Italy proposes tax on savings hidden in safety deposit boxes(reuters.com)
reuters.com
Italy proposes tax on savings hidden in safety deposit boxes
https://www.reuters.com/article/us-italy-politics-budget-idUSKCN1TD0G5
10 comments
Am I correct in saying that another way to view this is a 15% fee to launder all of your dirty money in a risk free, government endorsed way?
Wow... the entire article is 4 sentences (each with their own paragraph). Doesn't have a thing about how they plan on enforcing the tax.
15% > 0%.
15% > 0%.
> Those who voluntarily declared their deposit-box holdings would be taxed at a low rate of about 15 percent, he added.
In what world is a wealth tax of 15% a "low rate"?!
In what world is a wealth tax of 15% a "low rate"?!
This is about enticing tax evaders to come clean. The 15% rate supposedly includes back taxes on some forms of undeclared income.
Knowing the official Italian tax rates, that would make it a very compelling deal. Many tax evaders would basicly be taxed at a much lower rate than had they paid their taxes correctly in the first place.
Knowing the official Italian tax rates, that would make it a very compelling deal. Many tax evaders would basicly be taxed at a much lower rate than had they paid their taxes correctly in the first place.
First income tax bracket in Italy is 23%. In Spain I think I'm paying a bit less than 30%.
https://europa.eu/youreurope/citizens/work/taxes/income-taxe...
https://europa.eu/youreurope/citizens/work/taxes/income-taxe...
Has to be 15 % of the normal tax or something like that. Wealth tax in Italy is rather low, so 15 % of that would probably be more like 0.1 %.
That's low in Italy where the we are used to 50% taxes.
Not on wealth, you're not.
Assets sitting in a safety deposit box are wealth, not income. Wealth taxes, where assessed, are typically low single digit percent or sub-1%.
Assets sitting in a safety deposit box are wealth, not income. Wealth taxes, where assessed, are typically low single digit percent or sub-1%.
This isn't about wealth. They say in the news that they are talking about undeclared income hiding in safes.
Ah, so it's an income tax evasion holiday (or dirty money cleaning service fee).
Article positioned it like it was a wealth tax (that would apply to legitimate savings as well as ill-gotten gains in safety deposit boxes).
Article positioned it like it was a wealth tax (that would apply to legitimate savings as well as ill-gotten gains in safety deposit boxes).
Some European country tax 90% of income...
Yeah, and all americans have guns and ford f150. /s
https://tradingeconomics.com/country-list/personal-income-ta...
https://tradingeconomics.com/country-list/personal-income-ta...
Even the US had a 94% tax rate on income over $200,000 in 1944 and 1945:
https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
Mind you - at the same time it looks like the UK had a comparable taxation rate of over 99%.
https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
Mind you - at the same time it looks like the UK had a comparable taxation rate of over 99%.
Reaching 90% is hard, even if you count additional taxes. Take Sweden, where you first remove 31.42% social tax, then 60% income tax, then 25% VAT. You will still end up with 24% of money left of the initial payroll.
If I make a sale in Norway for 100 NOK:
Business VAT: 20 spent (20 %) 80 NOK left.
Income tax: 39 spent (max ~49 %) 41 NOK left.
VAT on purchase: 8.2 spent (20 %) 32.8 NOK left.
67.2 % taxes.
If I spend my money on gas/diesel then I would have ~16 NOK of value left. (84 % taxes)
About 18 % of the income tax I'll get back during my pension.
So 90 % is probably achievable on some things in some countries.
Business VAT: 20 spent (20 %) 80 NOK left.
Income tax: 39 spent (max ~49 %) 41 NOK left.
VAT on purchase: 8.2 spent (20 %) 32.8 NOK left.
67.2 % taxes.
If I spend my money on gas/diesel then I would have ~16 NOK of value left. (84 % taxes)
About 18 % of the income tax I'll get back during my pension.
So 90 % is probably achievable on some things in some countries.
You are not spending the first 20 NOK of your sale, you are just collecting them from the customer. If VAT was 0% then your sale would be for 80 NOK.
Sure I am. If I didn't have to collect VAT then I could sell for 100 NOK instead.
