How to Solve Italy’s Problems

How to Solve Italy’s Problems – A Manifesto for Italy – Section One

Italy 🇮🇹 Number 1

The first in a series of discussion documents, these articles are designed to help direction-less, leaderless, Italy find workable, practical, solutions to its many problems.

Italy desperately needs direction – and if everyone works together, this can be achieved and Italy can become the envy of the world.

These documents will, I hope, evolve and grow over time and I’d be very happy for Italians, if they wish, to help out by translating them into Italian so other Italians can contribute ideas too. The translated versions will be published on a separate website.

Comments on the manifesto can be made in either Italian or English.

Think of this exercise as a kind of manifesto for Italy, an online, virtual think tank. Forget about the problems – come up with solutions!

Let’s start with a few ideas for tax reform and then take a look at solutions to help businesses in Italy grow and prosper.

Taxation

Broadly reform and simplify the tax system.

Here are some suggestions:

• Make the payment of taxes easier – for example, by increasing retained tax for the self-employed – but

• Make tax refunds faster – over-payments to be refunded every six months, automatically.

• No advance tax payments for the self-employed or for businesses established for less than 5 years.

• Closure of businesses to be monitored to avoid incidences of fraudulent bankruptcy.

• Make “Chinese boxes”, as they are known in Italian – dummy corporations in English – illegal.

• Reward good taxpayers – give them reductions or relief for paying taxes for over 5 years. Further reduction for paying taxes over 10 and 20 years for individuals and businesses.

• Stigmatise tax evasion. Introduce three strikes and out rule for business owners – if caught evading taxes more than three times, they will be forced to sell their businesses which, in the meantime, will be turned over to “angel managers” who are over 50.

Angel managers = Over 50 year olds who are out of work but who were successful director-level managers or ex-business owners.

Property Taxes

• Increase IMU property tax – higher rate for second and other homes, and for businesses. At the same time, reduce income and business taxes.

IMU tax is hard to evade, so monitoring costs are likely to be much lower than keeping an eye on the accounts of 1000s of businesses.

• Reduce IMU for the over 65s and those without jobs – but charge full rate for anyone with a pension exceeding €30,000 a year.

IVA – VAT

• Introduce, or rather, raise the VAT threshold – only make VAT registration obligatory for individuals with income over €75,000.

• Reasonable business expenses to be tax deductible. Commission set up to establish and review business expenses, and then define guidelines for businesses in different sectors.

This would encourage more start ups.

Taxation for Business

Businesses in Italy can find themselves overwhelmed by taxes – too many, and plenty are unnecessary and could be combined into one or two taxes instead of hundreds.

Here are some ideas to render Italy more fiscally friendly to business:

• Lower taxes for business in line with increase in tax revenue obtained via crackdown on tax evasion.

• Oblige all businesses to settle invoices for less than €10,000 within 30 days. Non payment incurs automatic statutory interest. For contracts worth more €10,000 – 60 day payment period – along with statutory interest for late payment.

• Gradually introduce standardised electronic invoices linked to business bank accounts and tax authorities. Tax could be deducted once payment has arrived. Invoicing system could be tied into online bank accounts. Could also be integrated with VAT system.

• Provide tax relief to businesses which employ more than 100 persons full time.

• Provide tax breaks to businesses which increase the number of full-time employees by over 50 in one year.

• Instigate a think-tank to consider introduction of ‘raw materials’ tax. Such a, hard to evade, tax would replace in part or in total corporate taxes. Businesses would not be permitted to raise prices beyond level of inflation for first 3 years after tax adopted.

Business

• Amended: Abolish Article 18 Consider abolishing Article 18 if reduction in bureaucracy and taxes plus increase in availability of credit does not have desired effect. If Art. 18 abolished, minimum salary bands should be introduced – market rate plus 30% – for short term contracts – if employee taken on more than three times under temporary contract arrangement, employment becomes permanent.

• Allow for lower minimum salary levels for full time employees – if Art. 18 repealed.

• Set up informal fast-track Employment courts to resolve employee-employer disputes.

• Oblige banks to give overdrafts to businesses established for less than 5 years.

• Monitor businesses in different sectors to understand real income and real costs. Adjust tax levels accordingly and inspect businesses with income under and over certain thresholds.

Lower than expected income indicates tax evasion. Higher than expected income may indicate money laundering.

• Set up Investment Bonds system. These bonds would be used to finance research, training, new businesses and businesses seeking to expand.

Section Two is now live here.

Feel free to add other suggestions via comments below. The best ones will be added.

Yes we can sort out Italy! And, hopefully, we can prevent Italians from voting selfish rogues like Silvio Berlusconi into power ever again.

Chad

+Alex Roe is from the UK, but has lived and worked in Milan, Italy, for many years. Alex has been interviewed by the BBC on Italy issues. He tweets news and information about Italy to over 37,000 Twitter followers .

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How to Solve Italy’s Problems – A Manifesto for Italy – Section Two

Here is section two of this Manifesto for Italy discussion document on how to sort out Italy and transform it into a nation which works properly. Either Italy’s political leaders have no idea what to do, or, alas, they simply do not want to do what is necessary.

If you want to see section one, scroll above : Section One

Note that I live in Italy and have lived here for many years. You will also discover from articles on Italy Chronicles that I follow Italian politics and many other issues closely. While I would not consider myself an expert, I do know more about Italy than many others, including quite a number of Italians. Yes, that probably comes across as arrogance, but, in my defence, instead of doing what lots of Italians do which is the moan and groan, I’m proposing solutions to Italy’s problems.

