Tax reform, unions no to cut tax rates and flat tax: “They favor the rich” – Corriere.it

The meeting with the government “didn’t go well either on the merits or on the method”. The deputy general secretary of the CGIL, Gianna Fracassi, is clear in rejecting the meeting at Palazzo Chigi on the tax reform, held in the afternoon of 14 March. During the meeting “there was a description of the enabling law within 48 hours of the Council of Ministers” (the draft enabling law will in fact arrive in the Council of Ministers on Thursday 16 March) and this, for Fracassi, “is not exactly going like this”. First of all, the trade unionist complains about the lack of involvement, while underlining that she «does not agree either on the reduction of the three rates, because it favors high and very high incomes, nor on the flat tax, which is outside the progressive dimension envisaged by the Constitution. We are absolutely not happy and satisfied – cut short Fracassi -. This is not an issue that affects everyone.”

Unions ready to evaluate the mobilization

Therefore, at present, CGIL, CISL and UIL are ready to evaluate mobilization initiatives if the Government does not respond to the demands and priorities indicated by the trade unions on the tax reform. On the other hand, the Ugl takes the opposite opinion, which through the mouth of the secretary general Paolo Capone informs that «the tax reform outlined by the Government represents a significant step forward and goes in the direction hoped for by the Ugl. The simplification of personal income tax is certainly a goal to strive for, to allow citizens to have a greater disposable income – says Capone -. The hypothesis of passing to three rates and as many brackets is therefore acceptable. We are also in favor of extending the flat tax to employee income as well. The alignment between the no-tax area for employees and pensions is also much appreciated – concludes Capone”.

What’s in the draft reform (at a glance)

The tax reform that is about to kick off focuses on the reduction to three brackets from the current four, in order to arrive at a flat tax for all at the end of the mandate (although critics have long been underlining the unconstitutionality of this maneuver, given that the Constitution clearly speaks of fiscal progressivity). The next step will be “to intervene on individual taxes”: adjustments are envisaged for IRES and VAT and on minor “taxes”, which according to the Deputy Minister of the Economy, Maurizio Leo, in some cases “can also be eliminated”, and on the cut of tax expendures (to finance the reduction of tax rates). Finally, the issue of the difference in tax treatment between dependent and self-employed work and pensions. In fact, the draft of the reform speaks of “horizontal equity” to seek a solution to the problem.