Italy And The Great Tax Revolt

Submitted by James Miller of the Ludwig von Mises Institute of Canada

Taxation is theft.

There is no denying this.  If I and a few brutes appeared at the door of an unsuspecting individual and demanded monetary compensation less we drag him off to jail, this would be a clear cut case of robbery.  It is a common tactic used by mobs or street gangs to offer protection with the barrel of a gun.  The only difference between shakedowns by private thugs and those employed by the state is the badge.  The badge legalizes extortion and imprisonment.

With that being said, it has been three years since the financial crisis and governments around the world are still reeling in the lesser Depression.  Tax collections are down while public expenditures have skyrocketed in a vain effort to stabilize the economy.  Much of this mass orgy in spending has been financed by central banks printing money and the suppression of interest rates down to artificially low levels.  This is the Keynesian remedy to recession.  Spend what you don’t have via the printing press.  Have central bankers create paradise on Earth through counterfeiting.

So far it hasn’t worked.

Like the Great Depression before, regime uncertainty and an emphasis on consumption over private investment have prevented a sustainable recovery from taking hold.  Public debts continue their upward trend with no conceivable end in sight.  The bond vigilantes have started their attack on the Eurozone; namely Greece, Portugal, Italy, and Spain.  Greece is all but finished as even the most dimwitted of commentators is conceding than an exit from the euro is likely.  Meanwhile in Italy, the lack of tax collection has forced the hand of Prime Minister Mario Monti to crack down on tax evasion.  This hasn’t gone over well with the Italian public.  From the San Francisco Chronicle:

Equitalia, the state tax-collection agency, has been targeted in a wave of attacks as Italians chafe under stepped-up efforts to recover an estimated 120 billion euros ($153 billion) in lost revenue from evasion. On May 12, a Molotov cocktail exploded outside Equitalia’s Livorno office, one day after a parcel bomb was delivered to the Rome headquarters, site of a December explosion that tore off part of the general manager’s hand.

“I have never seen such a tense atmosphere” said Ballico, who has been employed by Equitalia since 1998 and is now on temporary leave to work for the UGL labor union. “They call us loan sharks, bloodsuckers; my colleagues have to deal with anxiety and stomach aches every day and they are scared.”

News to Ms. Ballico: you and your coworkers are “bloodsuckers.”  Your profession is based on pure violence and robbing your countrymen.  Why should they not identify you for what you truly are?

The reactionary attacks are the result of the austerity measures being imposed in Italy and other highly indebted countries of the Eurozone periphery.  These measures are often described as savage cuts in spending when in actuality the public is being squeezed more to fund the government’s operations.  The political class remains unwilling to significantly scale back its operation and profligacy.  The money was supposed to be cheap.  The good times were never supposed to end.

And now the slaves are revolting.

Earlier this month, a 54-year-old small businessman facing financial difficulties and tax debts of around 2,400 euros, took 15 hostages at an Equitalia office near Bergamo for several hours before surrendering to police.

When the chains of oppression are being tightened, some react in not-so-kind manners.

And yet this is the trend happening all around the world.  In light of Facebook co-founder Eduardo Saverin renouncing his U.S. citizenship to live in Singapore and avoid filling the coffers of the IRS from the billions he stands to gain on the popular website’s initial public offering, New York Senator Chuck Schumer and Pennsylvania Senator Bob Casey have introduced legislation to mandate a 30% capital gains tax on those who follow in Saverin’s footsteps.  In France, many entrepreneurs are gearing up to leave as newly-elected President Francois Hollande has promised to raise the highest marginal tax rate to 75%.  Greece is being pressured to clamp down on tax evasion.  The same goes with Spain.  Even Swiss banks are being targeted by the U.S. Department of Justice for acting as tax safe havens.

Politicians and their bureaucratic foils think only in the short term.  They see less tax money flowing into their hands and instantly attempt to confiscate more.  This reaction is an inner glimpse into their true motive of reestablishing supremacy.  Why people would be reluctant to hand over even more of the sweat of their brow is never a consideration.  In the politician’s mind, it is the populous that serves the state, not vice versa.  Centuries of compulsory democracy haven’t altered the relationship between the aristocracy and the serfs who plow the field.  Today, serfdom is disguised with the existence of the ballot box.

Like a drug addict, the state must be sustained by increasing amounts of revenue to satisfy its craving of paying off voters.  It must continually buy legitimacy to hold up the veil which masks its thieving tendencies.  As the tax fund dwindles, governments in the West are becoming desperate.  Like the producers in Ayn Rand’s uncannily predictive novel Atlas Shrugged, many of the more productive members of society have grown tired of being soaked to pay for political handouts and unending wars of aggression.  The resistance isn’t limited to the rich as the Chronicle article points out, “much of the anger directed at Equitalia is from people with more modest means.”

Italian Interior Ministry Anna Maria has declared that attacking tax collectors “is the equivalent of attacking the state.”  What she won’t admit is that the state carries out a perpetual war on those who it feeds off of to function.  In perhaps the greatest and most precise description of the state ever written, individual anarchist Lysander Spooner explains difference between a highway robber and a government tax collector:

The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is nonetheless a robbery on that account; and it is far more dastardly and shameful.

The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a “protector,” and that he takes men’s money against their will, merely to enable him to “protect” those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will, assuming to be your rightful “sovereign”; on account of the “protection” he affords you. He does not keep “protecting” you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villainies as these. In short, he does not, in addition to robbing you attempt to make you either his dupe or his slave.

The only difference between a thief and the taxman is the thief recognizes his crime is wrong.  The taxman not only feels entitled to the labor of others but routinely pilfers under the pretenses of serving its victims.

Decades ago in the depths of the Great Depression, Western governments took advantage of the crisis and consolidated power and enlarged the scope of their authority.  Voters barely put up a fight.  They gave up personal and economic liberty for entitlement programs.  It seemed like the right choice at the time.

It was the great swindle orchestrated by a ruling class looking only to expand its control.

Now that the money for the savior state is running out, the choice is clearer than ever.  The leeches living off the state apparatus are prepared to do whatever is necessary to preserve their well being.  From political protest to tax evasion, trampling the citizenry into compliance is their goal.  It is ultimately up to the public at large to decide how much they are individually willing to take.

The small businessmen of Italy have made their choice and have said no to more of their income being squandered away on the perks of government employees.  Let’s us hope they won’t be the only ones.

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