The limits of taxation meet the limits of Italy's blinkered attitude to crypto

I'M sure we are all worrying about the next Budget at the end of the month. What is clear about it is we are all going to pay more tax one way or another.

Pop over to France for a wee break? French taxes are on the up, in an attempt to bridge the gap between money coming in and the relentless rise in what the French wish to pay in order to keep les sans culottes from attacking the Bastille again.

Germany has a similar problem. They continue to pay for people who don’t contribute in the way the Germans used to – and that includes what was the East.

As an aside, what has happened to all the erstwhile industrial and engineering powerhouses that are/were German? On a worldscale they are now minnows.

Spain has a similar problem. In fact every western nation has the same problem, which is that we have now gone beyond what we can afford to pay for.

Sadly, this has not yet sunk into the collective consciousness, and those who feel entitled to what they already have do not intend to give any of it back. The whole point about growth is that the economies with this problem have to grow faster than the spending. If not, we are all quite literally sunk.

Greece reached that point some years ago and the EU effectively pulled the plug. As an amusing sidelight, at that time, Greece had 22 airports that were unused. In a peripheral way, I was asked to dispose of them (or at least help).

Two went to the US. Five went to the EU who turned them in to immigrant centres. Some went to private people and a couple to the Olympic group. But the one I liked the best was in Athens itself. They turned it into the velodrome for the Olympics.

And then there’s Italy. I love Italy. I love the food, the country, the culture and everything about it. But its leaders continue to suit themselves and not the people.

Love him or hate him, Berlusconi actually made it possible for the Italians to continue on their merry way by actually getting lots of them to pay tax. To this day, when you eat in a restaurant and get a receipt, don’t throw it away. You can be stopped at any time by the Carabinieri and asked to show the receipt that has to match what was paid for the meal, and if it doesn’t (or you’ve lost it) both you and the restaurant can get a swingeing fine.

So it is no surprise that the Italians have also woken up to the fact that they need to raise more money.

My point here is that at some point the people will say enough is enough and then all hell will break lose. The alternative is to cut services which is - to put it mildly – never popular, but which eventually has to happen.

Italy has just increased tax on crypto from 26% to 42%. In what universe do you think you are going to encourage people to invest and use crypto by nearly doubling the tax?

The problem, of course, is that practically every other tax is now so strained that even a small rise will drop the amounts brought in.

In the UK I’m sure you’ve noticed the changed narrative about non-doms and other taxes, which everyone and his dog knows will result in less money coming into the country if tampered with.

It is of course perfectly described by the Laffer curve which politicians frequently care to gainsay, but which has the inevitable result of crashing political plans when reality bites.

I’m absolutely certain even the Treasury has been burnishing Mr Laffer’s curves to try to make things work. We really are in the last chance saloon. It seems the present idea of growth is to borrow more and spend it on a lot of pointless and useless central dogma.

Good luck with that.