CGIL, Italy’s largest trade union confederation, has called on the country’s new prime minister Mario Monti to introduce a wealth tax.
The tax would hit only affect the top richest 5% in Italy, with assets of 800,000 euros or more, and raise 18 billion euros (£15.4 billion) annually for the Treasury.
Taking a similar French tax as a model, it would be set at an average of 1%.
The calculations by the confederation’s own economics experts use the Bank of Italy’s definition of “net wealth” which is defined as the sum of “real activities” (properties, company holdings and objects of value) and “financial activities” (property, deposits, bonds, shares) minus mortgages and other debts.
In addition to raising badly needed funds for the Treasury, the tax address gross inequalities of wealth, says the CGIL.
According to the CGIL, Bank of Italy figures show that
- the richest 10% of families account for 45% of the total net wealth, while
- the poorest 50% of has just 10% of the wealth
- 2.4 million families have on average 1.6 million euros worth of property and financial assets, but
- 12 million families have less than 70,000 euros
- The richest 5% of families have 2.3 million euros in assets on average.
- The richest 1% have 5.3 million euros in assets on average
The figures do not reflect the extraordinary amount of wealth held by the very rich who, like recently deposed prime minister Silvio Berlusconi, legally and illegally hide much of their assets from the tax collectors, thanks to a large degree by the existence of tax havens.
The proposed wealth tax, part of a long campaign by the CGIL for tax justice, would require a “minimum contribution” from the super rich to improve the country’s finances and funding for growth and essential services, says the CGIL.
Up to now, the middle and working classes have born the burden of increased taxes, which together with welfare changes, rising unemployment, real cuts in income through imposed wage restraint and persistent high inflation, have hit high street spending, sending the country into a recessionary tail-spin.
Bar billionaire Silvio Berlusconi’s People of Freedom party, most other political parties says they support some sort of wealth tax in principle.
Berlusconi resigned at the weekend, but with a “technocratic” government in the final stages of being formed it is unclear what influence any elected politicians will have on Italy’s economic and social policies.
More info at www.cgil.it