The chutzpah of some of these so-called tech companies is just mind boggling.
- You need to do this.
= Nah.
- There's actually a law, you have to do this, like everybody else.
= We think the law is unfair, so we're not going to do this.
[Court] The law is perfectly fine, go away.
= "We are surprised and disappointed ... "
Hey I wanted to rob a bank...and despite advice to the contrary, I went ahead and did it, and now I am "surprised and disappointed" by being sentenced to prison.
Being tougher on deviance cannot produce a world without deviance. Any system will be gamed. It will only shift it around. The middle class fantasy of perfect law enforcement is a fruit of our own moral self oppression. Powerful, wealthy people don't live by rules, they live by personal relationships and any fiction to the contrary is mere propaganda.
The game here are the odds to get away with it, the reward and the punishment. The size of the punishment should be adjusted to discourage repetition. The size of the budget should be adjusted to the damage.
We still need a better formula for rich people to benefit from hunting down other rich people. Airbnb is harmful to real estate value in the area but drives up prices elsewhere. It creates fluctuation in rich peoples wealth.
It's very common to state 'bring solutions or shut up' but that is just a way to stop the conversation short. I made a valid contribution, pointing out that knee-jerk "tough on crime" responses to news of criminal behavior is not only naive but counter productive. I don't have to provide a fix for a deeply complex issue - class relations - to point out that grabbing the pitchfork is a reaction that is expected of the populace and used by the elites to keep us down.
What we should do, in my opinion, instead of crying out for tougher enforcement of laws, is to acknowledge that anti social behavior is a socialization issue, not a criminal issue. Punishment is self serving - I want to feel like those who exploit our good nature suffer for it. Cultivating higher morals is hard and won't change statistics overnight. But a world without corruption is a world without greed, not a world with harsh punishment for those caught stepping out of the line.
It’s a very common state to throw criticisms and theories with no solutions - it’s called “the bloodless intellect” - and since it offers no solutions and takes no actions, it is almost always the worst option. Granted sometimes a bad solution is worse than no solution, but the vast majority of times, no solution is the worst option. The only thing being a bloodless intellect protects is the ego of the person, because their identity is so tied to their intellect they dislike it when their theories are actually evaluated, because the chance that they might be wrong materialises, and that would damage their fragile ego and deeply associated self identity, so better to act snidy and offer no solutions than to offer something that might be wrong, and call into question their self identity.
I grant that you do make a contribution, a tiny, tiny one - because without action, your ideas will never be bigger than the few tiny brain cells they occupy.
Saying "its' complex, I dont have any solutions" is a cop-out, do you think if everybody did that the corperate tax avoidance and greed would get better or worse? Or do you think if harsher punishments are introduced and enforced it might make the executives who are in the grey area of activity think twice?
Compare more legal countries like the US with corrupt countries where this isn't enforced (e.g. Pakistan) it's clear that enforcement and the threat of punishment vastly helps mitigate corruption, and while there are no absolute silver bullets, threats of punishment are good for keeping the "lawful evil" in line, because it forces them to factor punishment into the risk equation, which otherwise, is only about profit.
> your ideas will never be bigger than the few tiny brain cells they occupy.
Woah calm down man. You're taking this personally and turning to insults? That's not acceptable. Suppressing discourse unless accompanied by a plan of action is just a sure fire way to get demagogy and harsh plans that just make things worse like the endless "harsh on crime" mess of putting people in jail for decades over joints.
Besides, Legal America has been committing war crimes and abetting corruption across the globe for decades so get out of here with this spectrum of bs of yours.
It was not an insult at all, I was being literal. Ideas without action do only occupy a few brain cells (and nothing else) and brain cells are tiny. It's a Arnold Glasow quote thats common in the startup ecosystem as a joke and critique about inaction.
You’re the one that incorrectly interpreted it as an insult (even if you dont know it's a quote, if you read it properly it's a comment on the ideas and not a comment on brain size or anything else), then you wrote a knee jerk response, complaining I insulted you when I didn’t, and then summarising a bunch of vague generalisations - and then finishing with an angry ending to a post you started with "Calm down man" actual lol.
