World Bulletin / News Desk
A promise of a flat tax by former prime minister Silvio Berlusconi Friday sparked sharp reactions from opponents ahead of a general election and head-scratching among economists.
The remarks by Berlusconi -- who never sought to introduce a flat tax during his three terms as prime minister -- immediately drew criticsm from centre-left former prime minister Matteo Renzi who said he wondered where the money to finance the move would come from.
"The flat tax at 15 percent would cost 95 billion euros ($115 billion), and at 20 percent 57 billion," Renzi said Friday.
A 15-percent flat tax proposal has been part of the platform of far-right Northern League, allied with Forza Italia, for years.
Its supporters says it would replace the current progressive tax rates which run up to 43 percent.
Forza Italia parliamentary chief Renato Brunetta called a flat tax "a revolutionary measure that will relaunch the country after the (current) disastrous government is gone".
Lost tax revenue would be offset by less tax evasion and higher spending power for households, supporters say.
"The crazy people who pay (taxes) now will pay a bit less, and those who don't pay at all will pay in the future," Northern League chief Matteo Salvini said.
But Luigi Marattin, an economist and former Renzi aide, called the flat tax "a colossal joke" and "deeply unfair" because it would benefit mostly the wealthy.
Capital Economics analyst Jack Allen, said imposing a flat tax "wouldn't be quite that simple", possibly violating the Italian constitution which calls for a progressive tax code.
He also said that any positive impact on economic growth "would be negligible" because the government would have to accompany the tax cuts with spending cuts "to avoid a blow-out in the budget deficit".
At any rate, Allen said, it was not certain that Italy's current tax regime is really a constraint on economic performance.
Instead, the government may be better advised to strengthen the business environment by making it easier to start a business, obtain credit and enforce contracts, he said.
Thursday’s vote make Diaz-Canel first person outside Castro family to rule country in almost 60 years
Syrian regime had no clear picture of what was happening to them, says U.S. general, referring to U.S.-led joint attack
Hamas, Islamic Jihad announced plans earlier to boycott scheduled meeting of PLO’s National Council
Canadian provinces at war over future delivery of oil to Pacific countries
Terrorists killed during operations in Saladin governorate
Decision follows Ecuador’s withdrawal as mediator in talks between Bogota and rebel group
The economic damage of trade war will be smaller than its perceived risk, experts say
Top court says in 5-4 decision federal statute is 'unconstitutionally vague'
'Both chlorine and sarin gas were used in the attack,' says State Department spokesperson
Move ‘is just one step in a journey that requires dedication,’ says coffee chain’s CEO
Turkish Air Force targets Zap region in northern Iraq, according to military
German foreign minister calls for reviving political talks after US-led airstrikes on Assad regime
Over $300 million worth of weapons and equipment will go to US allies in Syria if approved by Congress
The Japanese prime minister will make his second visit to Trump's ostentatious Palm Beach, Florida estate, when the focus will be on trade and security.
Still no explanation for illnesses experienced by Canadians, Americans
The ruling comes as the social network is snared in a scandal over the mishandling of 87 million users' data ahead of the 2016 US presidential election.