It's not my money, but I still have to bill for it and pay it. The customer doesn't get a better product or service because of it.
It's not my money, but I still have to bill for it and pay it. The customer doesn't get a better product or service because of it.
If the customer didn't pay the VAT, they'd end up paying their taxes some other way and still have less money to spend on your products.
> Some European country tax 90% of income...
This is untrue.
This is untrue.
If I make a sale in Norway for 100 NOK:
Business VAT: 20 spent (20 %) 80 NOK left.
Income tax: 39 spent (max ~49 %) 41 NOK left.
VAT on purchase: 8.2 spent (20 %) 32.8 NOK left.
67.2 % taxes.
If I spend my money on gas/diesel then I would have ~16 NOK of value left. (84 % taxes)
About 18 % of the income tax I'll get back during my pension.
So 90 % is probably achievable on some things in some countries.
Business VAT: 20 spent (20 %) 80 NOK left.
Income tax: 39 spent (max ~49 %) 41 NOK left.
VAT on purchase: 8.2 spent (20 %) 32.8 NOK left.
67.2 % taxes.
If I spend my money on gas/diesel then I would have ~16 NOK of value left. (84 % taxes)
About 18 % of the income tax I'll get back during my pension.
So 90 % is probably achievable on some things in some countries.
Huh? Why are you accounting for VAT twice? Either you consider that the business 'pays' the VAT or you 'pay' the VAT, you don't get it both ways.
It is both ways, for me. My business pays VAT on sales, and I personally pay VAT on purchases, so for me and my business VAT will be paid twice. Both for what I sold and what I(personally) purchased.
Either the consumer is paying the VAT or the business.
You can't say that the business pays the VAT when you are the business, but the consumer pays the VAT when you are the consumer.
If you frame it as you "personally purchased" something and paid VAT, then what you sold as a business to someone else was "personally purchased" and had the VAT paid by them too.
Source? European, never heard of this. Though a 15% rate is pretty normal around here.
Income tax? Sure. Wealth tax? No, of course not, then investments would basically never be a good idea.
It's existed in the past.
Look up the lyrics for the Beatles song "Taxman", "There's one for you, nineteen for me".
Look up the lyrics for the Beatles song "Taxman", "There's one for you, nineteen for me".
I recall income tax over 110%. It was author in scandinavian country.
70% is pretty normal if you count all compulsory insurances.
70% is pretty normal if you count all compulsory insurances.
That seems unlikely. Work and earn 100, and owe the government 110; or dont work / earn 0, owe the government 0?
Being net negative for productivity is literally counterproductive.
Being net negative for productivity is literally counterproductive.
The accepted answer explains why that is not a tax over 100%.
That's marginal tax rate. Many people pay an effective marginal tax rate of more than 100% if you include government programs like social housing. In fact, when you earn around €2200/month here, it is possible to end up with net less than if you don't work at all, due to various programs.
This isn't even a tax. Here's the dictionary definition: "A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions." (google)
Taxing is adding a cost to an existing transaction, not taking a cut of money arbitrarily. The idea of a wealth tax is literally the government just stealing money. The American government, for instance couldn't do this. We had to pass an amendment to allow income tax; there is no such amendment for "wealth tax". This is a result of Pollock v Farmers' Loan and Trust Co., which affirmed the government directly stealing wealth is unconstitutional. If you'd rather call it theft or confiscation, fine, but not a tax.
Most importantly, we've got the Fifth Amendment: "nor shall private property be taken for public use, without just compensation". This means that you could only impose a "wealth tax" if you convinced a court to rule that ninety-nine cents was just compensation for a dollar.
I guess we're just moving closer to "the mob" seizing the property of others, just because its constituents want it more.
Taxing is adding a cost to an existing transaction, not taking a cut of money arbitrarily. The idea of a wealth tax is literally the government just stealing money. The American government, for instance couldn't do this. We had to pass an amendment to allow income tax; there is no such amendment for "wealth tax". This is a result of Pollock v Farmers' Loan and Trust Co., which affirmed the government directly stealing wealth is unconstitutional. If you'd rather call it theft or confiscation, fine, but not a tax.
