Because the theses of Boeri and Perotti on the flat tax are not convincing
What do economists Boeri and Perotti say about Salvini, Berlusconi and Meloni's flat tax proposals. Gianfranco Polillo's analysis
That for the left of the PD the enemy to beat is above all Giorgia Meloni is all too evident. With the reformists of various rites and political beliefs out of the party, there is nothing left for them but to exalt the competition. That is to hope that the sum of the votes between the Lega and Forza Italia is such as to overshadow the eventual success of the "patriots". In the updated and corrected version of a returning anti-fascism, capable of extending the system of its alliances and isolating the opponent. Which, if it wins, would be able to cause a small cataclysm. By doing away with that ancient prejudice – anti-fascism in fact – which, in Italy, was one of the great glues of the First and Second Republic.
The importance of what is at stake explains not only the positions taken by various politicians (which is natural). But the descent into the field of personalities more sensitive to issues of a cultural – programmatic nature, rather than to the politique d'abord . Two big players, like Tito Boeri and Roberto Perotti who, from the pages of Repubblica , target the different positions expressed on fiscal policy by the three parties making up the center-right coalition. Saving the Lega and Forza Italia, but condemning, without the possibility of appeal, the thesis of the Brothers of Italy. “Inequitable, expensive and inapplicable. That of FdI is a 'fake tax'.
And then "yes" to the flat tax, albeit in the two different versions (Lega, Forza Italia). The hypothesis of being able to tax, with a different rate, the increases in income accrued in the tax year must be absolutely rejected. The flat tax proposed by the Lega and Forza Italia, the two economists write, "can be criticized for many reasons (…) but they have their own internal coherence". Important recognition, albeit belated. That of the Brothers of Italy, on the other hand, is "the most foolish economic policy proposal". Economic policy, not fiscal policy. Although it is the proposal that later "entered the official program of the right."
So the explanation, disproving one of the left's warhorses, for the two authors, the flat tax of Salvini and Berlusconi is by no means "unconstitutional". We were aware of this. Both hypotheses – they add – "are progressive". They recall, in fact, that in the current IRPEF regime, progressiveness is guaranteed by two elements: the deductions granted (in a lower percentage as the taxable amount increases) and the progressiveness of the rates (increasing as income increases). With the flat tax the rate remains fixed, but the deductions remain. That is to say the discounts or the tax expenditures, as the economists say. Progressivity, therefore, is reduced, but does not disappear.
Giorgia Meloni's proposal, on the other hand, is certainly “unconstitutional”. We would not be so convinced, especially since this, according to our critics, "is the least of the (relative) problems". Its possible introduction would undermine the Keynesian 'main' automatic stabilizer '. Leaving less money in the pockets of those who already earn less. Instead, favoring those who "are in the phase of ascending income". Which is fair from the "demand" point of view. But more than offset by the possible positive effects of an "offer" policy. Given that the tax incentive pushes for greater individual commitment.
A series of examples then follow, aimed at demonstrating the infinite possibilities of avoidance. Once it is clear that the proposal "far from simplifying the tax system, it actually increases the number of personal income tax rates" to finally reach the conclusion: "it is difficult to avoid the feeling that it was made alone to be able to use the term in some way" flat tax "so fashionable, and so dear to the allies".
A sort of "duplicity" then, to use a term dear to the left. Aimed at containing the promises, a bit 'sailor', of those who would like to shoot the moon, to earn a handful of more acclaim. And therefore reduce those distances that the polls do nothing but highlight. Even if those promises should be honored in some way. Giving rise to those criticisms that the same two authors, on many other occasions, have not spared. But which today, for quite obvious reasons, they prefer to declassify.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/flat-tax-boeri-perotti/ on Thu, 18 Aug 2022 05:12:56 +0000.