A country and a tax – an Italian story

economy

In a civilized country it could happen that a new government has to be formed by two rival parties. Take a look at Germany, they got to use this formula (Big Coalition, Grosse Koalition in German) in order to support a massive reforms program in the ’00. In such a situation the National government work under an agreement, a high form of compromise between political rivals. After the end of this agreement everybody is free to compete against each other, democracy is still in its place and the National interest has been preserved.

In Italy it works in a different way, this is a very good example; the complete removal a tax based on real estate (named IMU)  was in the political program of PdL (Silvio Berlusconi’s party), the same tax was to be rewieved in the political program of PD (our version of Democrats). In our coalition government they’re working togheter. The problem is: how to compensate the IMU income for the country? We’re already under heavy taxation, adding new taxes will be a political suicide. So they decide, all togheter, to cut some expense from the National budget (it’s about 800 Euro billion).

So far, it’s all right. In every National budget I’ve heard of there’s plenty of stuff to be cut. But our marvelous politicians are far more creative than I am, these are their decisions:

1)      300 millions cut from railway maintenance budget;

2)      250 millions cut from unemployed assistance budget;

3)      300 millions cut from renewable Energy development budget;

4)       55 millions cut from the funds to be used to employ new policemen;

5)       30 millions cut from the IRS funds.

In the end, the final gem: 600 millions have to be payed from state licensed operators as a compensation from previous frauds (guess what, they do not want to pay).

Total is 1.535 billion. 935 millions from cuts. After five years of hard economic crisis, they cut from the future (unemployed assistance budget, renewable Energy development budget), from matters of public safety (railway maintenance budget) and from the fight against crime (new policemen, IRS funds). Everything for a promise made by Silvio Berlusconi. THIS IS MADNESS.

There’s a final trap. EU is watching closely our National budget administration, there’s a european treaty that impose to every country to stay under a 3% value in the GDP/Debt ratio. In order to be sure to respect this treaty our talented politicians hide a fail-safe clause in the law: in the intended target will not be reached, the difference will be compensated with more cuts.  THIS IS MADNESS.

A little question: do you still think about Italy as a civilized country?

4 thoughts on “A country and a tax – an Italian story

  1. Obviously not.
    Or, at least, not a western civilized country.
    We are crawling towards a very Oriental kind of oligarchy – in which the rich play and the poor pay.
    Our politicians are obviously casting themselves as rich.
    Interestingly enough, the money cut from the Renewable Energies are exactly the money the previous government, one year ago to the day, was forced to put to budget – the RenEn money are in fact a EU fund which Italy cashed in, in 2009, and never used. So they had to find a way to spend it fast or give it back, and they did budget it, in 2012… now in 2013 they “cut” those money; meaning the EU gave the money to us for a purpose, we first ignored them, then we budgeted them, now we are repurposing them.
    Anything, but spend them for what they were meant to be spent for.

    • I didn’t know the crazy money-go-round about EU funds, that’s another proof of our “budget creativity” and another nail in the coffin of our reputation. I find really appropriate the verb “crawling”, it’s the perfect image for today.

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