Most importantly, we've got the Fifth Amendment: "nor shall private property be taken for public use, without just compensation". This means that you could only impose a "wealth tax" if you convinced a court to rule that ninety-nine cents was just compensation for a dollar.
I guess we're just moving closer to "the mob" seizing the property of others, just because its constituents want it more.
> This isn't even a tax.
It's a variation on wealth taxes. If the dictionary doesn't consider that to be a tax, then the dictionary definition is wrong. Notably, that definition also seems to imply that property taxes aren't taxes, despite them being millennia old.
> This is a result of Pollock v Farmers' Loan and Trust Co., which affirmed the government directly stealing wealth is unconstitutional.
That is a horribly misleading summary. Pollock said a tax on rental income is effectively equivalent to a tax on the property itself, and since property taxes are direct taxes, such taxes must be apportioned to the states according to population per the Constitution. (Hence why the 16th amendment, whose sole purpose was to overturn Pollock, refers to "income, from whatever source derived, without apportionment among the several States").
Most notably, the Constitution explicitly refers to this kind of tax using the word "tax," and explicitly permits Congress to levy this kind of tax (albeit with some conditions), so your assertion that this kind of tax is not a tax is flatly contradicted by the people who wrote the basic instruments of the US government.
Not to mention that the US Constitution hardly matters at all when discussing the ability of Italy to levy taxes on its own citizens and residents, unless Italy became a US state in the past few days...
It's a variation on wealth taxes. If the dictionary doesn't consider that to be a tax, then the dictionary definition is wrong. Notably, that definition also seems to imply that property taxes aren't taxes, despite them being millennia old.
> This is a result of Pollock v Farmers' Loan and Trust Co., which affirmed the government directly stealing wealth is unconstitutional.
That is a horribly misleading summary. Pollock said a tax on rental income is effectively equivalent to a tax on the property itself, and since property taxes are direct taxes, such taxes must be apportioned to the states according to population per the Constitution. (Hence why the 16th amendment, whose sole purpose was to overturn Pollock, refers to "income, from whatever source derived, without apportionment among the several States").
Most notably, the Constitution explicitly refers to this kind of tax using the word "tax," and explicitly permits Congress to levy this kind of tax (albeit with some conditions), so your assertion that this kind of tax is not a tax is flatly contradicted by the people who wrote the basic instruments of the US government.
Not to mention that the US Constitution hardly matters at all when discussing the ability of Italy to levy taxes on its own citizens and residents, unless Italy became a US state in the past few days...
>I guess we're just moving closer to "the mob" seizing the property of others, just because its constituents want it more.
Well, the law is either what some people want to be or what a majority/plurality of people want to be.
The first is not very democratic and can be self serving for the private interests of a few.
If the latter however want a wealth tax, or even if they propose that "90% of wealth should be made public" then that could be made into law, regardless of what the constitution says.
That wouldn't be "mob" but just law.
In fact, the "Fifth Amendment" is already an amendment, showing that the constitution is already not a un-alterable source of divine guidance.
At some point, perhaps the whole of the constitution could be considered a BS product of its own time, and replaced with a different set of operating rules.
Well, the law is either what some people want to be or what a majority/plurality of people want to be.
The first is not very democratic and can be self serving for the private interests of a few.
If the latter however want a wealth tax, or even if they propose that "90% of wealth should be made public" then that could be made into law, regardless of what the constitution says.
That wouldn't be "mob" but just law.
In fact, the "Fifth Amendment" is already an amendment, showing that the constitution is already not a un-alterable source of divine guidance.
At some point, perhaps the whole of the constitution could be considered a BS product of its own time, and replaced with a different set of operating rules.
what is desired by a majority/plurality of citizens is pretty much orthogonal to justice.
Actually it's the very definition of justice.
That's how justice was developed and has always worked since day one.
Aside from hearing God voices, we don't have any other.
It's just that in our days we pretend that we have some "specialists" discussing the finer points.
But something without the people behind it it's not justice, just like something without a power to enforce it it's not law.
When somebody says "What the majority considers justice is not justice" they really only say "My arbitrary idea of justice is better than other people's".
As a cultural thing, justice is only what the culture (shaped by the people) considers as such.
