Italy’s centre-right government, struggling to avoid defeat in the April 9-10 national election, on Thursday compared its centre-left opponents with vampires sucking the financial blood out of Italian savers.
Supporters of Silvio Berlusconi, prime minister, said the centre-left had slapped one tax after another on citizens when it ruled Italy from 1996 to 2001, and it would do the same if elected again.
“In five years the centre-left governments only knew how to do one thing, with vampire Visco draining the blood from the savings of the Italian people,” said Renato Schifani, a Berlusconi loyalist, referring to Vincenzo Visco, a former centre-left finance minister.
The line of attack indicated that the centre-right, trailing in opinion polls by 3.5 to 5 percentage points until their publication was suspended last week, views an assault on the centre-left’s tax policies as its best chance of pulling off an unexpected victory.
Mr Berlusconi has already alleged that investors are channelling money out of Italy because they dislike a proposal by Romano Prodi, the centre-left leader, to raise capital gains taxes on some government bonds and equities.
Mr Prodi, who was prime minister from 1996 to 1998, told reporters on Thursday: “I don’t want high taxes. I helped Italy enter the eurozone with a temporary tax that I later rescinded.”
He added: “But citizens must know that if they want services, they must pay for them according to their means.”
Mr Prodi said he would not raise taxes on government bonds in circulation but only on new issues. The rate of taxation would rise to 19 to 20 per cent from the present 12.5 per cent.
He also said that he would restore inheritance tax, abolished by the Berlusconi government, but would set it at a level so high that it would affect only “hundreds” of rich people.
Mr Prodi is under pressure to explain how he will fund a 5 percentage point cut in labour costs – worth about €10bn ($12bn, £7bn) or 0.9 per cent of gross domestic product – that is intended to boost Italian competitiveness and domestic demand by reducing employers’ welfare contributions and raising workers’ take-home pay.
He says most of the funding will come from pegging public expenditure at the level of nominal GDP growth, and from a crackdown on tax evasion. In addition, Mr Prodi says about €2.5bn will come from his tax reforms.
Mr Berlusconi and his allies are proposing a variety of tax-cutting initiatives, such as exempting overtime work from social security contributions and reducing taxes on reinvested corporate profits.
The centre-right has not spelled out in detail how it would finance its fiscal proposals but has suggested it will rely on higher economic growth, stronger measures against tax evasion and sales of state-owned assets.
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