I just got back from the annual conference of the European Association of Environmental and Resource Economists in Rome. I've got several posts coming, but this one is, uh, cultural...
The Economist has said that "tax evasion has long been a national sport" in Italy, but I was surprised to see its extent.
When dining out on our second night, we got a printed bill on a plain piece of paper; since we paid cash, there was no evidence of our transaction. I've seen that kind of transaction in other countries, of course, but it was suspicious (other places often give you a numbered bill/receipt).
I was therefore ready for this situation:
In the photo, you see the cashier has the register open. He's putting cash in the drawer and giving receipts for drinks to customers. The customer then takes the receipt to get her drink down the line. The bartender who takes the receipt in exchange for the drink then returns the ticket to the cashier, where it's used again.
Some people may call this recycling. I'll call it an ingenious way to sell 10 drinks while reporting one sale to the tax authority.
(I asked an Italian why the guy doesn't steal money; she said that the crew boss probably told everyone to use this method; nobody wants to rip off the crew -- just the tax authorities.)
Bottom Line: Italians don't like to pay taxes because the State fails to benefit them because people don't pay taxes.
Addendum: Surowieki reflects on the same problem (non-tax payment) in Greece.