Italian war taxation

«The Economist», 25 dicembre 1915, pp. 1054-1055

The Italian Chamber has voted by 313 votes to 46 the Government’s demand for funds covering the expenses for six months. An Italian correspondent, writing on December 12th, has sent us the following particulars of the new taxation imposed in accordance with the Royal decree of October 15, 1914; the Bill passed in December, 1914, and the Legislative decrees of September 15th, October 12th, and November 21st of the current year. These fall under two heads. First, levies that may become permanent, and, second, taxes of a provisional character. Under this first head the new taxation on income and on business transaction, estimated to produce 100 million lire; military tax, 15 million lire; tax on managers of limited liability companies, 3 million lire; the “war farthing tax”, 58 million lire; modifications in taxes on business transactions, transfers, &c, 43 million lire; modifications of the registration tax, 4 million lire. Estimated total under A, 223 million lire:

The total estimated yield of taxes under (I), i.e., taxes that may become permanent, is thus 307 million lire. The second class consists of levies provisional in character:

The gross total is thus 402 million lire, of which 307 millions may be regarded as permanent resources to meet the permanent expenditure to be faced after the war, and since this 307 millions has been obtained to the extent of ninetenths by taxes on luxuries, and so almost without the imposition on the taxpayer of any sensible burden, there is a considerable margin left for fresh taxation. Nor does it exhaust the expected revenue. M. Carcano estimates that suspension of new appointments and reduction of office expenditure will produce 40 million lire. Since the cost of the war up to October 31st was 4,000 million lire in round figures, even if the monthly average has now risen to 800 million lire, the total to the end of February will be some 7,000 million lire. The revenue from new taxation (350 million lire) equals the interest on seven milliards of public debt at 5 per cent., i.e., the new taxes have so far covered interest on public debt up to the end of February. A point in which reform is much needed, and the opportunity favourable, is the assessment of income to taxation.