Fiscal Illusion: 11 strategies for government to squeeze money out of its population
Nearly 100 years ago, the Italian economist, Amilcare Puviani, suggested 11 strategies that a government could use if its goal were to squeeze as much money as possible out of its population:
1) Use indirect, rather than direct taxes to hide the tax in the price of the goods.
2) Inflation (via a state-controlled central bank).
3) Borrowing (to postpone the necessary taxation).
4) Gift and luxury taxes (wrap the tax in the purchase of a "special" purchase, reducing the "annoyance" of the tax).
5) Institute "temporary" taxes (and then never repeal them).
6) Tax unpopular minority groups (ie, the rich, smokers, windfall profit recipients).
7) Threaten social collapse or withholding of monopoly government services if taxes are reduced.
8) Collect taxes in small increments (ie, sales tax or income tax withholding).
9) Create taxes whose amount (and the amount of the programs it funds) and incidence can't be predicted in advance (ie, Medicare).
10) Extraordinary budget complexity to obfuscate public understanding.
11) Use generalized expense categories to make assessment of individual components difficult.


