summarily Shelve the debate on whether to introduce a wealth tax is a luxury that Italy can not afford. Not if you can afford in relation to the crucial importance of two issues in which he struggles not for years but for decades: the huge stock of public debt and the modesty of the rate of growth of its economy. The two problems are closely related. The global crisis of the past two years, has increased the evidence of this correlation to set it up as a trap into which the country is debate: the sustainability of the debt does not improve because the economy is not growing, the economy is not growing because it does not improve debt sustainability. As you know, at the end of this year the public debt will reach 120% of GDP. As abnormal, that level is the result of an action of restraint which the government leads despite great pride to have cost not only the renunciation of all significant policy of promoting development, but even a restrictive action carried out through indiscriminate spending cuts. Even this, in hindsight, is emerging as a trap which you can not see the exit because such a policy, all aimed at containing the balances on time, undermines the main guarantee that a debtor should be given, namely to the prospect the ability to generate resources to interest payments and repayment at maturity.
Strategies to set about solving these problems if you do not see the messianic expectation of a global recovery. The inconsistency of this strategy is apparent from the fact that, even if this recovery is accelerating, and consolidate, the Italian economy seems unable to take advantage of well-known because of its lack of competitiveness (firm size, innovation, research, and etc.). Place like this, and before reaching the idea of \u200b\u200ba tax on estates, are appropriate considerations of scenario is the issue of debt than on the inability to grow.
debt.
When it comes to debt not just from its size, it is appropriate, if not a duty, even a qualitative considerations inherent in the process by which it is formed and the nature of the claim which is its mirror image. Well, the fact that Italy is distinguished by a wealth of heritage of the families is not a particularly high case and can not be explained only with the result of a great propensity to save as hagiography would have us believe the brisk current. It's the result, rather, a period long gone, nothing less than fifty years ago. It was then that a debt is not unlike that of other European countries began to grow for the accumulation of deficits due to a sharp increase in current spending offset only in small part by a timid increase in revenue. The world - it should be noted - was still strictly bipolar and our political and institutional system consequently blocked: the shape was that of the great Western democracies, with a majority and a minority, but the geopolitical balance meant that it remained stable for the the ground that was made up of Marxist parties including, in particular, the Communist Party. As a result, spending went up for welfare, to ensure the estate office, but it was not proportionately increased the tax burden, not to endanger the electoral support given to the majority of the bourgeoisie, by entrepreneurs, the self-employed workers, largely from the country world.
Viewed from the standpoint of income earners, therefore, the exchange was as follows: low taxes, on the one hand, the condition that the expenditure not covered by the tax levy was funded, on the other, with the underwriting of securities. In a closed financial system so as to operate properly was enough interest rates to ensure the functioning of this circuit. Rates, however, increasingly high that were capitalized as additional debt, the liability side, and from the asset side, as financial wealth of households whose income is allowed to save in order to subscribe to the state title.
This process has especially characterized the '70s. In the '80s and into the early '90s, then, the debt has exploded, but mainly because of rising interest rates which multiplied in a few years. It goes without saying that the more kept growing burden on the interests, the more financial wealth of households, either directly or indirectly held securities.
A garnish the cake with a dense cherry provident Finally, in the '90s, the movement of harmonization of Italian monetary policy to that of countries that were preparing to form the monetary union. In two or three years the Italian market rates were reduced to one third with the multiplication of the financial wealth of households at that time was still consists primarily of government bonds. Who had fixed-rate Treasury bills with maturities of medium-long enjoyed, without the slightest merit, an increase of their market value up to two and even three times.
not relevant to the fact that in subsequent years the wealth has taken different forms: foreign securities, property, or otherwise. What is important is a large part of it was formed for reasons that have nothing to do with subjective merit should be acknowledged and respected: hard work, ingenuity, entrepreneurial skills, security, office, savings. Consequently, the removal of a portion of this wealth, which weighs so heavily on growth opportunities in our country, you can now set up as the appropriation from the state, and therefore the entire national community, a small part of a something very similar to a windfall that families are found recorded in their balance sheets, or as the closing of an account left open too long with those who, perhaps in good faith, perhaps without even realizing it, they put their hands in the pockets of the state to make Italy a country with a lot of wealthy people and a public sector constantly in canvas slings. This story of public debt is not irrelevant when debating a possible tax on capital.
