Some economists, former advisors to left-wing governments, hypothesize increasing inheritance tax rates from 4 to 20%. The objective is to raise cash thanks to the supposedly rich, with a tax that would however fall on the relatives
Class theme: how do I hit the Scrooges or supposed ones? Development of the maximalist left (read Landini, Bonelli, Schlein every other day and the Five Star Movement with alternating leaders): we place a nice capital of 1-2% on wealth (real estate, financial assets, etc.) above the threshold of 1 or 2 million euros, we decide deductibles and some exemptions (perhaps for the entrepreneurs closest to us) and we extract 25 billion a year from them.
Development of the progressive left (difficult to identify the protagonists today): nothing against the patrimonial tax, but we are talking about a new tax that is already creating debate and leaves the field to the center-right for political controversy. Better to focus on a tax that already exists, that of inheritance. Let’s borrow the rates from France or Great Britain, they know how to get rid of those who have accumulated houses, bonds or liquidity when they pass on to a better life and it doesn’t matter if the real victims are the heirs who may not even fall into the hated Scrooge McDuck category. It’s a detail.
The problem is that if the broad camp were to prevail in next year’s elections, the temptation not to displease anyone would be strong. And at that point we could find ourselves with a new super tax, the property tax, and an old, exaggerated tax.
We got this idea by reading a recent article that appeared on Voce.info and co-authored by four economists, some of whom are not unknown to political matters. Among these stands out Marco Leonardi who was economic advisor to the Prime Minister Paolo Gentiloni (2016-2018), was part of the economic staff of the Renzi and Draghi executives and worked closely with the current mayor of Rome, Roberto Gualtieri, at the time of the Mef. But there are also Tommaso Di Tanno, who was an advisor to the Finance Minister Vincenzo Visco, and Leonzio Rizzo, a university professor who collaborates with Libertà Eguale, the reformist association close to the Democratic Party.
In short, a curriculum that we could define as progressive without fear of contradiction.
What do progressives say?
The article which, as often happens in the online economic newspaper founded about a quarter of a century ago by some economists including Tito Boeri, is very full-bodied and in-depth, points the finger at “the growing concentration of wealth in the hands of the top 0.1 percent of the population”.
Already heard it.
This concentration «has brought out a heated debate on the opportunity and concrete feasibility of a property tax. But also a basically irrational approach, pro or con. However, perhaps the most thorny issue is underestimated: the overcoming of the screens that are normally placed between the “rich” and his properties (companies in tax havens, trusts, foundations and much more). This is a very delicate topic because large assets are usually shielded through these vehicles which make best use of the regulatory differences from country to country. It is the reason that strengthens the solution – in fact an alternative – of a possible reorganization of the tax on inheritances and donations”.
In short, the rich man is smart and finds workarounds (from trusts to foundations) to escape the patrimonial burden. At this point, isn’t it worth focusing on succession, given that the transfer of assets to heirs is more difficult to hide?
«Succession», the analysis continues, «has the advantage of referring first and foremost to a tax that already exists and has been digested to some extent by the context, but from which a little too little is derived today in Italy. With modest adjustments, however, interesting equity and revenue objectives could be achieved.”
Small effort, big results. Also because, as highlighted by a recent study by the French Bnp Paribas (in collaboration with SDA Bocconi), in the next 10 years the Bel Paese is expected to face the challenge (which for many investors is an opportunity) of the inheritance of over 1,000 billion euros.
Today in Italy, for inheritances to spouses and children there is an exemption of 1 million euros, beyond which a fixed rate of 4% is paid. For siblings the deductible is lowered to 100,000 euros, while the rate rises to 6% and for the others it reaches 8% without any immunity band.
Do you want to put Spain and France? Where the deductibles are much lower and the system is progressive but with much higher rates, or the United Kingdom where it reaches 40%. Moral of the story: «While Italy’s revenue is 800 million, in France it is 18 billion, in Spain it exceeds 3 billion and in the United Kingdom it is 8».
There is something to fix. As?
By adopting the French system (it would go from 800 million to 6.5 billion), or “by setting the rate at 20% above the 1 million euro exemption, also proportionally raising all the other rates for the other hereditary axes”, or again, “by assuming the IMU tax base for properties”.
Meaning what? Are we talking about cadastre reform again?
«While waiting for a gradual and reasonable update of the land register», we read, «we could act like this for now: we would simply need to modify the revaluation of the taxable base of the properties to be subjected to inheritance taxation, using the same parameters used to identify the IMU taxable base. Strangely, in fact, the revaluation coefficients (…) for succession are lower than those envisaged for the IMU”.
Results? «With this modification and maintaining the current exemptions, a revenue would be obtained that exceeds 5 billion and which progressively grows over time reaching 7 billion in 2032 and 10 billion in 2045».
To be fair, the analysis highlights how these resources could be used to significantly reduce the tax burden on the labor income of the middle classes. But history teaches us that the left is always ready to impose taxes; it is the cutting operation that often encounters the greatest internal resistance.
