Tax Break

Who said tax is boring?

La dolce vita

A headline on the front page of today’s International Herald Tribune caught my eye: “Fighting anti-tax mind-set, Italy deploys new tactic: Shame”. Given that this was Italy and that Italy is populated by Italians, the first thing that crossed my mind was, “Yeh..Shame they got caught”. On viewing the accompanying photograph of a class full of  angelic children being instructed to -metaphorically- educate their parents in the moral imperative of  double-entry bookkeeping , I felt that I was probably not far off the mark.

The article does not pull any punches in discussing the disease of rampant and almost overt tax evasion in Italy (it is claimed that 604 airplane owners declared annual income under Euro 50,000 ) but it was a comment of the director of the internal revenue service that was most interesting.

He compared the US and Italian systems. While he claimed that taxation in the US had originated in the far west to pay for the defense of the community, in Italy the first forms of taxation were imposed by princes, often foreign, to finance their battles – with the citizens getting nothing in return. As a result tax evasion became part of the culture right up to the present day.

Got it. Historically mobile morality. I can just see the conversation between two  plumbers fitting a new bathroom in the center of Rome: “Guiseppe, have they agreed to pay cash?” “Of course, Giovanni. I told the owner that your ancestors had their house swiped by the Borgias and he told me he had no problem with paying under the table as he was descended from the Medicis who hated the Borgias – that was a nice bit of luck.”

At the end of the day, however, perhaps these genetically conditioned tax evaders are ahead of their time. With new prime minister Mario Monti’s Euro 30 billion austerity package Italians might be looking once again at being required to pay taxes without getting much in return as the amounts collected are used to pay off  debts to foreign “princes”.

Machiavelli wrote in “The Prince”:”When neither their property nor their honor is touched, the majority of men live content”. That may have been true 500 years ago but, if the Euro crisis is to be solved, let’s hope those schoolchildren make their parents see sense.

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