Inheritance tax tends to be contentious in any country, as this story from Italy proves. The Italian secretary of the Democratic Party has proposed measures that would take money from inheritances of the very wealthy to fund payments to all 18-year-olds in the country in a bid to keep young Italians in Italy.
As reported in Il Manifesto, Enrico Letta suggests all inheritances worth more than €5 million are taxed to pay for this ‘dowry’ given to 18-year-olds to help them pay for their studies, rent or for starting their own businesses. The payment would come from Italy’s top 1 percent of the richest, the so-called rentiers.
The suggestions, however, has not gone down well with Letta’s compatriots. The Italian prime minister, Mario Draghi, responded by saying this was not the time to take money away from citizens. The economy was still in recession and tax reform could not be done piecemeal.
Idea rejected
Other parties did not favour the proposal either, saying that if there was one thing Italy did not need, it was new taxes, and Letta and his party must drop the idea. The Democratic Party’s former group leader, Andrea Marcucci, someone who comes from a very wealthy family himself, said he fully shared Draghi’s reaction.
Italy’s more left-wing politicians favour the move, with the Democratic Party’s deputy secretary, Giuseppe Provenzano, saying that taxing people who were inheriting millions of euros was not ‘taking’ away, but giving back to society, and that the party wanted to give to young people who had nothing or too little.
Letta feels that the dowry for young people is a good way to go and that it was important to finance the initiative without creating more debt. He added that young people had paid a high price to protect the elderly during the pandemic, and that the government must support young people who can’t rely on the help of their families.
Italy’s Minister of Labour said it was an important starting point and that more comprehensive changes might lead to a tax system that shifted the burden from labour to rentiers, and which would be more favourable to the younger generation.
In Italy, the tax rate on inheritances above is only €5 million is just 4 percent, while in France this is 45 percent in France and 30 percent in Germany.
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