(One could only argue about what's more useful (utilitarianism) but that also needs a commonly defined desired outcome and a somewhat agreed upon utility function).
That's how justice was developed and has always worked since day one.
Aside from hearing God voices, we don't have any other.
It's just that in our days we pretend that we have some "specialists" discussing the finer points.
But something without the people behind it it's not justice, just like something without a power to enforce it it's not law.
When somebody says "What the majority considers justice is not justice" they really only say "My arbitrary idea of justice is better than other people's".
As a cultural thing, justice is only what the culture (shaped by the people) considers as such.
(One could only argue about what's more useful (utilitarianism) but that also needs a commonly defined desired outcome and a somewhat agreed upon utility function).
I'm not going to claim that I have a better definition for justice, but aggregate opinion seems like an especially poor one. if the majority ethnic group in some country democratically votes to exterminate some minority group, is it just? I could more easily accept the claim that "justice" doesn't exist than that I would be forced to recognize positively that a genocide was just.
>If the majority ethnic group in some country democratically votes to exterminate some minority group, is it just?
For them it is. In Germany during the war what they did wasn't considered unjust (like in the South during legal slavery). And if the majority on earth agreed, it would be considered a-ok (like before countries started abolishing slavery, when it was just a normal thing for most peoples all over the world).
We do have some escape hatches from "it's just what most say it is", but those are based on religious and cultural ideas (including "scientific" conceptions of justice in the latter camp).
I think in the end: justice as an operative thing is what most people say it is (it can't be anything else). But there's also some common shared sense of justice, not well defined and not easily enforceable at all cases (e.g. one couldn't enforce it in WWII Germany), but which contains a core of the only universal notion of justice (don't cause harm without reason, don't kill, don't steal, etc).
For them it is. In Germany during the war what they did wasn't considered unjust (like in the South during legal slavery). And if the majority on earth agreed, it would be considered a-ok (like before countries started abolishing slavery, when it was just a normal thing for most peoples all over the world).
We do have some escape hatches from "it's just what most say it is", but those are based on religious and cultural ideas (including "scientific" conceptions of justice in the latter camp).
I think in the end: justice as an operative thing is what most people say it is (it can't be anything else). But there's also some common shared sense of justice, not well defined and not easily enforceable at all cases (e.g. one couldn't enforce it in WWII Germany), but which contains a core of the only universal notion of justice (don't cause harm without reason, don't kill, don't steal, etc).
You're forgetting the effective "wealth tax" of inflation that hurts everyone across the board, except for those favored interests with access to the newly-printed money.
Of course, the effects of inflation are felt most strongly by the poor and those on fixed income, for whom the rising cost of basic goods means that their meager income purchases less and less each year.
Of course, the effects of inflation are felt most strongly by the poor and those on fixed income, for whom the rising cost of basic goods means that their meager income purchases less and less each year.
That dictionary definition was probably written in a place that doesn't have a wealth tax.
Even that dictionary definition misses property tax, which is surely a tax.
Even that dictionary definition misses property tax, which is surely a tax.
I believe this means that the 49M euros Lega has to re-pay back to Italian Fiscal agency (https://www.theguardian.com/world/2018/sep/06/italys-league-...) are not stored in a safety deposit box.
How will they enforce this? Manually opening ever safety deposit box? I know at my bank (probably all of them?), you need my key and the bank key to open a box.
Are they going to request every single person go to their box, open it and show it to the tax man?
Are they going to request every single person go to their box, open it and show it to the tax man?
Are they going to give you advanced notice of these bank box inspections? There's no way anyone would remove property to avoid a tax of course.
>There's no way anyone would remove property to avoid a tax of course.
I'm not sure if you're being facetious but people with something to hide will just get a safe deposit box in another country. It's like a one day drive to cover all of Italy and let's be honest here, most of the safe deposit boxes that suddenly need emptying won't be in the south.
I'm not sure if you're being facetious but people with something to hide will just get a safe deposit box in another country. It's like a one day drive to cover all of Italy and let's be honest here, most of the safe deposit boxes that suddenly need emptying won't be in the south.
> most of the safe deposit boxes that suddenly need emptying won't be in the south.