If you cannot interpret simple responses correctly (or worse - interpret them as insults) it makes me question your critical faculties and invalidate your other conclusions on more complex topics.
The rich have morals, irrespective of what others have said. Sam Bankman-Fried is coming from wealth, but not incommensurable wealth, and he did a crime so self-evident and destructive against the morals of money that there is no way to strike a sweetheart deal out of that.
Seems entirely logical that taxes are paid where consumption happens. That is where the property is located. It is not like the property is shipped to where buyer is...
Logical for us plebeians but not for the elite. In France they pay something like 200k of tax per year. Which means that in France some individuals pay more tax than the entire french branch of multinational making. It's perfectly legal though, most of the money is processed through airbnb Ireland
This is not a tax AirBnb is supposed to pay, the landlords have to pay it, AirBnb is just supposed to withhold it and transfer it to the government.
They chose not to do it to make their platform more competitive with traditional hotels etc, they were able to pocket a significant proportion of it through fees etc. but most of the money went to landlords and clients.
In this case, the tax is paid on the revenue that the landlord makes and Airbnb is supposed to withhold it and pay it to the state. Airbnb being profitable or not is irrelevant.
VAT doesn't have anything to do with profit. A typical setup is some variation of
National subsidiary rakes in money, but has to pay main office in Cayman Island even more in licensing fees for the brand. So national subsidiary is running in negative, and doesn't pay any taxes. Parent company received all the money in Tax haven.
that's irrelevant with this issue though. This is not about Airbnb not paying tax for its own profit, but about Airbnb failing to withhold tax on the gross rent it collects on behalf of landlords, which is required to do legally.
It is the same here when you are in dispute with the tax authorities - you need to pay them what they demand and only then you can dispute it via the appeals process.
If you don't they attach property and goods from you - this happens rather very quickly than the actual appeal process.
Not really, it has a lot of competitors (vrbo, booking etc) and most owners list in multiple websites. it's not a competition problem, and tourists do comparison-shop around.
The problem is with tax evaders. Many use airbnb as a 'first contact' platform. If there are returning customers, they often take the money 'under the table'.
booking.com has a sizeable share at least anecdotally - everyone I know checks both abnb and booking when looking for a vacation spot and quite a few properties are listed in both.
Yeah I meant short rental eligible places in the desirable tourist spots... and palaces in desirable locations, but for these you really need to be a "member of a family".
They get to argue their insane "withholding taxes are an illegal barrier to trade" idea all the way to CJEU, lose, continue to refuse to comply, and then have the gall to pretend they're "surprised". Good grief.
Because doing it makes you an asshole and a garbage person. The fabric holding society together is a little broader than just "you won't beat me for doing it so I will!". Thinking otherwise and then working for a corporation like this is how you get the terrible behaviour that is under discussion.
You absolutely should blame these players. 'If I can get away with it, it must be morally defensible' is the thought process of a psychopath.
What they're doing is knowingly stealing out of the pocket of the taxpayer, and it is deserving of the same attitude you'd have towards a street gang running a protection racket. Just because it's profitable for them to do, doesn't mean it's deserving of respect.
> it is deserving of the same attitude you'd have towards a street gang running a protection racket
The difference is that their actions here seem within the law? The law allowed them to drag out the process for so long. I wouldn't blame them for doing so.
My argument is that the legislation/regulatory environment is to blame. There should be laws/regulation on the books to discourage/punish/recoup costs of behavior we consider unacceptable.
>The difference is that their actions here seem within the law? The law allowed them to drag out the process for so long. I wouldn't blame them for doing so.
There absolutely should be reforms to the system to make this impossible, yes. In the meantime, we can discourage this by making them wear it. The decisions Airbnb made as an organization, have shown us all something about the company and the people in charge of it.
If we can't sanction them legally, we at least can sanction their reputation.
Especially in Italy, the law often allows you to drag criminal trials so long that you might get scot-free because of the statute of limitations. The process should definitely be blamed for making trials so long, but that certainly that doesn't absolve the criminals.
Well, depending on the actual situation it might or might not be "insane". I mean, why is AirBnB responsible for withholding taxes from people who are not their employees? Or even are individual business owners? When you go to a restaurant for dinner do you withhold their income tax when paying the bill? No, because it's not your tax, not your problem.
