Italians love cash and avoid credit and debit purchases at the highest rate of all the euro region. As a result, they are among the region’s least indebted and biggest savers. It’s estimated that the government loses 100 billion euros of revenue a year in untaxed transactions, while its banking cartel loses out on billions of possible fee revenue when the average Italian makes only 26 credit card purchases a year. Needless to say, the government and banks are joining forces in a war on cash, cash salaries, and cash transactions.
Good luck! A cash-based culture is what one would expect from a people who have seen practically every form of government come and go over centuries. No wonder Italians, embracing a practice endorsed last year by economist Joe Salerno, tend to place their faith in private networks and associations whenever possible. “Italians have a strong family tradition that leads them to avoid debt and save a lot to ensure their kids a future,” says Bocconi University’s Carlo Alberto Carnevale-Maffe. “They like solid investments such as houses. And for renovations or purchases made under the table, what better way than cash?”
For more information, see Bloomberg.
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GOT CASH?
I can say with a lot of confidence that many, probably most, American- born Sicilians, share that viewpoint about saving. For them few sins are greater than a wasteful lifestyle, and success is measured in the bankbook.
This is undoubtedly true, but they also love their government pensions – often collected on multiple relatives – and socialized medicine. It’s an incredibly weird balance if you could even call it that.
Norwegian politicians recently introduced a new law: if you buy goods or services worth more than 10,000 NOK (roughly $1,700 USD), and pay in cash, you risk being an accomplice if the seller avoids paying taxes and fees (incl. VAT). The limit also applies for accumulated sums (eg. occasionally paying a babysitter).
It doesn’t matter whether you knew the seller’s intentions or not, and a receipt won’t help.
The great thing about cash is the lack of record keeping required. If you have money, you can spend it until it runs out. No one can call your bank to determine if you are a “qualified customer” by the balance in your account (most banks have an unsecured line that allows a merchant to input a tracking number from a check and an amount to know if a particular transaction would clear with the available balance, and this is often abused to know the current balance in the account) when you pay with cash. A companion to spending cash is carrying weapons along with a roll of bills. Free people have the ability to defend their property and themselves.
Record keeping is a difficult thing to enforce on small transactions and multiple transactions, especially when both parties are victims of public school education. Whadda ya mean keep a log? I gets paid after the work is done or the customer takes home the item. Written contracts are for defining a job and punishing non-performance in court, not for collecting taxes.
The so-called “black market” is really the Free Market working around the frictions imposed by Gov’t on all levels to get something done faster/cheaper/better/where & how wanted. For an individual, the only “drawback” is that it”s difficult to establish bank-credit from stealth income and almost impossible to “qualify” for Government “programs” like unemployment/welfare/subsidy/Union protection/property mortgage, especially for the native-born Caucasian male (curiously, this assumption of .gov help-disqualification makes this class the most-desirable and hardest-working employee in an Affirmative Action/Ethnic-Minority Economic Empowerment job environment).
Northern Italy is only prosperous (imho) due to the private cash markets that exclude meddling by Rome.
Cheers.
I was in Rome last September, and one of the most striking things I noticed was that the tax police (Guardia di Finanza) are EVERYWHERE, and no one i observed there EVER PAID TAX! Also, merchants offered generous discounts for cash versus credit cards, and, to my chagrin, almost NO merchant would take American Express (fees, and tax reporting issues no doubt).
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