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LEADERSNEW YEAR - OLD PROBLEMS Giancarlo Cervino Centre for International Fiscal Studies - Lugano The old year was not of the brightest despite the announcements of recovery, even if of a little one, coming from various corner of the Old Continent. The truth is that in the face of: The one positive note is the economic growth of the new ten members of the European Union, that enjoying a fairly younger population, currencies which are not strictly linked to Euro and the possibility of a certain flexibility of work, they will achieve for a decade or more a good growth of which the whole continent will benefit. And what about the old historical members (Germany, France and Italy in the lead)? They have to stare powerless at an evident recession, even if not deep. And from the tax point of view these are the results: The rich and old population is very cautious and knows well that in case of repatriation of these capitals, there is not a young entrepreneurial generation that is ready to make them yield in fruitful investments on the continent but in the Far East and in China. At these conditions it is not necessary to bring them back. Some patriotic ideals, that are still firm and strong in America, where families regularly send its boys to die on the other part of the world to support the economic recovery of the US and the internal safety, seems to be faded recollection, maybe from the too many wars that have afflicted the Old Continent and from the too great blood-sacrifice. And what remains to be taxed? The three P: Provisions, that's to say consumption with the increase of indirect taxes or of direct taxes on commercial activities (people has to eat even if not so much as once upon a time). Poors that, exactly because they are poor, they haven't enough money and interests to emigrate somewhere else. They march side by side to great masses of poor immigrates that are trying to find the Eldorado, already come to an end, but anyway better than nothing. An then here is the Italian Financial Act (that has been copied in other countries too. It is encouraging that our Governors have learned so well to anticipate European trends) that reviews cadastral surveys and declare an infighting war to evasion in the world of house renting, as though it would not be clear that sometimes, between a rented flat with a completely declared rent, and a vacant one, the second solution is better. Taxes and measures, such as the arrangement with the Revenue office, that directly or indirectly try to reduce evasion and the erosion of the income from commercial activities and the poor, that with some shifting of tax rates and some pre-electoral alchemies, are no more that of the ultra low income band, that are probably stationary, but these with income between 50.000 and 100.000 € per year in a single-income family with one or two children, have lost most of their buying power. Everything is well hidden in a one article law with 572 paragraphs and as many regulations, memoranda that make loose sight of the whole picture and of the true motivation of the manoeuvre. But don't worry: not to loose one's bearings, one can go in Germany and see the Financial Act in which with less paragraphs and clearer words, the objectives are the same. And the game is up. Goodness knows why our European cousins and not, refuse to copy our sophisticated and twisted legislative techniques that increase wages of professionals who are called to interpret it, and doesn't make other voters loose their temper because everything is not quite clear to them so they acclaim their governors. The person who let him off steam, has not got unfortunately the magic wand or the recipe for the solution of this historical problem, that would be anyway composed by a mixture of reforms that go from the field of ethics to that of family to that more strictly technical of work and taxes, but is sure that in the European Union, that is now the only possible political way since a dissolution would set a chaos off that could bring to a war, it is necessary the constitution of a strong central power, composed by a politician and a technician to which the task will be given of the development of the economy of the Continent, as it is first of all committed in the USA to the President and to the Governor of FED, assisted by an efficient political staff. The nationality or the position assumed wouldn't be important, but only the purpose free from technical binding because instruments should be built ad hoc for the situation. Without this I think that the decline will be unstoppable
even if this will not bring, as some catastrophist thinks, to the end
of European civilization, but only to its marginalization and integration
in a global context where others will be the main actors.
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