Amid great dismay from Italy's struggling middle class, the Italian government dropped a proposal for a levy on high earners approved by the cabinet earlier this month as part of an austerity package aimed at calming the markets by balancing the budget before 2013. The temporary tax, called "SOLIDARITY TAX" would have been five percent on revenues of more than 90,000 euros a year and 10 percent on revenues of more than 150,000 euros. The government emphasised in a statement that the changes to the austerity plan would not alter the overall savings of 45.5 billion euros ($66 billion).
The "solidarity tax" had proved highly controversial within Prime Minister Silvio Berlusconi's centre-right coalition, especially the Northern League which is a key coalition partner in allowing Italy's Prime Minister to stay in power. Berlusconi indicated that this tax was against his tax-cutting principles.
Italy is also planning to cut the number of parliamentarians by half. It makes sense given that Italy has 630 congressmen and 315 senators vs., for instance, the US that, with a population about 6 times larger and a much bigger territory and a way bigger economy, can manage with 435 congressmen and 100 senators.
Are Italians satisfied with this reverse shift on taxation of the so-called rich and reduction in the number of representatives in the Parliament? I think the "solidarity tax" was viewed as a fair step to have the wealthier Italians step up ti the plate and contribute more. In reality it may have caused an increase more of an increase in tax evasion, already rampant in Italy, than a significant growth in revenues.
As per the reduction in the number of parliamentarians? This is even a more complicated issue. Starting in 2005 a new electoral system has been put in place so that for elections to the Chamber of Deputies, each elector casts one vote for a party list. These lists are closed, so electors cannot choose individual candidates in or alter the order of such lists. This has resulted in plenty of frustration from electors and up and coming politicians who are more likely to be excluded from these lists.
That is my impression but I do not live in Italy, so I ask Italians: how do you feel about the current situation?