But aren't the powerful illicit crime organizations all in the south? Or are all of the ill-gotten gains laundered elsewhere?
But aren't the powerful illicit crime organizations all in the south? Or are all of the ill-gotten gains laundered elsewhere?
Sometimes I forget how small European countries are.
I thought only income could be taxed? If you have valuables just sitting there, how can they be taxed? Obviously if you sell them there might be capital gains, but not before?
> I thought only income could be taxed?
Due to some kind of international law against taxing property? There’s no such thing.
Have you never heard of property tax, land value tax, etc?
Other things that aren’t income that are taxed that you’ve surely heard of include value added tax, sales tax, window tax, television tax, you could go on forever...
Due to some kind of international law against taxing property? There’s no such thing.
Have you never heard of property tax, land value tax, etc?
Other things that aren’t income that are taxed that you’ve surely heard of include value added tax, sales tax, window tax, television tax, you could go on forever...
Property taxes, stamp taxes, wealth taxes, import/export taxes, sales taxes--these are just some of the common kinds of taxes that are imposed on things that aren't income.
This is income tax. They are talking about people with hidden/undeclared income in safety boxes instead. It's an opportunity to legalize your money. Quite a steal (ha!) mafia and tax evaders can legalize all their black money paying a measly 15%, when regular workers probably have to pay more.
Just to confirm, the first income tax bracket in Italy is 23%. Seems like it really pays to be a tax evasor.
https://europa.eu/youreurope/citizens/work/taxes/income-taxe...
https://europa.eu/youreurope/citizens/work/taxes/income-taxe...
That's how most tax currently work, but some have and do include wealth taxes which which tax a percentage of your total assets. Elizabeth Warren's tax proposal includes adding one which would tax assets above $50m at 2% per year and assets above $1b at 3%.
Wealth tax
... ... can you hear it? That is the sound of billions of EUR leaving Italy. When will they learn?
Yes, Italy really has some weird political problems.
Alto Adige is extremly wealthy, so is the North of Italy, like north of Milano, I think. Down south it all gets worse, I've heard. I wonder why wealth and industrial power is so concentrated in the North.
For Germany this can be explained with bombings during WW2, which flattened parts of Western Germany nearly completely while sparing the South, and with the structural problems after splitting Germany.
But I think Italy wasn't bombed that heavily nor was it split at some time like Germany.
Why can't they manage to distribute this wealth better and get their problems in control?
Alto Adige is extremly wealthy, so is the North of Italy, like north of Milano, I think. Down south it all gets worse, I've heard. I wonder why wealth and industrial power is so concentrated in the North.
For Germany this can be explained with bombings during WW2, which flattened parts of Western Germany nearly completely while sparing the South, and with the structural problems after splitting Germany.
But I think Italy wasn't bombed that heavily nor was it split at some time like Germany.
Why can't they manage to distribute this wealth better and get their problems in control?
As Italian I could try to give you an explanation about the difference between North and South Italy.
Basically it derives from the unification process, during the last part of 19th century. Someone thinks the South payed more in this process. Someone else argues that it depends on economic and political differences present before the unification. North was an ensemble of little states, South a large state related to Spanish monarchy.
Mind-boggling amounts of corruption (for a western country) as well as various mob related issues that are concentrated in the south. Historically, Italy has had (and arguably still does) poor transport infrastructure, so being in the northern part of the country is closer to the rest of Europe.
I have a very simple explanation - geography and climate. The north has cold winters, if one does not work hard they will freeze and starve. Hard work is embedded in the region for generations. In the south you won't freeze in winter, so you don't need to prepare fuel in summer, life has been slower and does not demand as much of hard work to survive. The summer heat in the south also inhibits the activity somewhat, and north may have a tad easier access to trade... I believe these two factors - geography and climate - have a prevalent influence on the development of all societies anywhere in the world.
Given that it would be literally hidden away in a strongbox before nothing of value would be lost to Italy anyway. It wasn't in their economy anyway and a lack of stashing more away is kind of mission accomplished even without the amnesty tax yields.
From people who don't pay taxes? Good riddance!
It doesn't apply to legitimate savings.