Italians start tax raids

[Tamas]

This story brightened my day.  Thanks Shaun.

Well not mine.  Not Cortina.

Cortina was awesome.

[Syt]

An interesting statistic I came across, some years ago, in The Economist..........according to Italian tax records the average Italian shoe shop sell two pairs of shoes a year 

I've watched a long running shoe shop documentary, and it seems credible.

[Admiral Yi]

What do you mean?

The ostensible purpose of this raid was to eventually increase tax collection.  What's the next step on the path from point A to point B?

I would think conspicuous consumption works as a flag to focus investigative resources, but that they still need evidence of income to prove tax evasion.

[Sheilbh]

The ostensible purpose of this raid was to eventually increase tax collection.  What's the next step on the path from point A to point B?

I would think conspicuous consumption works as a flag to focus investigative resources, but that they still need evidence of income to prove tax evasion.

I don't know.  I've no idea about Italian law.  I'd guess it's much like anywhere else and there'll now be tax investigations, audits, probably some deals and some prosecutions. 

More important though is trying to change the culture.  It needs to become clear that tax evasion won't be tolerated and may well be discovered - hopefully the effect on businesses in Cortina can be replicated in individuals and across Italy.  That's the benefit of these targetted high-publicity swoops is that they get on the news.  If you had all of these investigations spread all over Italy it may have the same immediate effect but it wouldn't get on the evening news, there'd be no stories about the government cracking down on tax evaders.  Because of that there's less chance people would decide to voluntarily report just in case.

I suspect this is the first of several steps to make the 'rich' pay.  Monti's first steps of austerity such as freezing pension indexation were perceived as falling rather heavily on the poor and the middle class.  It's important for governments to give the sense that, as Cameron used to say, 'we're all in this together'.

[Iormlund]

So they found that Signori 22,000 Euros owns a Ferrari.  What next?

They spend six million euros dragging them through the convoluted legal system as Signori 22,000 Euros and all his compatriots spend 10k euros each bribing their way out of it. In the end, the state nets a loss.

If it works like over here they won't need to bribe anyone.

I've got a couple friends at our IRS. They tell me it is quite easy to find evidence of tax evasion (about 200k € average each case). The problem comes when the government tries to get that money back. The culprit is insolvent, assets are in someone else's names, etc. In the end the money is rendered unreachable by any kind of loophole imaginable.