Because I criticize Enrico Letta’s fiscal idea

21 May 20213 years ago babelfish

The proposal to revise the tax rules on inheritance can be discussed. But can this be done without taking into account the more general reform that is part of the government's commitments? Gianfranco Polillo's comment

Enrico Letta must have been struck by the street of Il Riformista . We owe to the pen of Filippo Porta a complete re-evaluation of the figure of a poet like Giambattista Marino, considered one of the greatest exponents of the Italian Baroque. Author of the famous hendecasyllable "the poet is the finest wonder" for years object of an absolute condemnation. As if to theorize an emptiness which, however, according to the author mentioned, was not such.

And in fact the "wonder" was not long in coming. First the ius soli, then the exaltation of gender, in the choice of the leaders of the parliamentary groups. When the standard-bearers at the Tokyo Olympics, as it should be, are a man and a woman, like Elia Viviana or Jessica Rossi. And now the idea of increasing the inheritance tax to offer the boys a cadeau.

“On @ 7Corriere – he wrote in a tweet – launch of a proposal for #dote for # 18-year-olds. For the generation most in crisis, concrete help for studies, work, home. To be serious, it must be financed not in debt (they would pay it back) but by asking the richest 1% of the country to pay it with the inheritance tax ”.

The response of the Prime Minister, Mario Draghi, was not long in coming. This is not the time to take from the Italians, but to give. At least until the recession that has been dragging on in Italy, albeit with ups and downs since 2011, will not be behind us.

This would be enough to close the question. But unfortunately there is more. And that more coincides with the call of the forest. A sort of curse that often strikes the leaders of the Democratic Party. Not all for the truth, but in this case the syndrome is evident. It marks the transition from a reformist position, which was that of the last political Letta, prior to his transfer to Paris, to a not so maximalist one. How unanchored from any element of reality. Characteristics often present above all in the Roman party.

Obviously, the proposal to revise the tax rules on inheritance can be discussed. But can this be done without taking into account the more general reform that is part of the government's commitments? Isn't the Italian taxman complicated enough to add further complications? And what would the proposal consist of? A purpose tax: take away from the rich to give to the young. A typology that could have its own logic, indeed perhaps it certainly does, but within a framework of overall coherences that exclude extemporaneous proposals.

But beyond the specific merit, there is a more general problem that should be kept in mind by those who, for a long time, were one of the top executives of Arel: the research center founded by Nino Andreatta. In whose annals there should be traces of those foundations of Italian society from which it should not be possible to ignore. According to the elements of the Via Nazionale database, the tax burden in Italy, in 2019, exceeded that of the Eurozone by 1.2 points of GDP: 42.4 percent, against 41.2. When Draghi stresses the need to "give" he has this parameter in mind on the one hand, and on the other the Italian lethargy, towards all other countries, on the path of development.

Economic considerations could be argued. Any self-respecting welfare worker would shell out the ejaculation of inequalities and the data relating to absolute and relative poverty. Gruesome values, it must be immediately added, if they were not the daily companion of those who cannot discover the original causes, which are at the base. And then, even in this case, a little comparison can be healthy. The data are always those of the Bank of Italy and concern Italian public spending.

Net of interest, it is more or less the same as that of the other Eurozone countries. Relative difficulties arise from two distinct factors. The interest expenditure, due to the high public debt, is roughly double that of the Eurozone, once Italy is excluded. Since the birth of the euro, this difference has been around 2 points of GDP, which has made it more difficult to square the circle and keep the budget deficit within the parameters of the Fiscal Compact.

But the much more sensational figure is that relating to the weight of social spending, made up of pensions, assistance, subsidies, simple redistribution of income and so on. From the beginning of the third millennium, to 2019 it has increased by 5 points of GDP. At the beginning it was a few decimal places below the Eurozone average. Having settled on a value equal to 15.4 per cent of GDP. Twenty years later, however, it reached the peak of 20.2 per cent, against a Eurozone average of 16.1 per cent. So over 4 points more than the others.

Can it then be argued that Italian welfare compared to French or German welfare, let's not talk about English or American welfare, is less generous? Can we continue to ask for additional resources to be distributed, considering the value of the tax burden, just mentioned? Of course yes. But this is just bad ideology, which cannot pay off. But one could reply: beyond the numbers, the sufferings exist, the malaise is palpable, the imbalances are clear. Obvious: but that's not the point. The truth is that simple income redistribution policies do not solve the problem. What is needed is a much more robust development than in previous years. Unless we go back: to consider socialism, against the exhortations of Deng Xiaoping, the father of modern China, a simple administration of misery.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-critico-lideona-fiscale-di-enrico-letta/ on Fri, 21 May 2021 07:00:44 +0000.