Apparently America's "Patriotic (yet just slightly hypocritical) Millionaires" phenomenon is spreading. In an open letter sent to the Government and to Parliament (we assume the post office can track down the recipients at whatever seaside resort complexes they are to be found), 75 Italian managers, industrialists and professionals, propose what in their opinion is best for the country, which is another way of saying avoiding anything that could potentially crimp their EPS (and take home bonuses) now that Italy is the latest austerity state. And while back in the US, those who are already rich are doing everything in their power to prevent those who wish to be, from becoming so, so in Italy the local upper class is all about instituting countrywide central planning in the form of pervasive capital controls: the one notable proposal is for all cash transactions over €300 to be banned, and to be permitted only in electronic format. We can't decide what is more hypocritical: our own pseudo-nouveau riche trying to pass for magnanimous, when everyone can see right though their act, or the Italians, where the cost of a few more years of profitability has to be borne not just be the middle class but by everyone. We just may leave it as a tossup.
Open letter to the Italian government and parliament
Dozens of managers, entrepreneurs and professionals have written an open letter to the Italian government and Parliament because they believe that the proposed budget cuts «fall short of solving the country’s problems». In order to relaunch Italy's economic growth they have put forward four points: a reduction of Italy’s widespread tax evasion by reducing the use of cash, the reintroduction of a propriety tax, a raise in the pension age at 65 years and a raise of VAT.
The budget measures that are currently being discussed in Parliament are unfair and potentially recessionary. In addition they appear wholly insufficient to start resolving the country’s structural problems. Taxation in Italy is too heavy on earned income and too low on rent, in all its forms. This approach is illiberal and an obstacle to wealth production; it must be overturned in order for the country to resume its growth path.
Many proposals could be made, especially on State expenditures’ cuts and on the need to speed up the infrastructure building process that could boost the economic growth of our country (for example, investments in broadband internet and wifi access), but we believe that in this moment a few clear changes to the budget's fiscal revenues are needed without delay.
The budget cuts do have some positive aspects, including an increase to 20% of the taxation on financial income and measures for a more flexible work market; these may support economic growth and enhanced fairness, if they will be accompanied by adequate reforms of the welfare system designed in particular to help younger generations.
On the contrary we think that the so called “solidarity tax” (i.e. a raise in taxation) must be eliminated from the budget, because it penalizes heavily those who already pay a lot, not merely by comparison with other industrialized countries, but also considering the quality of public services and investments.
If the more responsible forces in Parliament will not be capable to avoid this further tax increase, we invite MPs to take into consideration what has been done in the UK, giving high earners (for example, in Italy, those with a taxable income over Euro 300,000 per year) the ability to avoid the proposed tax increase if they invest in the creation of new businesses (i.e. venture capital). Policy should focus on enterprises and their growth, and not on rent.
We believe furthermore that the following points must be taken into consideration, in order to give citizens and markets a signal of fiscal discipline:
1. Strenghtening of the measures to fight small tax evasion that represent a particularly widespread phenomenon; reinstatement of traceability measures for checks; reducing to 1.000 the maximum limit for cash transactions and the introduction of the obligation of electronic payments for amounts that exceed 300 euro, possibly providing the elderly with a credit card through Poste Italiane and / or Banco Posta.
2. Lifting of the retirement age at 65 years for both men and women, which is one of the few measures providing a structural benefit to public finances
3. Reintroduction of the property tax, with a significant deduction for non-premium principal residence. The property tax is necessary for local authorities to provide essential services to citizens, consistently with a “federal” development, and particularly efficient in terms of tax collection because it is connected with “things”. Why was it abolished?
4. A one percent increase in Vat, earmarking the additional tax revenue to the lowering of public debt. In Germany this measure has already been adopted with no adverse impact on inflation or consumption.
Signatories: Carlo Accornero, Giorgio Ambrogioni, Livia Amidani Aliberti, Anna Maria Artoni, Luciano Balbo, Alessandro Balp, Sylvia Bartyan, Orlando Barucci, Riccardo Battaglia, Piero Bendoni, Paolo Bertolino, Cosimo Bisiach, Fausto Boni, Giovanni Bovio, Salvatore Bragantini, Cesare Buzzi-Ferraris, Pia Maria Calabresi, Davide Canavesio, Amedeo Carassai, Cosimo Cardone, Valentina Carella, Gabrio Casati (nome collettivo degli autori del libro Luigini contro Contadini – il lato oscuro della Questione Settentrionale), Mario D’Urso, Rodolfo De Benedetti, Marco Farina, Pietro Fioruzzi, Fulvio Fornaro, Alessandro Fracassi, Andrea Francesconi, Marcello Giustiniani, Alessia Glaviano, Roberta Guaineri, Andrea Guerra, Federico Lalatta Costerbosa, Stefano Landi, Maurizio Lauri, Giovanni Lombardi, Maura Magioncalda, Massimo Malvestio, Francesco Manna, Riccardo Martinelli, Lorenzo Mauri, Maurizio Mauri, Vincenzo Melluso, Oronzo Gaetano Milone, Luca Moroni, Pietro Musolesi, Alberto Musy, Alberto Nanni, Gabriella Pagliani, Auro Palomba, Alessandro Pasquarelli, Chiara Passalenti, Francesco Perilli, Marco Pescarmona, Bruno Prevedello, Ugo Runci, Marco Samaja, Ottaviano Sanseverino, Giuseppe Scassellati, Corrado Sciolla, Alfredo Scotti, Massimiliano Sforzini, Jacopo Silva, Daniele Sottile, Maria Cristina Storchi, Filippo Szego, Andrea Tavecchio, Chicco Testa, Alberto Toffoletto, Pier Giuseppe Torrani, Stefano Venier, Guido Roberto Vitale, Nicola Vitale, Cristiana Vanda Zavoianu
h/t Fabrizio Goria