The Ink Is Almost Dry on Italy’s 15% Flat Tax Rate & Guaranteed Income
The Ink Is Almost Dry on Italy’s 15% Flat Tax Rate
Five Star, League parties near completion of government
plan
Leaders to meet president Mattarella on Monday afternoon
By John Follain May 13, 2018, 8:00 PM PDT Updated on May
14, 2018, 2:48 AM PDT
Italy’s populist duo has all but completed a governing
plan that includes a flat tax as low as 15 percent, a guaranteed income for the
poor and a lower retirement age as they prepare to seek a green light from the
president on Monday.
Luigi Di Maio, 31, of the anti-establishment Five Star
Movement said he and Matteo Salvini, 45, of the anti-immigrant League have
refined the last details of their “Contract for the Government of Change” in a
late evening meeting in Milan on Sunday, news agency Ansa reported.
President Sergio Mattarella summoned Di Maio and Salvini
for separate talks on Monday, the head of state’s office said in an emailed
statement. Mattarella will meet Di Maio at 4.30 p.m., and Salvini at 6 p.m.
Campaign pledges about the spending and tax plans have
fueled investor concerns that a populist administration could jeopardize state
finances and slow growth in the euro zone’s third-biggest economy -- which is
already the most sluggish among countries that share the common currency. Plans
to reconsider treaties with Europe also prompted worries that Italy could
undermine efforts for EU reform.
The parties’ economic program costs between 65 billion
euros ($78 billion) and 100 billion euros, according to an estimate in
newspaper Corriere della Sera on Monday, adding that the flat tax is the most
expensive measure.
The two leaders continue to keep quiet about whom they
will nominate as prime minister. Salvini would like economist Giulio Sapelli, a
former board member of energy giant Eni, while Di Maio proposes Giuseppe Conte,
a law professor at Florence University, Corriere said.
The government plan will feature the full citizen’s
income that Five Star pushed in the run up to elections and scrap an earlier
pension reform that had raised the retirement age, Five Star lawmaker Laura
Castelli told reporters after officials ended their policy session.
Not Worried
“I’m not worried about the markets,” Castelli said. “When
the markets held up on the day after the elections I understood that they are
not afraid of Five Star.” Salvini’s center-right alliance led Five Star in the
March 4 elections which resulted in a hung parliament, and he has been
negotiating with Di Maio for more than two months to form a government.
Policies in the draft so far include a tax set at 15
percent, and at 20 percent for families with a yearly income of more than
80,000 euros, ($96,000) according to a League official who declined to be named
discussing a confidential document. A Five Star official said tax rates have
yet to be defined. Italy’s current income tax rates range from 23 to 43
percent.
Five Star expects the citizen’s income to cost about 17
billion euros a year, but the head of Italy’s pension agency estimates the
price to be as much as 30 billion euros. No funding measures in the draft were
disclosed. Italy has the second highest debt burden in Europe after Greece.
Migrants Targeted
The joint program also includes speeding up expulsions of
illegal immigrants, the League official said. A central part of the party’s
election platform was to seek the curbs, especially on migrants tackling the
perilous Mediterranean crossing from North Africa. On foreign policy, the
parties seek a review of European Union treaties, and oppose sanctions against
Russia, the official added.
The ball will soon be in the court of President
Mattarella. The 76-year-old former constitutional court judge, signaled over
the weekend that he will play an active role in vetting the program, premier
and cabinet ministers.
Depending on populist progress, Mattarella could name a
premier-designate this week; he or she would meet party leaders before
presenting a list of ministers to the president for approval. The new
government would then be sworn in before facing a vote of confidence in both
houses of parliament for a vote of confidence.
Officials from both parties say privately that candidates
are being sought, and that Di Maio and Salvini have agreed that neither of them
will be premier.
— With assistance by Kevin Costelloe, and Lorenzo Totaro
Comments
Post a Comment