Note that I do not regard the USA or the UK as ‘role-models’ and want to see the better aspects of Italy, of which there are a lot, protected and nurtured. Italy has massive potential, but it needs to change to realise it.

Here are some ideas which will help Italian politics and society in general head in a better direction.

Politics

Much greater care in the selection of political candidates needs to be taken – no convicts for anything other than minor crimes such as motoring offences should be allowed into politics or allowed to hold any public office.

Set up a candidate approval commission to vet and then accept or refuse candidates proposed by parties at national and local levels before individuals are added to party lists. Reasonable suspicion, based on investigations by law enforcement authorities, of collaboration or contact with organised crime will be enough to exclude candidates.

Tax evaders must banned from politics for 10 years and required to repay taxes in full with interest.

All candidates prior to entering parliament must swear an oath of allegiance to Italy. This oath would include agreeing to abide by ethical standards and to be impartial. If elected representatives break any of these oaths, they must resign immediately – no votes to be held by other parliamentarians in cases in which elected representatives breach the oath. Breach of oath will lead to exclusion from public office for 10 years.

An oath is taken by ministers in Italy now, but is simply not respected and is effectively worthless, as is evidenced by the conduct of PdL party politicians in the Berlusconi case. It should be an honour to serve one’s nation, instead in Italy, most politicians believe Italy’s citizens should be honoured to have them, convictions and all.

Create a mixed lay and political commission to examine breaches of oath.

All local and national candidates to be selected by binding public primaries held in their constituencies.

Political parties to create and publish a voluntary code of conduct, as Beppe Grillo’s 5 Star Movement has, laying down rules for behaviour and circumstances in which resignation is obligatory. Not respecting the code of conduct will result in politicians being forced to resign and leave either national or local government.

One single house of parliament – prime minister plus president with executive powers – similar to Finland’s political system. President to be chosen by all elected representatives and to last for life of government. President must have excellent, unblemished, political and personal track record.

Politicians who are present in parliament for less than 70% of the time will not be permitted to stand for reelection.

Lawyers representing candidates or elected politicians will not be allowed to stand for election.

Anti-red tape commission to continually review bureaucracy and establish nationwide benchmarks for all bureaucratic procedures. Regional authorities which meet or exceed benchmarks would receive rewards in terms of funding.

Public funding for political parties – but with much greater transparency and accountability. All party transactions to be published on the internet quarterly.

Conflicts of interest – all politicians, senior public officials and party employees to be obliged to declare interests. Omission of interest declarations will lead to exclusion from politics, holding public office and directing a company or non-profit organisation for 10 years.

Cronysim to be eliminated – no government jobs for parents, relatives, and friends. No relatives allowed to work in companies providing services to the government unless full declaration of interest provided and activity monitored. Breaches punishable by instant dismissal for ‘related’ employees and 10 year ban from public office for politicians and public officials involved. A fast-track appeal procedure would be implemented to ensure decisions are just.

Other ideas extracted from the suggestions of reader Kevin Fitton:

All candidates have funding limits, and reduced stipends. Candidates have term limits, so no career politicians. Like in Switzerland, recall procedure for poor performers. This will tend to attract and elect candidates with real world experience and success, who wish to serve their countries for a short period of time, rather than milk the system.

Roll back government, based on the principle that people should be responsible for themselves and their families, rather than expecting the state to provide for them. It’s called the free-market, rather than socialism/collectivism, and the Italians have traditionally believed in this ( hence strong familial ties, regionalism and a relatively undeveloped welfare system compared to many EU countries. – I’m not convinced personally free-market is the way to go and believe regulation is needed to prevent the market taking control – Alex.

As government rules, functions and waste are reduced, the natural entrepreneurism of the Italians can resume. – True – Alex.

Society

Unite Italy properly – eliminate north-south antagonism – this is extremely important and is a priority.

Encourage northern and southern towns and cities to work, cross promote and do business together – festivals, cultural events, trade fairs, education and tourism. Set clear objectives. Reward success. Solve problems. Work to eliminate petty rivalries between towns and cities throughout Italy.

Italian Unity Commission set up to establish objectives, monitor progress and identify problem areas and highlight successes.

Eradicate organised crime – set up special fast-track courts to try organised crime cases. Accessories to organised crime punished. Raise punishments and keep raising them until they function as a deterrent. Use US RICO Act as a model.

Run nationwide and local campaigns from primary school upwards highlighting the disadvantages of crime – many mafia bosses end up dead or in hiding, if not in prison. Stigmatise organised crime. Set up anonymous telephone report line for citizens to report suspicious activities.

Set up anti-organised crime commission to monitor progress and recommend legislation. This does exist more or less, and while it does excellent work, political interference hampers progress enormously. Italy’s parliament must support and champion the work of this commission.

Stigmatise and eradicate corruption – set up anonymous corruption report telephone line. Make punishments for corruption much harsher – minimum 10 years and no parole as a deterrent. Those found guilty of corruption will face 20 ban on becoming the owner or director of a business. Public officials receiving or inducing bribes to face lifetime ban from holding public office and face a lifetime ban on owning or directing businesses.

Request the assistance of the Roman Catholic Church to preach honesty and highlight that crime is a sin.

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Note that these proposals are not exhaustive, but are far more concrete than the vague manifestos offered to Italian voters by most of Italy’s political parties. Well, the results of decades of political ineptness are clear for all to see from the state of Italy today.

Other sections of this manifesto for Italy will follow. Comments, observations and other ideas, more than welcome.

Yes we can make Italy the envy of the world.