Istalia

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Moccia "revolutionary" tax reform lands in the Congress

The law now awaits a vote in Congress, where the majority appears solid. It includes highly progressive measures on income, assets, and rents to finance new social and healthcare interventions

The tax reform presented to the press
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August 5664

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ROMULA - Two weeks ago, the State Council approved the new tax reform law, one of the Moccia government's flagship measures. Presented to Congress by the Minister Secretary himself, the reform represents the cornerstone of the majority's economic and social program and, barring any surprises, will easily receive parliamentary approval.

The measure comes after months of bitter controversy from the opposition, but also after intense technical and political work carried out by the Ministry of Finance, which is responsible for translating the government's objectives of solidarity, redistribution, and equity into concrete legislation.

The tax reform approved by the State Council profoundly redesigns the Istalian tax system, with a highly progressive approach aimed at shifting the burden of taxation toward large fortunes, income, and speculative activities, while simultaneously easing the pressure on employment, small businesses, and essential consumption.

• Income Tax
  

Introduction of new marginal tax rates for higher incomes, up to a maximum of 55% for those above a particularly high annual threshold.
Reduction of intermediate rates and expansion of deductions for low- and medium-income earners.
Increase of the tax exemption threshold, expanding the group of fully exempt taxpayers.

• Property Taxation
  

Increase in annual taxes on very high-value real estate assets.
Surcharge on properties and land left unused or held for purely speculative purposes.
Restructuring the inheritance tax to increase taxation on large-scale asset transfers.

• Taxes on financial income
  

Increase in tax rates on dividends, interest, and short- and medium-term capital gains, with progressive taxation based on the total amount of income received.
Increased tax burden on "non-productive" income or income from purely speculative financial activities.

• Financial transaction tax
  

Introduction of a national tax applied to high-frequency, very short-term speculative transactions, with exemptions for productive transactions and long-term investments.

• Corporate taxation
  

Revision of the corporate tax to favor those who reinvest in innovation, research, development, and employment.
Tax penalty for companies that accumulate liquidity without allocating it to productive investments or that concentrate the distribution of profits in the form of extraordinary dividends.


The additional revenue will be allocated to a broad program of social and health interventions, including:

• abolition of the health care co-pay;
  

• introduction of additional targeted deductions for health, education, and family care expenses;
  

• extension of public coverage to previously under-reimbursed drugs, such as many dermatological products;
  

• increase in the number of healthcare workers;
  

• expansion of public coverage to dental and ophthalmology services;
  

• strengthening public psychological assistance;
  

• progressive reduction of university tuition fees, with an expansion of the exemption group;
  

• expansion of the list of goods subject to reduced VAT, now including sanitary towels, contraceptives, formula milk, diapers, and neonatal hygiene products.
  

The opposition is broad and varied. Within the Hosian Democrats, the internal debate has been partly tempered by the general appreciation for the reform's solidarity-based and redistributive approach, in line with the traditional social doctrine of the Church. Many representatives emphasized the importance of the measure in combating inequality. Senator Alessandro Gualdi stated:

We recognize and share the solidarity-based core of this reform. We hope to collaborate with the majority to introduce amendments that can smooth out those points that could be perceived as excessively punitive. But we're moving in the right direction.

Moderate MP Ilaria Vettori was more cautious, expressing concerns about the impact on investment choices:

Our fear is that an excessive increase in the tax burden on capital could push entrepreneurs and investors toward more advantageous markets. We must avoid compromising the country's competitiveness.

The PNL and the center-right forces, however, took a clear stance. The PNL group leader in Congress, Marco Terenzi, accused the majority of "wanting to transform Istalia into a punitive fiscal laboratory". Democracy & Freedom was even more explicit, with MP Carla Monforte stating:

This isn't reformism, it's disguised communism. This is a communist "revolutionary" reform. This is how we drive away investments and jobs.

The government and the majority benches responded immediately. PSD congressman Gianni Paglieri emphasized:

Liberal recipes promised growth, wealth, and stability. In reality, they have produced unprecedented inequality and impoverished the middle class. This reform is an act of social justice, not revenge.

The president of the Social Affairs Congress Committee, congresswoman Elena Porrini (Greens), added:

It's not punitive to ask those who have more to contribute more. It's the principle on which every society that claims to be civilized is founded.

Minister Secretary of State Moccia, in a recent speech at the Faculty of Economics and Finance at the University of Magliano, had already addressed the issue in strong tones, despite the opposition and many economic and social groups raising concerns:

We have been instilled with the idea that if everyone only takes care of their own little garden, then everyone prospers. But this is false. In a market dominated by immense, "intensive cultivation", with disproportionate resources and legal protections, the citizen's little garden is swept away. And those who fail to compete are paved over. We refuse a dog-eat-dog society. It's the way to impoverish humanly and compassionately people, the road to the sloughing of the sense of community and belongingness.

Moccia continued by denouncing the illusion of success measured solely in macroeconomic terms:

What's the point of boasting about a growing GDP if that growth is concentrated in the hands of a few and leaves millions of people with less hope than before? It's not progress if the number of citizens struggling to get healthcare, study, and live with dignity increases. This is the failure of a model that puts individual profit above collective well-being.

The Minister concluded by reiterating the reform's guiding principle:

This law does not take away from those who work and produce. It targets those who accumulate without giving back. And we are not afraid to declare it, because this is how we will rebuild a sense of community and solidarity: by asking for a contribution proportionate to each person's means, as required by the our own Constitution, and also, as required by a society that claims to be "civilized" and "advanced".