The tax reform starts at 2-3 billion. The prudence of the Treasury for the Delta variant

FABIO FRUSTACIANSA

Daniele Franco

How necessary it is to preserve the accounts from burdensome operations was explained by the Minister of Economy Daniele Franco to his undersecretaries during the meeting that is held every Tuesday morning at the Treasury to make a point on the weekly work. That of the minister was not a generic discourse on public finances, but an indication, accounting and political, he specifies: the tax reform, which will debut with the delegated bill by the end of the month, will currently be able to count on 2-3 billion. The money will be allocated with the budget law in the autumn, so the dowry may increase, but at the moment the indication is the utmost prudence. Set by a stone guest who can once again be a destabilizing factor not only in terms of health, but also economic: the Delta variant.

The combination of the forecast of an increase in infections in August and the unpredictability of the spread of the variant in the medium term generate not only wait-and-see and a mini-version tax reform from the point of view of resources, but also a broader reasoning , linked to the light nature of the tax intervention. This reasoning says that the deficit, already stressed with the anti Covid maneuvers, must be preserved. At the moment there is no talk of new closures of economic activities, but at the same time in more than one government environment no one can exclude it a priori. The poisonous tail of this thought is to take into account new aid and therefore a new recourse to the deficit. This is why a tax reform funded in an important way by the same deficit is inconsistent with a general picture of the economy that could be affected by other priorities, in any case by a greater urgency which is precisely that of refreshments.

From now to October, when the maneuver arrives, there will be time to evaluate whether to strengthen the commitment in line with the trend of infections, and this time interval also explains the “very general” scope, as defined by a government source first level, of the delegated bill that the Council of Ministers will approve by the end of the month, most likely at a meeting that should be held on July 30th. Here the question also becomes political because giving too much detail to the delegation would mean having found a definitive synthesis on a series of issues. The issues are called flat tax, income tax brackets, patrimonial. These are all issues divided between the political forces that make up the majority. On the flat tax for VAT there is the League that wants to relaunch its tax model, still on the Irpef the 5 stars push for a reduction of the rates from five to three while the Democratic Party is more for the solution of the continuous rate on the German model. Not to mention the assets. It is enough to recall the controversy that erupted at the end of May, when the secretary of the dem Enrico Letta proposed taxing large assets to obtain a dowry to be allocated to eighteen-year-olds. The long and careful preparatory work done by Parliament has smoothed out many of these divisions, the positions after six months of confrontation have come closer, but it will be necessary to understand if this rapprochement will hold up during the discussion at the government level.

The political space to carry out this discussion is not there. Ten days are too few and the delegation bill cannot be postponed because it is one of the many deadlines agreed with Brussels as part of the Recovery road map. There are not even the political conditions given that other issues, starting with the green pass and more generally the management of the pandemic, impose on Mario Draghi the need to mediate and find a common line within the majority. For all these reasons, the delegating bill will contain only indications of principle, while the thorniest issues will be postponed to the delegated decrees. A proposal with a minimum basis for reform came out of the Parliament, from the cut in the personal income tax rate to taxpayers in the income bracket between 28 thousand and 55 thousand euros, the simplification of IRES, the cancellation of IRAP, the stop to micro taxes like that on the degree and the super stamp. The delegation bill, on the other hand, will be much more indefinite in the actions to be taken. This does not mean that he will give up putting the main principle on paper: the tax authorities must be simplified to reduce the levy. Important resources could arrive from the reform and the cut of tax expenditures, but the acceptance will have to be calibrated taking into account that the curtailment and reorganization of the concessions has always proved to be a complex, if not impossible, undertaking, given that it is linked to the delicate issue of consent. For now we start with great caution.


Source: Huffington Post Italy Athena2 by www.huffingtonpost.it.

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