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| “Financial Theory of Illusion” (1903) by Prof. Amilcare Puviani (1854 - 1907) |
Answering to the question: “If a government were trying to squeeze as much money as possible out of a population, what would it do?", Italian economist Amilcare Puviani elaborated the following canon of eleven fiscal commandments for modern governance:
- The use of indirect rather than direct taxes, so that the tax is hidden in the price of goods.
- Inflation, by which the state reduces the value of everyone else's currency.
- Borrowing, so as to postpone the necessary taxation.
- Gift and luxury taxes, where the tax accompanies the receipt or purchase of something special, lessening the annoyance of the tax.
- "Temporary” taxes, which somehow never get repealed when the emergency passes.
- Taxes that exploit social conflict, by placing higher taxes on unpopular groups.
- The threat of social collapse or withholding monopoly government services if taxes are reduced.
- Collection of the total tax burden in relatively small increments over time, rather than in a yearly lump sum.
- Taxes whose exact incidence cannot be predicted in advance, thus keeping the taxpayer unaware of just how much he is paying.
- Extraordinary budget complexity to hide the budget process from public understanding.
- The use of generalized expenditure categories to make it difficult for outsiders to assess the individual components of the budget.”