> why is AirBnB responsible for withholding taxes from people who are not their employees
Because apparently the law says so? Rent income is already taxed at a flat rate (at a relatively generous 21%) as opposed of using the marginal tax rate.
Also VAT and sale taxes are commonly withheld at payment. In UK it was the rule until a few years ago for banks to withhold tax on interest income.
IIRC it changed a few years ago: I think the interest personal allowance became more generous, so most people in practice don't pay tax on interest (especially with interests being so low in the last decade), and those that do, have very different marginal rates, so it made less sense to be paid at source.
Banks share information with HMRC, so I expect that compliance is still high, but it is a bit annoying that our tax returns are not prefilled with this info.
I don't really understand your objection. Tax withholding is in no way specific to income tax. For example, it is not uncommon for that to happen for dividends and interest, despite there being no employment relationship there.
Even VAT is a withholding scheme at heart, which makes your restaurant example kind of funny :) The VAT on that meal you eat at a restaurant is paid by you as the consumer, but collected and paid to the tax authorities (i.e. withheld) by the restaurant.
Honest question - how does it work in that situation with a third party like food delivery? You pay the food delivery company who pays the restaurant. The food delivery is going to take taxes from you I assume, but do they then pay taxes to the restaurant too who goes on to pay them?
Isnt AirBnB like the delivery driver in this situation? DoorDash, in America for example, collects the tax for the food, passes it to the restaurant, who pays their own tax.
Isn't AirBnB giving the collected tax money to the homeowner so they can pay correctly?
I have no clue how it works over the pond so apologies if these are dumb questions.
If you pay the delivery they will pay the full VAT of the total amount, but will get refunded on the VAT they pay for the restaurant goods. Thus every business only pays the tax on the value added. Not sure if this is how food delivery actually gets paid, but if you pay them and they pass the money to the restaurant then yes. If they pass the full amount to the restaurant their VAT paid us effectively zero.
But this case is not about VAT, but a rental tax. If Airbnb collects the money then I don't see why they wouldn't just pay the tax. I mean I know why - they don't want to include it in the price and make their product artificially cheaper by ignoring regulation, but tough luck.
Because they are getting the payment. If the customer would be paying the landlord directly, AirBnB wouldn't have the responsibilty, but since the customer is paying AirBnB, the buck stops there, they are fully responsible for that; the landlords aren't their employees but effectively are their subcontractors.
Well, in that case you are a final customer, should you put on an online service allowing customers to book and pay for dinner in many different restaurants it would be different.
In Italy it is a rather common occurrence in different fields to be required by Law to act as "sostituto d'imposta" (loosely translatable to "tax substitute", the real translation should be "witholding agent"), as an example banks when you pay through them certain types of services, or hotels when you pay the "city tax" for your stay, or firms hiring a consultant.
The taxes are witheld and then paid directly to the revenue service (periodically), the idea is that instead of receiving millions or billions of small payments, the state receives much less larger (cumulative) payments.
If we take as an example the city (tourist) tax, each customer should pay (say) 2 Euro for each night they stay in a hotel (or AirBnB), a (fully occupied) hotel with 200 beds would generate 200 small payments, 2 Euro each, per day, instead the hotel collects them (in name of the state) and pays in a single instance every three months, so instead of 3x200x30=18,000 micro payments, only one payment/transaction is generated.
They are facing a lot of tax evasion from landlords. On the other hand, all the money flows through AirBnb so making AirBnb withhold tax is the simplest and most effective option from the government's point of view.
Withholding taxes are an extremely common mechanism, all sorts of businesses across Europe (and elsewhere) are required to administer them; the idea that the ECJ was going to go "actually, yeah, withholding taxes are illegal" was always pretty fanciful.
Taxes on short term rentals are generally consumption taxes and not income taxes. These are charged to Hotels in many places and in some cases they apply to AirBnBs. I have an AirBnB and am charged the same consumption taxes as a hotel in the same county. It’s fair from the perspective that Hilton and I are providing the same kind of service. AirBnB is on the hook to collect them because they’re the merchant collecting the overall fee. If I ran my own chain I’d be on the hook to collect the fee.
