Denmark’s tax reform, cited by Mario Draghi- Corriere.it



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The Danish experience

It is at this point in his speech that Draghi revealed that he is looking at the experience of other countries, realities that teach us that tax reforms, also to prevent the government from being crushed by the demands of specific pressure groups that want to obtain advantages, must be entrusted to experts, who know well what can happen if a tax is modified. For the premiere the better practices comes from Copenhagen. In fact, in 2008 Denmark, which has one of the highest tax rates in Europe, had appointed a commission of tax experts that, after meeting with political parties and social partners, he had presented a project to the Danish Parliament that provided for a cut in the tax burden equivalent to 2 points of GDP. The maximum marginal rate of income tax was lowered, while the exemption threshold was increased, Draghi explained, recalling that a similar method had also been followed in Italy in the early 1970s, when the government entrusted a commission of experts with the task of redesigning the tax system, which remained firm with Vanoni’s reform of 1951, introducing the personal income tax and withholding tax on employee income.

Contain, optimize and maintain progressivity

But what is original about this “Danish method”? In reality, as Carlo Garbarino, Bocconi’s professor, explains, there is nothing extraordinary about Draghi’s example. The 2008 Danish reform proposal is a simple, and not the most surprising example of how things should work and how they work in most Western countries, but slightly less in Italy. As Draghi himself wanted to emphasize, we too had an example of good practice with the great tax reform of 1973, where a technical commission, freed from the slogans of political slogans on reducing taxes, drew up its plan, which then the government, its only real interlocutor, who in turn will decide if and how to present it to parliament, always surrenders. Garbarino believes that it is obvious that today, in Italy, taxes should not be increased to face the crisis because that money will come from Europe, while Draghi illustrates the logic that points the way: contain, rationalize, prune and maintain fiscal progressivity. In short, the prime minister has not said anything that is not normal and correct. But sometimes it bears repeating, Garbarino concludes, those concepts that any tax expert takes for granted and are obvious.

Lintel fiscal reform of fiscal policy

That is why Draghi wants to get his hands on the tax authorities immediately, studying a thorough review of personal income tax with a view, as he explained, to simplify and rationalize the tax structure, safeguarding progressivity and reducing the tax burden. All to combine with the necessary fight against tax evasion, one of the great plagues of our country. Because, as clearly stated in the Chamber, a tax reform marks a decisive step in all countries. Indicates priorities, certainties, offers opportunities, cornerstone of budget policy.

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