Italy drops proposed tax on high earners

 
Italian Prime Minister Silvio Berlusconi The austerity measures are reported to have caused tensions within Mr Berlusconi's coalition government

The Italian government has dropped plans to introduce a tax on high earners, Prime Minister Silvio Berlusconi's office has said.

The "solidarity tax" on those earning more than 90,000 euros (£79,000) was one of several new measures announced earlier this month as the government aims to balance Italy's budget by 2013.

The announcement came after senior ministers met Mr Berlusconi on Monday.

The Bank of Italy has warned there must be no reduction in the austerity plan.

The government said it would instead step up measures to fight tax evasion.

In a statement issued after several hours of talks, the prime minister's office said it would also exclude years spent at university and military service from retirement age calculations, delaying retirement for some people.

There are also plans to spare the governments of small towns from cuts.

But the statement made no mention of any increase in VAT, which had been widely mooted in the media.

Although the EU had welcomed Italy's proposed new austerity measures, the country's largest union, the CGIL, has criticised the plan and threatened strike action.

The plan is also reported to have caused tensions within the centre-right coalition government.

The Bank of Italy has warned that the government must still save a combination of 45.5bn euros ($65.5bn; £40.2bn) in higher taxes and lower spending.

The deputy head of the Bank of Italy, Ignazio Visco, told a parliament committee that the overall austerity measures "cannot be reduced".

 

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  • rate this
    0

    Comment number 20.

    To those saying this lets the rich off; you need to understand that after a particular point, increases in tax rates *reduces* tax income.

    Imagine if Tesco's quadrupled their prices. Would they quadruple their income? No, they would almost certainly lose masses of net profit as people move to Sainsbury's, who didn't increase.

    Using a tax that loses money just to bash the rich helps no one.

  • rate this
    -3

    Comment number 19.

    Oh dear, the green monster is out today isn't it. You don't make the poor richer by making the rich poorer, if you reduced the top tax rate to 20% just watch the "rich" innovate and generate jobs that would benefit the whole country.

  • rate this
    -7

    Comment number 18.

    What is everyones problem with this? High earners should not be penalized for their hard work. Lower earners should pay more tax to support the rich. There's a reason they're earning less, they're lazy shirkers who should knuckle down.

  • rate this
    -1

    Comment number 17.

    "This lot are not worthy of serious comment,during WWII their tanks had 5 gears,4 reverse and 1 forward in case they were attacked from the rear."

    More Italians died in world war 2 than British. There's a little fact for you.

  • rate this
    +4

    Comment number 16.

    It's no surprise with the Italians and other governments for that matter. They are all under the impression that the wealthy will get us out of the mess the world is in. How wrong they will prove to be. What they forget is, it was the wealthy and greedy that got us in this mess in the first place.

  • rate this
    0

    Comment number 15.

    he will make overtures at cutting public spending.the poor taking the biggest hits that is because he is a cowardly politician,they are all the same.of course the difference being,he will not carry out the policy.he will posture and smile as he allways does,and hope every thing will turn out fine.it most probably will.i cannot see us leting italia go under,can you?

  • rate this
    -2

    Comment number 14.

    Taxation is supposed to be a payment for the services which the government provides for you, such as military protection, police protection and court services.

    To say that someone should pay more taxes "just because they're rich", is both immoral and unjust. All those who advocate "taxing the rich" are bitterly envious and full of hatred for people who have a value which they do not.

  • rate this
    -1

    Comment number 13.

    So when it comes to solidarity, the Italian version of 'we are all in it together' ,as in the UK, it doesn't apply to the well off and the rich.
    "Only the little people pay tax."

  • rate this
    -1

    Comment number 12.

    have the condems been giving Italy lessons on protecting the rich at the expense of the poor? The only thing missing from this article was the lie, we are all in this together

  • rate this
    -4

    Comment number 11.

    This is the mentality that has lead to collapse of society in Europe. I am not surprised by this because politicians are basically the same wherever one goes. Nothing changes in politics. As for not taxing the 'successful', wealth is a poor measure of success. I am one of the most educated men on this planet and yet I am poor, because knowledge and understanding mean more to me than wealth.

  • rate this
    +1

    Comment number 10.

    What a surprise already the backsliding starts!

    They don't go through with a tax on high earners and surprise, surprise who is one of Italy's biggest earners?

    Oh that would be Prime Minister Berlusconi who acts in his best interests rather than the nations.

    And people still wonder why the markets don't believe a word the Italian government says.

  • rate this
    0

    Comment number 9.

    What a relief that Italys richest man is also their PM.Now he can afford to pay his football players their 100k/week.

  • rate this
    +3

    Comment number 8.

    How to take out a loan, the Italian way:

    1) Apply for loan (or ECB support of sovereign bonds = same thing)
    2) Listen to justified concerns of lender
    3) Make a show of putting your house in order (propose taxes, etc.)
    4) Receive loan
    5) Renege on promises
    6) Keep fingers crossed that ECB continues to buy bonds in market

    Fantastico !;o)

  • rate this
    -5

    Comment number 7.

    As much as delusional socialists dont like it (reality), the net effect of raising tax on 'high earners' (wealth producers) is negligible and can be net negative to the country as wealth producers leave the country or do not invest. I think Osborne should lowering the top rate which is way more, in reality, if you add hidden tax of National Insurance

  • rate this
    +1

    Comment number 6.

    Not realy suprised that Burlusconi has failed to impliment the measures proposed when Italy's ecconomy was on the wobble. Even with most of the Italian media in his pocket he hasn't the 'nutz' to do what needs to be done, coward................

    I am suprised that the Greeks weren't the first to row back on their austerity promises though.

  • rate this
    -4

    Comment number 5.

    Good to see austerity measures being brought in and also happy to see no unfair taxes on those earning £79k+. I do not earn close to this much but I hope to in the future. People who earn this are not rich - they just work harder and are smarter than people on low income. We all need to make cut backs but it should be done equally and not by over taxing our most successful people.

  • rate this
    -1

    Comment number 4.

    Sensible: if high earners are taxed fairly there is less incentive to arrange their affairs to minimise the amount they need to pay - never mind engage in illegally hiding income. The best way to encourage tax avoidance and evasion is to levy extra taxes on those who are doing well for themselves out of sheer greed and jealousy.

  • rate this
    +2

    Comment number 3.

    Kinda hard to take a tax seriously when it's called a "solidarity tax".

  • rate this
    -3

    Comment number 2.

    This lot are not worthy of serious comment,during WWII their tanks had 5 gears,4 reverse and 1 forward in case they were attacked from the rear.

  • rate this
    -1

    Comment number 1.

    there's a connection ;o)

 

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