Too posh for your pocket: Famed Ferraris draw tax fire in Italy
Like its South European neighbors, Italy is suffering from overhanging debt. Its government has to make unpopular spending cuts to make both ends of the budget meet. And on the debit side, revenue authorities are seeking ways to boost tax collection in a country where cheating is not infrequently deemed clever thinking rather than crime.Part of this strategy is targeting Ferrari owners, who have paid up to half a million dollars for their fast-paced cars but may have failed to reveal the income used to back the bill, reports ABC News. Also in the tax collectors’ crosshairs are people displaying wealth in the form of yachts, luxury apartments and nightclubs, among others.Italian officials say they discovered more than $10 billion in unpaid taxes this year alone. More than 2,000 owners of luxury cars paid less than what was due. Police have arrested 80 suspected tax evaders and are investigating 2,000 others.Many of the offenders were not trying too hard to conceal their property – just registering it in their relatives’ names. With the national revenue agency receiving additional powers to cross-check bank accounts and other assets against declared income, identifying them is not that difficult.Now some Ferrari owners are scared that driving the posh car may draw unnecessary attention from the authorities. Many have chosen to sell their vehicles, which drove market prices low. A Ferrari owner interviewed by ABC News said the car’s value plunged at least 20 percent recently."Many are trying to sell their luxury cars but they can't get the cost they paid for them," he said.The crackdown as well as several much-publicized probes into the incomes of rich and famous Italians will eventually change the country’s fiscal culture, believes Attilio Befera, the Italian tax agency's director.Critics are much more skeptical, pointing out that all previous attempts failed to shrink Italy’s considerable shadow economy, which is estimated as high as 17 percent of the GDP. As Befera's deputy, Marco di Capua, recently told Reuters: "Everyone's against tax evasion – when it's someone else doing it."