Italy delivers tough austerity measures

[Pete]

Italy delivers tough austerity measures

http://www.reuters.com/article/2011/08/12/italy-crisis-idUSLDE77B0OP20110812

".ROME, Aug 12 (Reuters) - Prime Minister Silvio Berlusconi announced a painful mix of tax increases and spending cuts on Friday to meet European Central Bank demands for action on shoring up Italy's strained public finances.........."

It is interesting to read through this because this is kinda' what folks in our country are proposing. Tax increases on high earners and some cuts here and there.

".......The package imposes a 5 percent extra tax on income above 90,000 euros and 10 percent more tax on income above 150,000 euros, as well as increasing the tax rate on financial income to 20 percent from a current level of 12.5 percent........."

Notice that's "extra tax". So if you're earning around 92,000 euros the question becomes Why? Earning 92,000 euros will cost you 4,600 in extra taxes. Why not take a couple of extra weeks off without pay and "make" 2,600 euros.

Does that help or hurt the economy?

[PRB]

I lived in Italy in the 70's and they have other issues. I got to know my landlord pretty well and :
at that time there was no IRS, whatever you said you made as income was your income and of course everyone is honest.
The reason all the houses look 'rundown' outside is your property tax is decided by how your house 'looks'...paint your house-raise your tax.
I suspect their real issue is unreported income.
Hard to compare to our system.
Raising taxes 5% on an income of 90k is a huge hit considering the taxes on everyday stuff, gas, food, everything is hit because they know folks lie about income so they tax the shit out of everything else.

[rdret1]

I believe the EU is looking at it's downfall. The countries on firmer foundations are not going to be able to keep propping up those on shaky ground. Wealthy residents will find a way to protect their assets and avoid the tax increases, while those without the means will still have to pay higher taxes. I believe it is a formula for disaster, just like here.

[mark46th]

As I said in another thread, The Germans are only going to support the rest of Europe for so longBefore they get fed up......

[Utah Bob]

As I said in another thread, The Germans are only going to support the rest of Europe for so longBefore they get fed up......

Part of their master plan? Hmmmmmm;)

[rdret1]

Part of their master plan? Hmmmmmm;)

Do trees still line the roads to the Arc de Triomphe?