Taxes: What's Luck Got to Do With It?

What does luck have to do with taxes?

Perhaps a great deal. Marc Myers, in the book How to Make Luck, shares some interesting facts.

Briefly, during the thirteenth century, Italy emerged as a vital trading center.

With great ports located on calm seas, Italy was ideally positioned for traders and goods coming from or heading to Europe and Asia, including shrewd and savvy Dutch traders.

Silver, which was mined throughout Europe, was often sent in the form of ingots to mints in Pisa, Genoa and Venice, where it was stamped into coins. Pisa and Genoa, located on Italy’s west coast, were easier to reach, and Pisa in particular began to attract more silver ingots for processing.

Recognizing the threat to one of its major commercial enterprises, the city of Venice implemented an ingenious policy to attract a greater share of silver for its minting operations.

In 1270, the city launched one of history’s first shopping tax breaks. It granted citizens of Lucca, a city 12 miles from Pisa, exemptions from customary bullion taxes for purchases they made in Venice using silver ingots.

What a clever, win-win strategy. It encouraged the men of Lucca to transport silver ingots to Venice, a competing silver processing center, at their own cost. Why? Because they could shop tax free.

Which brings us back to the point. Myers hypothesizes that Dutch traders, observing these transactions, created the word “luk” to describe the tax-free status and good fortune enjoyed by Lucca men.

Eventually that Dutch word drifted across the English channel and entered our language. By the time Shakespeare used it in the Merry Wives of Windsor (1598), it was spelled "luck."

Is Myers' hypothesis accurate? There's no way to know.

It's possible, however, that without taxes and the enterprising fellows of Venice, Lucca and the Netherlands, we might have no "luck" at all.


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