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
    +2

    Comment number 40.

    Shame, those wealthly people may have come over here.

    Shame, those wealthy people may have come over here.

    Taxes should not be used to punish success. Punish greed, yes, not success.

  • rate this
    +2

    Comment number 39.

    When we have a society where everyone gets an equal start in life, it might be reasonable not to tax the rich more than the poor. But we are nowhere near that yet. Actually, compared to the past, the rich are relatively lightly taxed in the UK & also have the resources to avoid paying taxes. Taxes have always been used for social/economic purposes rather than purely to buy state services.

  • rate this
    +2

    Comment number 38.

    I can imagine how that meeting of senior ministers went ...

    ... "But Mr Berlusconi, WE are the high earners"

  • rate this
    +12

    Comment number 37.

    5.Hail__Hail

    "..are not rich - they just work harder and are smarter"

    Is that so? So, are you saying a banker on £1m+ salary works 40 times as hard as an average teacher or is 40 times as smart...? Isn't that why we have a banking crisis?

    And - don't fall in the trap of confusing entrepreneurs, like Dyson, and salarymen, like Bob Diamond. One creates wealth, the other - well, exactly...

  • rate this
    0

    Comment number 36.

    Even if EVERYBODY paid the same 'rate' of tax on their earnings, the so called 'wealthy' are paying more anyway! 20% of £15k generates less income than 20% on £50k. It is this that makes it fair. By layering different rates on different income levels we are creating disparity - and in some senses demotivating earners from succeeding. It's a political tool today and an unhelpful one at that!

  • rate this
    0

    Comment number 35.

    Marginal flat rate tax is fairer than stepped marginal tax rates. It cost less to implement, and is more efficient. A rate between 17% and 21% is shown to be the most effective. . .

  • rate this
    +1

    Comment number 34.

    9- if it was real it would be great, but, unfortunately, besides this law there are others that reduce taxes paid by parliament members and, particularly, by the PM....in conclusion he still does pay almost nothing

  • rate this
    +5

    Comment number 33.

    Just a thought. If a government akes ALL of the money from the 'rich', just how much do you they think they would end up giving to the 'poor'?

    My guess is diddly-squat, zip and nada!

  • rate this
    0

    Comment number 32.

    I agree with the tiered system that the more you earn the more tax you earn but only up to a point. There are not enough higher paid jobs for everyone so I am more than happy to subsidise those on lower incomes to aid their standard of living or society will not function but there comes a point when I question whether it would be worth the hours I work for the incremental financial gain.

  • rate this
    -1

    Comment number 31.

    21.Dr_Vanadium

    Yes and the UK controls 3.5% of the worlds GDP while only having 0.9% of its population. the poorest here are better off than most.

    26.Dr_Vanadium

    Somone on £26k pays £6k tax (inc NI) or 23% of gross income. Someone on 100k pays £36k tax, 36% of gross income.

    the rich do pay more, and mostly gladly, but you have to say enough is enough at some point.

  • rate this
    +2

    Comment number 30.

    17. SleepingSpurs

    Not true. . . Italy - 301,000 UK - 383,000

    And don't forget that they were the opposition

  • rate this
    +5

    Comment number 29.

    There is no such thing as a self-made millionaire - they all depend on their company to back them and all the technologies and knowledge they import. The stones at the top of the pyramid ought to be grateful for those at the bottom for holding them up. If the bottom collapses, then the top goes with it! Is that what the wealthy want by avoiding taxes? Be not decieved by their false reductionism.

  • rate this
    +6

    Comment number 28.

    There is no evidence that high taxes lead to reduced tax revenue, beyond the theoretical laffer curve - see the Bush tax cuts.

    Anyone in the 50% bracket is still taking home almost 10K a month - almost the same as someone on the minimum wage.

    HM Govt e-petition: http://epetitions.direct.gov.uk/petitions/409 Call for a fairer economy

  • rate this
    +1

    Comment number 27.

    Now mr cameron why dont you follow the italians instead of draining the poor of what little money we get and start thinking of ways to get at the richer end of society.Because we all know that the rich has got richer .Stop picking on the weakest of society for a change and investergate the tax evaders much more strenuesly

  • rate this
    +1

    Comment number 26.

    A wealthy business person should know that their success depends upon taxes. Taxes pay for the armed forces that secure resources. They pay for roads; they pay for healthcare that their workers need; they pay for running water and sewage, etc. etc. Wake-up! No man is an island, without taxes there would be no rich and 'successful' people!! The rich benefit more and so should gladly pay more!

  • rate this
    +4

    Comment number 25.

    Let`s just rebuff a few misconceptions. not everyone wishing to see those who earn the most contribute the most are jealous. Nor are they full of hatred for the well off. Having a higher rate of tax for the highst earners isn`t immoral or unjust. You can make the poor poorer by making the rich richer. Not all rich people innovate and generate jobs

  • rate this
    +12

    Comment number 24.

    Paying taxes is not a penalty! Why do people with wealth see at as punishment? Have these people no concern for the society upon which their industries rely? Paying taxes is an investment. Big employers benefit more from taxes than poor people, ergo, they should gladly pay more taxes in order to invest, as they will benefit! This reductionist self-centred philosophy of today is erroneous.

  • rate this
    0

    Comment number 23.

    5-Success requires some luck.The fortunate few graduates who`ve got the good jobs should pay more in hard times if they can.
    7-I`ve read that the gap between the richest and the poorest has gone up 10X in the last decade-Now tax havens like Switzerland are finally being gone after so the rich will just have to pay.
    14-There`s no point in taxing people who haven`t got the money to pay

  • rate this
    0

    Comment number 22.

    Again many comments on here reveal society's problem - this reductionist approach of evaluating an individual by their wealth. I run a Web business which specialises in science, art and computing and has been a valuable resource to students all around the World and hence to their future employers, and yet I earn nothing from it, it is non-profit making. You see, we are all part of a whole!

  • rate this
    +3

    Comment number 21.

    Something like 15% of the UK population own 65% of the UK's wealth and resources - tell me that isn't a problem. Wealthy people may innovate, beacuse they have the capital to do so, but they depend on the poor to make their dreams real and ought to show more gratitude, for no man is an island. Business peeps all rely on science, but how many of them employ scientists and pay them well?

 

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