Web 3.0 was initially (among other things) about hyper local, mobile based (personalised), and often geo-location based services on the Internet [1], and more in general about the capabilities of the Internet, and a "web of data". Web3 is the hijacked hype term used in the cryptocurrency space.
Italian citizens are quite capable of tax evasion without the aid of Web 3.0 services; it's apparently a "cultural" thing[1]:
> The results show that the propensity to evade taxes is greater among households whose heads have low levels of education and income, are elderly and are resident in the South. Over time, the propensity to evade taxes has been growing on average, especially in the North, which has reduced the gap compared with the South, and among young people under 30 years old. The paper also shows a link between the propensity for tax evasion and some indicators of actual evasion, such as the use of cash and the under-reporting behaviour in the Survey of Household Income and Wealth (SHIW) conducted by the Bank of Italy, confirming the association between cultural elements and evasion behaviour.
A lot of that is things like the money you pay a babysitter or kid washing cars. It's not worth the effort to actually tax it.
Then some rules are unfair: for example in my business the more hours I bill the more money the business makes. I can bill more hours if I hire a cook, painter or child carer. Only I'm not allowed to. I can understand why - this could be abused - but also allowing it might actually boost the economy. Those helpers would be earning money which would also be taxed. A lot of people have their parents around who do that unpaid which is the reason it isn't allowed.
I would propose that low level tax evasion can be a good thing. Tax evasion is the main balance against corporate takeover and monopoly control via lobbying/evasion at scale. I mean if someone is generating little money why would you want to tax them. One reason the small firms today get taxed heavily is because they are an easy target. Physical presence = easy to find, small = easy to intimidate. Meanwhile for years FB/meta/apple evaded taxes on a huge scale and were barely chased. It doesn't seem like the tax regime has stopped large multi-nationals taking over most high streets or tech firms taking over the internet. As a concrete example starbucks paid zero tax for 3 years in the UK, meanwhile many many small coffee shops paid a lot. https://www.reuters.com/article/us-britain-starbucks-tax-idU...
This is grey at the moment, but you have a good point; the cost of compliance (not just with taxes, but everything) tends to be constant for being in a particular market, and does not scale down with trade volume. It's one of my biggest criticisms of EU vs Anglo business culture is that EU countries tend not to have small business exemptions. And you can't really get new medium and large businesses without them growing through the small business stage.
The ease of "forming a company" is a good marker. In the UK you can do it extremely cheaply with no minimum capital and very limited ID requirements over the web API.
On the balance, the UK is better off with having a cheap LTD process, but as a downside, they are an easy way for less than reputable traders or small companies to avoid all liabilities and simply pivot to a new company when sued.
It's common and a cultural thing in all South Eastern and to a lesser extent in Southern Europe. The most South East you go, the higher the tax avoidance.
I live in the South of Europe and I can relate: the working people work and pay taxes just so those who live on welfare can live off us. So obviously we evade as much tax as we can.
I'd actually be happy if tax money went on welfare as opposed to funding government incompetence, mismanagement or subsidizing the tax avoidance (if not evasion) of those at the top.
Not really, only Agio Oros doesn't have roads. Well they do have a few dirt roads.
The rest do have roads, they collect enough tax to support the infrastructure, some even manage to build new infrastructure. Usually when the authorities build infrastructure, the politicians also steal part of the taxpayer funds to enrich themselves. That's one reason why tax evasion is a cultural thing. The others are welfare and pension (unrelated to contributivity) freeloaders. So it's mainly as a form of protest.
There must be some incredibly expensive technology in those roads, considering how much governments are taking from us to build them.
I mean I can get a supercomputer in my pocket that allows me to access the sum of our civilization knowledge anywhere I am and to communicate with anyone of earth for a few hundred bucks and a monthly fee less than a meal, but roads?! Nooo, those are the real value at the center of our society.
> I mean I can get a supercomputer in my pocket that allows me to access the sum of our civilization knowledge anywhere I am and to communicate with anyone of earth for a few hundred bucks and a monthly fee less than a meal, but roads?! Nooo, those are the real value at the center of our society.
Well... Yeah? Roads are really fucking useful, like many more times than all the knowledge you can have in your pocket. Without roads you don't have that thing in your pocket, because it's not even getting to you, at least not in a convenient timeframe (and not for cheap).
