent of the public is demanding sterner measures against cheats.
And they may get it. Their new prime minister, Mario Monti, is a serious minded economist. New laws imposed tougher penalties. Including mandatory jail time for the most serious cheats.
All-cash transactions are notoriously open to abuse so the government, according to the Post, is moving toward a "cashless" society were payments above a certain amount would have to be made by credit or debit card, check or electronic fund transfer, transactions that would leave a trail the tax collectors could monitor.
Over two millennia ago Caesar decreed that all the world should be taxed. Now his successors in Rome would settle for just the Italians paying theirs.
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