In an effort to maintain consensus, the Government avoids taking
clear-cut positions, abolishes the basic income for 169,000 families,prevaricates on the minimum wage, while announcing its intention to taxextra profits by hitting the banks, but then minimizes and hides itshand . While the new suppressions of the basic income are beingprepared, the prime minister is forced to agree to meet the oppositionto discuss the minimum wage and prepares the meeting by trying to gainconsensus with the announcement of an imminent taxation of the extraprofits of the banks, a measure promptly scaled back in its scope at thefirst storm of fronds from the stock exchanges that sank bank stocks,giving credit to the premier's intentions.The wage questionEven if the confrontation with the oppositions appears limited to theintroduction of a minimum wage, in reality what is at stake is theentire wage issue consisting of the worrying drop in the livingstandards of Italian workers whose wages have not only not increased foryears, but they are being eroded by inflation which, despite thetriumphal tones about its presumed control, in relation to consumergoods and foodstuffs - the so-called shopping cart - is still at levelsof 10.2%.In this situation it is not clear how families and single people with anincome that is below the subsistence thresholds can satisfy their mostbasic needs even if the government points many of these to publicridicule, claiming that they are idlers, who have no intention ofworking. At the same time he forgets that he has decided to encouragepoor work, by reintroducing vouchers, fails to remember that he has donenothing to promote job stability and fight precariousness, as well asthe scandalous practice of introductory work placements carried out forfree, fails to recognize the existence of starvation wages for aplethora of activities that escape regulation through real employmentcontracts.There is a problem of poor work in the country to which the premierresponds by saying that she has doubts about the proposal to introducethe minimum wage, fearing the fear that it could act as an attractiveelement for a downward trend in wages, even below the contractualminimums, when it is proved by the adoption of this institute in all theother countries that have made it their own, that this depressive effecton wages did not exist, but rather that the introduction of the minimumwage acted as a driving force for an improvement overall contractualarrangements.Hiding behind these concerns, the prime minister, during the meetingwith the opposition, dusted off an old tool like the forgotten by allCnel, presided over by an old caryatid of politics that we know well,the ineffable former force worker Brunetta, very well known for damagecaused to the country on several occasions, called to preside over itto have the possibility of recognizing it the benefits resulting fromthe end of its active political commitments.Knowing the person and above all having clear the efficiency of the bodyin charge of investigating the problem and proposing solutions, it isnot wrong to say that it was only a delay, putting away anyintervention, waiting to understand what resources are available tointervene in the sector also in relation to the budget law and to try tofind some resources to allocate to this problem.On the other hand, with respect to this problem, the prime ministerseems to be breathing down her neck given that reliable polls haverevealed that 75% of Italians are in favor of introducing a minimum wageand that this proposal has been endorsed by all of that galaxy thatmoves to the right of his party and is organizing to stimulate it intogovernment action.Banks and extra profitsIt is also for this reason that the premier has opened another front forconfrontation with public opinion by proposing the mild taxation of theextra profits of the banks, a share that should be around 1% of theprofits achieved. In doing so, however, Meloni neglects to acknowledgethat the problem is much wider than that relating to banks and concernslarge taxpayers, starting with the giants of distribution, to followwith the pharmaceutical industries and then continue with the energyindustries, those of arms and so on who have taken advantage of thepandemic and the war to accumulate profits that go beyond than any moreoptimistic forecast. The government claims that it wants to recoverresources in this way to help families with variable rate mortgageswhich have significantly increased on the banks due to the ECB'smonetary policy. Therefore, the levy on bank extra profits has beendefined as a measure of social equity limited to 2023 only, theresources of which will be dedicated to helping pay for mortgages on thefirst homes and cutting taxes.This type of taxation is not new and in economic jargon it is called awindfall tax: it is an extraordinary tax which is provisionally appliedto a group of companies or to an economic sector which is benefitingfrom extremely high earnings, taking advantage of an extraordinarysituation. An example would be a tax levied on companies whose profitshave increased thanks to a war or, as recently happened in Italy andother European countries, which is applied to the extra profits ofenergy companies. In this case, the banks are affected because in thefirst quarter of 2023 the five main Italian banks saw their profits -i.e. the remaining revenues net of all costs incurred - increase by anaverage of 75% compared to the same period of the previous year. Howmuch of this increase is an "extra" profit and how much is a simpleimprovement in performance of the banks is difficult to establishprecisely, and yet the government has apparently decided to use theincrease in profits that the banks have recorded in their interestmargin compared to 2021 as the tax base for the new levy. This margin ismade up of the difference between the rates interest expense, i.e. thosethat borrowers pay on loans, and interest income, i.e. those that arepaid by the bank to those who decide to invest in the financialinstruments it makes available, such as deposit accounts or currentaccounts.For years, rates on current accounts have usually been zero, whileinterest on mortgages have remained low, precisely because the interestrates imposed by the ECB have hovered around 0% in the last decade. Inthis period the profitability of the banks, ie the percentage of netincome compared to the costs incurred, was very low because it was notpossible to have negative lending rates