Roads, sewers, water pipes, electricity cables, without those there would be absolutely no way for your supercomputer to be made, even less for that cheap.
Don't dunk on roads, there's a reason why the Romans are still praised for them.
Of course infrastructure is useful, even if not that amazing.
But why are governments charging us for it even more than the Romans did when countless other, much much more amazing things (and just as useful) came down in price dramatically during the last 2000 years?
I have a hunch: in my town all road repairs are made by companies owned by friends and relatives of the politicians in power…
Welfare is a small fraction of the value generated by labour. The vast majority of such value is appropriated by the owners of capital, as profits. They did no work yet they keep amounts much larger than your salary.
In almost any industry and company, profits are vastly higher than any tax paid. If they weren't, the owners of capital wouldn't bother exploiting workers.
That's not really true generally if your margins are low and you include all the taxes paid by the worker e.g.
A very oversimplified example (which I think should be somewhat approximately accurate):
- Your revenue is $100 + $21 (VAT)
- $40 goes to suppliers and other expenses
- $40 goes to labour (let's say they pay ~$18 in taxes)
- $20 is gross profit (you pay ~$5 in corporate tax on that, 25%)
on top of that there is VAT which is another ~4$.
So you end up with a profit of $15 and 'pay'(or rather 'generate') $27 in taxes (and you still need to pay personal income tax when you want to cash out).
And I think an 20% operating margin is pretty good for most businesses.
In most capitalist countries, only a small proportion of that that $18 + $4 paid in tax is used for welfare and the $15 is much larger than that. A lot goes to military, policing, law, prisons, etc. which serve to protect the profits of the ruling class.
It also assumes that profits are actually correctly accounting for the value appropriated by the owners of capital, which often hides various other ways in which they extract value from labour.
> A lot goes to military, policing, law, prisons, etc
I never implied it all goes to welfare. Yet other things, like healthcare, education, infrastructure and loads of other things do provide some utility.
> of that that $18 + $4
Assuming you agree my example is somewhat accurate it's actually $18 + $4 + $5 = $27
Capital gains etc. will also be paid on the $14 further decreasing it.
Now let's look at actual data instead of saying silly things about oppression, social spending:
OECD average: 21.1% of GDP
France: 31.6%
Italy: 30.1%
Germany: 26.7%
US: 22.7%
Total Government spending:
France: 59% of GDP
Italy: 54.1%
Germany: 51%
US: 44.9%
So if more than half = tiny according to you, then yes you're correct. Of course since this data doesn't support your views who cares...
I had originally addressed someone saying most of their hard earned money goes to welfare, which is incorrect. I pointed out much more goes to profits instead. That’s all.
The discussion was about welfare, it’s childish to complain that I didn’t constantly refer to it.
Ultimately the difference doesn’t matter much, governments are capital too in countries where the ruling class is capitalists. What they are forced to spend to reproduce the working class is still for their own profits. Governments aren’t some thing separate from class society.
Governments confiscate an even bigger slice of the value produced in communist countries. The difference is that there is much less value produced there…
In socialist countries, workers form the ruling class. Taxes thus become a form of distributing surplus as the majority see fit.
There’s less value produced in countries that started our poorer and such countries tend to have successful proletarian revolutions. It shouldn’t be surprising that they can’t instantly be as developed as the countries that exploited them.
In the communist Eastern Europe where I grew up the nomenklatura formed the ruling class. And the only distribution of surplus was to themselves. The rest of us was starving. Common theme to all the “proletarian revolutions” I know.
All that changed dramatically with the switch to capitalist, market driven economy in the 90s leading to the amazing wealth and prosperity we are currently enjoying.
Meanwhile I am still waiting to hear about any communist success story…
I grew up in the 90s in Eastern Europe, all I saw was constantly worsening material conditions. Nowadays we’re forced to leave our countries to avoid poverty. Almost everyone older tells us how much worse off we are than they were during socialism.
But at least the remaining socialist countries are slowly winning. At this point it’s socialism or extinction.
