Friday, December 23, 2011

Stupid Italian Limit On Cash Payments

The new for government to subsidize banking: limit Cash Payments:

"Italian banks, which charge businesses up to 2 percent for credit-card transactions, could end up being the main beneficiaries of the new rules, according to Rome-based consumer group Adusbef. “Unless banks cut fees on credit cards and current accounts, they’ll just make more money from the new law,” said Mauro Novelli, the general secretary of the organization, which represents banking and insurance customers."
Another problem with the new Italian €1,000 upper limit on cash payments is how it is supposed to reduce tax evasion. Yes, I know of course that the idea is that tax evasion will be more difficult if made through debit cards than cash, but as far as I know transactions where taxes were evaded were already illegal and already unreported, so why would making it illegal in a second way make people cease to make these unreported and illegal transactions? The only payments that would be affected is really cash payments above the €1,000 limit (and below the existing €2,500 limit) where they would have followed tax rules.

Given this, such rules will have very little or no effect while unnecessarily creating discomfort, eliminating privacy even for transactions where tax laws are followed and subsidize the banking system.


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