on accounts, so that thedifference between lending and lending rates remained rather low.Now that they have started to increase again, interest expense appliedby banks has increased more than interest income, causing margins togrow. This margin has widened enormously after the numerous increases ininterest rates established by the European Central Bank (ECB) to containinflation. As a result, lending rates have grown more slowly thanlending rates, above all due to the greater bargaining power that bankshave with customers and the increase in interest rates established bythe ECB has led to an increase in the cost of money for households andfor businesses, without there having been an equally rapid increase forconsumers who have deposits in current accounts, indeed banks continuenot to pay any interest on deposits.It is calculated that the new tax should produce an increase in revenuefor the State which would be used to finance families in difficulty withthe payment of the mortgage, but there has also been talk of using theresources for a cut in taxes and the tax wedge and, in its firstformulation, it was assumed that it could have produced revenues ofaround 3 billion euros, but there is still a lot of uncertainty aboutthis figure. In any case, the collected sums would in any caseconstitute a one-off sum , given that it is a single levy, while theexpenditure items that the tax should finance are made up of fixed andconstant costs over time.Furthermore, as is well known, the measures announced by the governmentproduced a deadweight loss on the stock exchange of the bank shareswhich led the Ministry of Economy and Finance on 8 August to disclose ina note specifying that the amount of the tax on extra profits cannot inany case exceed 0.1 per cent of the total assets of each institution,i.e. the set of all the financial assets held by the bank, but it willbe necessary to wait for the official documents, i.e. the decree-government law in order to be able to make a credible estimate, takinginto account that the provision can be modified by Parliament, witheffects on the estimated revenue.The note from the ministry also underlined that the banks that havealready adjusted their rates following the recommendations of the Bankof Italy, ie increasing the remuneration of lending rates, should notsuffer particular consequences from the tax on extra profits. From thisclarification, therefore, it would appear that the measure will onlyaffect banks that are "abusing" their position, discouraging incorrectbehaviour.But the Bank of Italy's recommendation dates back to February 2023,while the tax base on which the tax will be applied - based on theinformation available today - will refer to both this year and 2022 andtherefore also those who have complied with the directives of the Bankof Italy should already pay the new tax from February.The very prudent policy on this measure adopted by the government iscriticized not only by the left-wing oppositions, but also by thepolitical party that is forming to the right of the Brothers of Italy,which claims a social policy of the government inspired by theprinciples of the social right , and therefore converges with therequest of the 5 Stars to extend the tax on super profits topharmaceutical companies that have accumulated astronomical profitsduring the pandemic, to energy companies, which have taken advantage ofwhat happened on energy prices due to the war, on the war industry thatis shamelessly making a profit on the supply of arms to Ukraine,fulfilling requests for the supply of arms commissioned by NATO to theItalian war industry.It will be very difficult for the government to unravel this tangle andresolve the many contradictions connected to the measures it shouldadopt because the interests of much more solid bodies of the state thanthe government majority are affected. Just think of the maininterlocutor as regards relations with the banks constituted by the ABI,which has an extremely solid presidency shared by the banking world. Thegovernment interlocutor can boast a twenty-year presence in themanagerial cadres of the organization he presides over, enjoying theunanimity of the members for a good 10 years, thus being able torepresent a solid interlocutor who has been able to pass unscathed fromrelations with governments of different trends that have followed oneanother in Italy in the last twenty years.In the light of these considerations, negotiations with the BankingAssociation will be difficult for the government and does not promisegreat results, with the political consequence of highlighting how muchthe current government is a prisoner of an economic policy set by theprevious Draghi government, by the Brussels bureaucracy , by the strongpowers in theeconomic and banking fields, by the bosses.Well, the request of the employers as regards the cost of labor isclear: to allow Italy for a long time yet to spend the card of a lowlabor cost as an element of strengthening the competitiveness of Italianindustry and of goods and goods from it produced, both the monetary andexchange leverage being unusable, as well as that of the search for themost favorable economic and commercial relations, due to the constraintplaced on Italy by the current international political situation, bothwith the sanctions against Russia and through the questioning of Italy'saccession to the Silk Road Treaty.It is therefore that the government seems to focus almost exclusively onthe use of the tax lever, reducing taxes on labor and reducing the taxwedge, with the result that the lowering of taxes inevitably correspondsto a reduction in revenue which reverberates on the services provided.The diminished availability of resources increases the cost of servicesfor users forced to turn to private structures, who receive a reducedindirect salary due to diminished services in the field of education,health care, services and anything else needed to improve the conditionsof life of the populations. In other words, the reduction of taxesserves the rich, while the decrease in services affects everyoneindiscriminately, penalizing more the lower classes and those most inneed of resorting to collective social resources.The editorial staffhttp://www.ucadi.org/2023/08/18/cerchiobottismo-meloniano/_________________________________________A - I N F O S N E W S S E R V I C EBy, For, and About AnarchistsSend news reports to A-infos-en mailing listA-infos-en@ainfos.ca
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