Good reasons not to buy a flash car

[Old Greg]

What this means in practice is that real tax rates for the very rich are lower than they appear. And yet Italy's economy is still ****ed, allegedly. Which rather gives the lie to the theory that cutting taxes for the rich boosts the real economy.

Or does it?

WTF is the 'real economy'?

[doodab]

WTF is the 'real economy'?

The part of the economy that actually produces goods and services, as opposed playing the markets.

Clearly in this case the tax avoidance has boosted the flash car segment of the Italian economy, which is actually quite significant.

[Spacecadet]

WTF is the 'real economy'?

Its what the silent majority work in

[Old Greg]

Its what the silent majority work in

Well they keep quiet about it.

[AtW]

Well they keep quiet about it.

Pst, tt's ze Official Secrets act...

[amcdonald]

What this means in practice is that real tax rates for the very rich are lower than they appear. And yet Italy's economy is still ****ed, allegedly. Which rather gives the lie to the theory that cutting taxes for the rich boosts the real economy.

Or does it?

That's because the black market is so huge there, it's nothing to do with the tax rate

[gingerjedi]

No, you have to own stuff. Like land, art, houses, businesses etc. Lots of old money in Italy.

What happened to the 'dont' I meant to put there??

I'm not 45 yet.

[doodab]

That's because the black market is so huge there, it's nothing to do with the tax rate

Government tolerance of black market activity amounts to an effective reduction in the amount of tax paid per unit of economic activity.

So for example, if the tax rate on $1 trillion of legitimate economic activity is 30% and black market is worth $500 billion the EFFECTIVE tax rate relative to true GDP of $1.5 trillion is only 20%.