> Nowadays we’re forced to leave our countries to avoid poverty
Well you're allowed to leave your country for one thing. How many more would have left the USSR et al. if they hadn't had to risk being murdered by border guards?
> Almost everyone older tells us how much worse off we are than they were during socialism
Which country is that?
> But at least the remaining socialist countries are slowly winning.
I'll bite... name a single "socialist" country that's winning.
> how much worse off we are than they were during socialism
All you need to understand how false that is is to remember that the machine guns on the border during communism were pointing inwards, so people couldn’t leave.
> constantly worsening material conditions
Every single actual, measurable life quality metric in the EE has improved singnificantly over the last 30 years.
> the remaining socialist countries are slowly winning
Please feel free to point out those “winner” countries.
My parents were paying 5% of one salary on rent. People younger than me can barely afford rent by pooling together several salaries. The metrics improved for the capitalists that pillaged our countries during the 90s, for sure.
It’s pointless talking when you’re so ideologically blinded. Probably because you profit from the exploitation of others, so it’s in your material interest.
The USSR had a state capitalist system (openly acknowledged early on as a transitional phase, but even though it stopped using the term it never transitioned out of it, and neither did most other Leninist-derived systems except a few into systems which incorporated more private capitalism later on while the “Communist” Party retained authoritarian power) with the claimed near-term intent of transitioning to functional socialism and claimed long-term intent of achieving communism.
The most actually socialist systems in the world are democratic states with mixed economies starting with the wave of reforms within advanced democratic capitalist economies in the early to mid-20th century that created them; that we tend to call them “capitalism” and the less socialist state capitalist regimes under Leninism and its descendants “socialism” or “communism” is largely a result of 20th century geopolitical block identities and not actual analysis of politico-economic systems against some set of clear consistent standards of what constituties “socialism”, etc.
> most actually socialist systems in the world are democratic states with mixed economies
Well by any reasonable metric they are still significantly more 'capitalist' than 'socialist'. Or rather are these days, due to some reasons there even those 'democratic pseudo-socialists' states from the 60s shifted to 'capitalism' much more since the 60s.
It's a pretty common position outside of the USofA, one held by political students globally and, if you care to dig back, one held by the founders of the USSR who held (textbook) communism ahead as a worthy eventual goal that made up for the intermediate period od state controlled capitalism.
Ask around, no one who fled the USSR will tell you the actual people at ground level were in control.
Even within the US you can find people that weren't caught up with the McCathy era mislabelling and understood the abuse of terminology:
Governments are taxing: salaries paid to employees, sales of products and services, profits made by the company, dividends paid and capital gains.
Also the great majority of value created by a company is captured by the society in improved productivity, products and services. Only a small part is retained by the capital owners.
Finally, these days anybody can easily become an evil capitalist with just a few bucks and a smartphone app, and anybody with a pension plan already is.
And? Per-employee profits are far higher than salaries or taxes, yet the source for both is value produced by the worker's labour. Somehow you're ignoring the majority of what is stolen by capitalists from workers, yet focus on a minor side-effect.
> Per-employee profits are far higher than salaries or taxes,
I don't think that assumption at all holds true for the majority of businesses. Even an extremely profitable tech company like Google "only" has a gross margin of around 28%.
That's ignoring other value extracted by the capitalist class, like "salaries" for capitalists that do no work (like CEOs), anything spent on the board of directors, value extracted indirectly via the stock market, etc.
It's also for a very narrow portion of the global economy, where workers are paid particularly well.
> value extracted indirectly via the stock market, etc.
Like how?
> It's also for a very narrow portion of the global economy, where workers are paid particularly well.
You misunderstood me, I cited Google as an example of a company which is relatively close what you're saying (high margins, a relatively high proportion of value goes direct to share-holders). Most companies which have high numbers of workers are less profitable that it.
Yeah whatabout Italian citizens? Why shouldn't we allow international corporations to socialize large parts of the economy with barebones middle man services and almost a complete lack of responsibility and liability to their customers and offer no services besides protecting themselves with Ai?
This is clearly selective prosecution against the benevolent venture capitalists who never wanted to do anything but globalize the economy and enable commoditization of humanity. :(
Yes Italians cheat on taxes, but on the total Italy is the 6th country in the world in terms of GDP/tax ratio. To give you an idea, Italy is just a bit below Nordic countries. In fact, the Italian government is quite effective in collecting taxes.
