On annuities. The new intervention on the taxation of financial instruments proposed by the government of Matteo Renzi has revived the debate on savings and its role. Renzi's economic advisor, Philip Taddei, threw water on the fire reassuring that taxation will be remodulated but with criteria and distinguishing between the different sources of savings. But the debate has exploded again. Because the fuse on which it lights is already soaked in oil: in the recent past there was an increase to 20% of the historical rate of 12,5% for most financial assets (except for government bonds) , to which was added the stamp duty and the Tobin tax. Now a new increase to 23%, if not higher, is assumed. And savers are in turmoil. Especially since the economic benefit for some is not so obvious. Much will then depend on how government bonds will be treated, whose returns, as mentioned, are still taxed at 12,5% and not at 20. On the other hand, the increase in taxation on financial income would be an intervention that would align taxation to that on labour, would go with a view to finding resources for other tax relief maneuvers and would harmonize the Italian situation with what is happening in Europe.
If at the moment we are still in the field of hypotheses, what are the first reactions of the main market players? Overall a yellow light arrives from the operators of Piazza Affari: the increase in taxation is feasible only if it is accompanied by other simplification measures and an overall reorganization of taxation and if a distinction is made between the various forms of savings in relation to the financing needs of the growth of the country.
SAVINGS THAT FINANCING GROWTH
“Italian financial wealth is an important resource to be channeled towards growth. If we are going to tax annuities, we must at the same time find a way to channel savings to businesses. The theme is to do it if necessary but in the direction that you find the system to channel these resources towards growth. Any tax measure today must be connected to this and must not lead to penalizing the saver ". Paolo Balice explains to FIRSTonline, president of AIAF. Yes, because there are rents that are transformed into consumption and that finance the real economy. Then there is to understand technically how this can be done. The remodulation can be translated into an incentive for mutual funds that invest in industry or pension funds that invest in minibonds. “One can hypothesize – explains Balice – for example exemptions for those instruments that may be particularly sensitive to catalyze growth towards instruments that help finance companies, for example minibonds.” In this scenario, the increase in the taxation of government bonds could also be accepted, despite the limitations highlighted by many (especially in relation to the limited impact on institutional investors who are taxed on the overall balance sheet and are often foreign. For some, the risk is that the blow would be accused above all by small savers). “We need to understand how much it affects – says Balice – It is a game of spin, it would concern only the coupons and only the resident investors, not those who pay taxes abroad. In any case, since we are in a different phase, I believe that today the emergency does not concern the purchase of government bonds". When some time ago the increase to 20% of the taxation of financial income was started, there was an emergency spread and the goal was to find resources without penalizing government bonds. Today the situation has changed.
SIMPLIFICATION WITHOUT DISTORTION
"In my personal opinion, the issue is more complicated with regard to government bonds, there is no reason to keep them out", Michele Calzolari explains to FIRSTonline, president Assosim who adds: “It is true that most are institutional investments that put them on the balance sheet, but with a view to having taxes that distort as little as possible, there is no reason to keep them out. If you want to make the increase to 23%, then everything must be done. That of small savers is a problem regardless, but the measures must not be distortive”. Like the Tobin Tax which, Calzolari points out, should be removed in Italy, because "it has had significant damage, it has decreased transactions", just as if introduced at European level "it would be a gift to the British". At the moment the only two countries to have actually introduced it are Italy and France while just recently Paris and Berlin have relaunched the project which has accumulated delays in the rest of Europe due to disagreements on the details. In any case, the impact of a reformulation of the tax on annuities would be similar to that of the Tobin Tax on transactions, if only because it would go in the direction of bringing us into line with the tax levels of the rest of Europe. “The real point – Calzolari affirms – is that the general structure of taxation needs to be reviewed, it is not possible for an intervention to emerge every week, it must be done on an overall level, also looking at what happens abroad and avoiding distorting effects. The increase in taxation to 23% can be accommodated but at the same time we have to remove the various mini-taxes that only cause damage (such as the advance and the one-off IRES increase for banks and SIMs, ed.), the problem must be studied and do an overall rearrangement, then that would be an innovative thing”.
Stresses the importance of simplification also Stefano Sardelli, general manager of Invest Banca who considers the hypothesis of an increase in taxation "not far-fetched if and only if it is accompanied by total simplification in financial and fiscal matters”. For Sardelli in particular, it is essential that all the "total taxes" be eliminated which over time have stratified on financial income, creating an incredible "babylon" which "makes the system cumbersome and contributes day after day to eroding our financial industry from which so many investors they went out to other financial centres”. Here too the first example goes to the notorious Tobin Tax. “In addition to having become the "laughing stock" of other financial markets - he says - we have recorded ridiculous revenues compared to what was expected, with very high adjustment costs for the sector industry. Many operators and investors have turned to other financial centers and the overall income of the sector has decreased (and consequently the revenue has also decreased). The lost revenues are by no means compensated by the "crumbs" collected through the Tobin Tax".
THE JUDGMENT WILL COME FROM THE REFORMS FOR GROWTH
Giuseppe Attanà, president of Assiom Forex, the focus for judging this fiscal intervention must be placed on the growth-oriented measures of the system: "If a similar provision - he explains to FIRSTonline - were part of a series of other important reforms, of a structural nature and aimed at relaunching the country (labour, tax wedge , electoral law, debureaucratisation, political cost cutting, spending review, etc.) and if the market judged them feasible as they are supported by an adequate political majority, I do not think there would be any particular repercussions for our markets, since the weight of higher taxation financial situation would be balanced by expectations of growth in the value of the underlying assets". In European countries, the taxation of financial income is varied and in some cases reaches percentages of around 30%. "In Italy - continues Attanà - where the levels of overall taxation (on declared income) are much higher than this rate, this should not be the main problem, but that of the potential and capacity for effective concrete economic growth".
DISTINGUISH BETWEEN PROFESSIONALS AND SMALL SAVERS
Point the finger at the repercussions for small savers Giovanni Daprà, co-founder and CEO of MoneyFarm, an independent financial consultancy company that operates online, for which "the idea of raising the tax rate on financial income lacks a pragmatic analysis of the situation we find ourselves in today" and would be exclusively a "populist" intervention. "A further increase in the tax rate on financial income - he explains to FIRStonline - would affect everyone without distinguishing between those who invest by profession (and for whom assimilation to labor taxation would make sense) and those who aim to protect the value real estate of his money which is already taxed over 50% for the production of that income”. And he adds: "Seen in these terms, we think that an increase in the tax rate can only be justified as a populist intervention, which is part of a generic witch hunt that has been hitting savers large and small for some years and which would have no other effect if not to further discourage the investment of savings, a theme on which in Italy we are already light years behind the Anglo-Saxon world”. And he launches a counter-proposal: “The issue of financial income should be addressed in a more articulated way. Tax-free forms of savings incentives should be created for the small saver who invests with a long-term perspective such as the Anglo-Saxon ISA accounts and clearly distinguish who is a professional investor and who does it only to protect the real value of his money".