growth
For some consideration of the growth is not necessary to go back so far back over the years. Just call the turning point determined by the participation of Italy to the European single currency. For the purposes of interest here, replacing the pound with the euro has implied the transition from a lenient monetary policy to inflation, as willing to give regularly to the competitiveness of our productions a devaluation of the lira as tonic gradually lost competitiveness. The shift would also result in a conversion of 180 degrees of manufacturing strategies moving from a competitive set the price to one based on quality, exclusivity, on innovation, technological content. For reasons mainly medium-sized businesses, this transition has been addressed successfully by only a small part of them. Most remained anchored to a mentality that globalization, with the consequent competition from emerging countries, has made anti-historical and, therefore, increasingly untenable. In an effort to support the market, thanks to the policy for obvious electoral reasons, the solution was that of a more severe compression of the cost of which has made the costs above the remuneration for work, either directly with the so-called moderation, and indirectly with the introduction of atypical contracts of which the system production has almost exclusively used to employ workers in economic and regulatory conditions below those specified in the contracts. So - as pointed out by the governor of the Bank of Italy - "the wages of young people's entry into the labor market are still, in real terms for over a decade at a level below that of the '80s." Nevertheless, "the youth unemployment rate close to 30%. " We need to note that it can not be coincidence that the origin of this situation coincides with the birth of the monetary union and the consequent stabilization of the exchange?
The result of this shortsighted policy has been to erode the purchasing power of most of the population thus creating a further trap: domestic demand is stagnant, the economy does not grow because it lacks of competitiveness, they keep their costs to increase but keep their costs down even more depressed domestic demand. And the spiral of decline continues to be screwed down a well which does not yet see the bottom (see including wages and productivity, the bond fatal). The hypothesis
If the asset considered so far can also be partially shared, the idea of \u200b\u200bintroducing a wealth tax can not be discarded a priori, let alone if for reasons of mere political propaganda, as did the center-right, or of rough competition, as did much of the center-left.
The hypothesis must be deepened, not with a view to bring down the debt, as in this case to obtain a meaningful result we must act with one hand so hard to determine - as has been noted by many - effects heavy, perhaps even unforeseeable and probably uncontrollable. The hypothesis is worth further consideration as to lighten the taxation of wealth at the same income, or if you prefer the tax burden, the taxation of income. The goal is not to reduce the stock of debt, but to reduce its size in terms of GDP and thus to increase this way the reliability and sustainability. In other words, the goal is to boost growth and with it, distributive fairness, the pursuit of fulfillment, and ultimately to a real progressive in accordance with the Constitution. Of course, with a few caveats are also subject to investigation.
First warning: to lighten the income from employment or are retired with an appropriate progression that provides more tangible benefits such as the tax is low. The purpose BEYOND THE reasons for the equalization of distribution, is to revive domestic demand, and all the econometric models, as well as empirical evidence, they say that the availability of additional purchasing power translates into more demand for goods and services as an integrated low purchasing power. It does not seem advisable, however, reducing taxes income from financial and business income. Financial activities, you know, are already too reducing taxes, rather there is a problem to raise their taxes at least to the average level of other European countries. It does not seem appropriate, on the other, de-taxation of business income because it would contradict a policy that finally compels companies to increase competitiveness through research and innovation, reversing the policy followed so far to assist in the search for compression of the costs - as above - is ahistorical and, in times of globalization, can only squeeze wages and living conditions and working towards the levels of low-cost countries.
Second warning. The taxation of assets is not only a possible means of taxation, but also - and sometimes especially - an instrument of economic and industrial policy. It can be seen, therefore, not only to replace the revenue that would be less with a tax exemption of income from work and pensions, but also to induce a greater fluidity in movement and the allocation of wealth. A fluidity that would be desirable both in relation to real estate, especially, to the ownership of companies, where (especially after the disastrous abolition of inheritance tax) a tax balance sheet could be designed so as to loosen the ties between businesses and households owning and thus promote more efficient allocation of the property itself, with mergers and combinations aimed to raise the average size of firms.
Third warning. A sheet as is outlined above is consistent with the objective set by the Minister Tremonti to shift the tax "from income to property." A goal shared not only in terms of tax evasion, it is clear that "things" can escape or hide from the most unlikely of income, but also because it is totally unfair that they are taxed the earnings of most financial returns, and the panda worker who used to go to the factory and not the yacht, moorings for pleasure boats or houses also of great square footage perhaps located in the most exclusive residential districts. And it is socially disruptive, as the governor of the Bank of Italy noted that the category of young people, including employees, depends on the parents' income when the same benefit, in the key of intergenerational solidarity, they could be financed by a tax reduction of earnings with a sheet on the wealth owned primarily by the category of parents.
Fourth and final warning. Do not say that wealth, financial or otherwise, fled abroad or are dressed in camouflage from overseas. This happens already to an extent that it is difficult to imagine what it would be less than that in the case of a capital that is applied - with progressive, of course - on all movable and immovable property that can be achieved by the mere fact that they exist, are seen or are identifiable. Technical and political problems, of course, there are, but why: perhaps now there are none?
Alfredo Recanatesi
also published on www.eguaglianzaeliberta.it - \u200b\u200bMarch 4, 2011
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