The typical complain it is not so much that not enough tax is collected. The issue is the perceived unfairness that salaried employees of medium and large companies which cannot meaningfully evade taxes, get a larger share of the tax burden than self employed, and to a lesser extent, employees of smaller companies that are more likely to be paid under the board.
Whether this perception reflect the reality today (or ever), I don't know.
Which is supposed to be included when calculating GDP. I think the issue is that the tax system is very inefficient there in the sense that some groups are significantly undertaxed while others don't neccesarily pay that much. This creates the overall impression that "Italian don't pay taxes".
One thing this American learned about Italy while living there, the Guardia di Finenza is very good about going after tax evaders. Their enforcement arm is outfitted with planes, helicopters, boats, and tactical gear. It's a very intimidating show of force.
Indeed, the Italian state is totally capable of enforcing taxes.
However it lacks the political will to go after (especially some categories of) tax evaders, as they're a big source of votes in particular for rightwing governments like the current one.
I assume the largest evaders are hard to pursue and prosecute because they have the money and resources to do so. But the small to medium tax evaders were much easier and a lot more flagrant with cars, planes, yachts, etc.
Meanwhile, the US government's IRS only seems to have the resources to chase single parents claiming a bit too much child tax credits.
You have obviously never been in Italy or possibly just as a tourist with no contact to the locals. Italian state is quite intrusive and very happy to extract some money from you, either in form of taxes or fees/fines.
Of course, Italians are also known for being rather creative, so the resulting arms race cannot end with a triumph of the government, but not for a lack of trying.
It's not really an arms race, it's more an inbalance between different categories of citizens.
Employees can hardly avoid taxes (as long as they're regular workers), while autonomous workers ("partita IVA") and small companies/entrepreneurs can easily avoid large amounts of taxes.
The latter are a huge source of votes especially for rightwing parties in Italy, so it's not uncommon for governments to make it easier to avoid taxes for them.
The current rightwing governemnt went as far as calling taxes "state's pizzo" (where "pizzo" is the payment Mafia asks for protection), it raised the limit for usage of cash, and it's discussing measures to forgive debt of tax evaders ("pace fiscale").
So no, it's not an arms race, it's just that it's convenient to let it happen for some political parties.
In many countries of the EU, government expenditure exceeds 50 per cent of GDP, which seems to be the ceiling that average taxpayers can tolerate while still being able to pay for their own lives.
Italy is at 55 per cent. At this stage, you can't really expect people to be happy with the total tax burden.
It depends on the services the state provides and the enterprises it owns (if it directly owns utility providers, some housing or even . A significant proportion of that 55% is used to pay salaries or for goods and services provided by other businesses.
e.g. France and Germany own ~11% of Airbus (in addition to many other companies) each, so 11% of their dividends go to the state (in addition to taxes) which gets to spend them increasing government expenditures to GDP ratio. Boeing OTH is entirely private owned which reduces the same ratio in the US.
As an Italian I agree that taxes are rather high, but enforcing them only on a subset of citizens while happily allowing another subset to easily avoid them is definitely not the solution.
I'd be much happier if the government enforced taxes for everyone, which would then allow it to either improve services or reduce taxes.
Is this a realistic scenario? Democratic governments are beholden to their core voting blocs and can only keep their power by addressing their immediate (as opposed to long term) interests. This is the mechanism that generates various loopholes in tax codes worldwide.
For sure the situation won't improve under the current government, but there have been improvements in the past.
TBH I just hope that honest taxpayers (which I'm sure are the majority of people, given employees can hardly avoid taxes) will realize that this system is a problem, and start pushing for a more just fiscal system.
It depends on the services the state provides and the enterprises it owns. A significant proportion of that 55% is used to pay salaries or for goods and services provided by other businesses.
Yep, pretty much. Labour, aka real work is heavily taxed and then some people cry about the welfare recipients. Hilariously, in my experience they are the same people always crying and asking for more government intervention/help; especially when it can help them being less competitive and earn more for less. In my view this is just a mindset and a major reason I hate collectivism for most things. If you were to completely remove government taxation and welfare, they would soon complain about those people who make do with much less and thus have to work less to live decently. [My opinion being that it is clearly linked to the feminization of society where complaining gives better results than doing or becoming better.]
