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Townhall
Dumb
and Dumber Tax Hikes
Mike Shedlock
Jun 16, 2013
One
of the dumbest things a country
can do in a recession is raise taxes. Yet, after pronouncing the end of
austerity, Italy's "grand coalition" government, led by Enrico Letta,
is going to hike the VAT.
Why?
It seems they need to hike the
VAT to pay for a decrease in property taxes.
Recall
that Silvio Berlusconi was
only willing to take part in Letta's grand coalition on condition
property tax
hikes were rolled back. Letta agreed to do that, but now Letta says
Italy needs
revenue hikes to make up for it.
Grand
Coalition Splintering
Curiously,
the International
Business Times reports Enrico Letta's Grand Coalition Could End Italy's
'Lingering Civil War' .
What
nonsense. Letta's "grand
coalition" is burnt toast already.
Eurointelligence
gets it right.
Il Corriere della Sera and
other Italian
papers are leading with the news that finance minister Fabrizio
Saccomanni and
another cabinet ministers said yesterday that Italy cannot
simultaneously
afford to cut the IMU housing tax and not implement an envisaged rise
in VAT,
and would thus opt to raise VAT.
In
its coverage, La Repubblica
writes that Saccomanni is now becoming a controversial within the
coalition, as
Silvio Berlusconi appears to appear chosen him as a target for his
verbal
attacks. The VAT increase is threatening to drive a gulf between the
two
largest parties, the PD and Berlusconi’s PdL.
Another
Italy Convulsion Coming Up
I
agree with the following comments
from Eurointelligence: "A rise in VAT is probably the worst thing that
can
happen right now ... Italy will miss the 2.9% deficit target, since the
economy
is likely to go into another convulsion once VAT is raised…
Read
the rest of the article at Townhall
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