Which is why people are trying their luck at making money in ways that are less taxed and easier to evade taxation, like AirBnB. Of course, there are side effects, especially in this case considering the sad state of real-estate in most rich countries (boomer effect).
In my experience there are fewer people willing to do real work in a standard heavily taxed contractual relationship (or work is done very slowly to maximize benefits). I believe the only ones not getting owned are the big companies who can afford big law departments to essentially avoid the tax burden as much as possible or shift it to someone else.
Now AirBnB should follow the law, but when you look at it, they became a de facto large tax collector for a state that does not have much relationship to them.
It also seems that readers here are confused about what it means and why AirBnB is not very keen on complying.
It is not about tax collection of AirBnB profits; they only charge a small fee for connecting renter to landlord and I believe they pay their taxes on that part. This is not about this type of taxation that is fair and square.
In the EU, companies must collect TVA on the final sale to the consumer. In AirBnB case, the only thing they sell is the connection part, platform access and some other tools. Nothing more. They are not the ones renting (selling the space for a determined amount of time) and they are not even setting the prices. What Italy wants is the TVA on that part, and the only reason that TVA is not collected in the first place is because those are from independent people cheating the government (very often boomers, who are the definition of this type of behavior BTW). If peoples renting their space on AirBnB would declare their renting income on their tax return there would be no need for AirBnB to collect anything.
Italy is essentially asking AirBnB to become a tax collector on their behalf under the excuse that they facilitate an activity where the citizens evade taxe in large volumes. I understand that they feel uneasy about this and in my opinion if they comply it sets a precedent where a government can have any large company doing its tax collection for free with zero scrutiny or recourse possible.
While AirBnB is any easy target because they are so big and they essentially created this type of business opportunity if they comply it will eventually raise the prices across the board or send their users to smaller competing platforms, not big enough yet to be targeted by the Italian government.
So they are in a situation where complying will have a very short term effect for the government but very real long term user loss for AirBnB, it just short termist stupid government thinking.
The "news" is most likely part of the political propaganda.
If the Italian governement was operating in good faith, what they could/should ask to AirBnB is the revenue generated by each landlord and then figure out a way to match it to their tax returns and then go on and adjust the amount collected for those who lie (adjustment). That would be fair and could actually be required from every platform with similar model to AirBnB and it would make actual sense.
Of course this is political propaganda and not what the government actually needs. As someone who sometimes help for some AirBnB operation I am absolutely certain most of them exist because of tax evasion. If you had taxes on to them, the price is too close to most hotels to make sense for most peoples.
The hotel business is capital intensive but not that labour intensive unless you run a very high end operation. And this is exactly why AirBnB got so popular, peoples figured out that if they had the capital they could make a bit of money on the side on top of their regular income because it is not actually a lot of work. Blaming and requiring AirBnB to tax isn't going to make the problem go away, just displace it somewhere else.
In reality the Italian government already knows who own properties and who own more than is necessary compared to their life situation/income level. It would be very easy to raise taxe on those properties especially those of large landlords (that can only be if they make a business out of it). But they don't because it would require political courage. As many problems of today this is almost entirely a boomer problem, they are the ones with enough surplus money to finances properties or have supplementary space that can be rented. Sometimes I see jobs posting by those boomers for actually operating those AirBnB (it would be too much to ask of them to do some actual work for the profits), the jobs are very poorly paid and always require that it is an "independent". In other words, lowest pay possible with absolutely zero security; welcome to boomer world.
I really don't get the people here rallying against AirBnB, this is a political problem and it would just require some courage to go againts the boomers for once. There is a lot of money to collect there, and no need to have AirBnB involved.
- You need to do this.
= Nah.
- There's actually a law, you have to do this, like everybody else.
= We think the law is unfair, so we're not going to do this.
[Court] The law is perfectly fine, go away.
= "We are surprised and disappointed ... "
Hey I wanted to rob a bank...and despite advice to the contrary, I went ahead and did it, and now I am "surprised and disappointed" by being sentenced to prison.