Italy PM Renzi cuts taxes for 10 million low earners

[dipsydoodle]

Source: Reuters

(Reuters) - Italian Prime Minister Matteo Renzi on Friday cut taxes for 10 million low earners to try to boost household spending after a two-year recession, making good on a promise he made after taking office two months ago.

Renzi's cabinet passed a decree to reduce taxes for those earning between 8,000 and 26,000 euros a year by about 80 euros per month, starting next month.

The 6.9 billion euros in tax cuts will be funded by a mix of spending reductions, one-off windfalls and a "review" of spending on Lockheed Martin's (LMT.N) F-35 fighter jet, Renzi told reporters.

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Italy is still struggling to recover from a recession that drove youth unemployment to over 40 percent. Real per capita income in Italy, the euro zone's third-biggest economy, is at nearly the same level it was in 1997.

Read more: http://uk.reuters.com/article/2014/04/18/uk-italy-politics-idUKBREA3H0PZ20140418

[Joe Shlabotnik]

1. Maybe he noticed

the thousands of anti-austerity protesters aren't just going away. Dumping the F35 would be smart move too.

[rocktivity]

2. The tax cuts will be funded by "a mix of spending reductions"?

How about raising taxes on Italy's one per cent as well?


rocktivity

[freshwest]

3. Sounds like a mixed bag there:

SPENDING CUTS

To plug the hole in lost revenue, Italy will reduce its spending on goods and services by 2.1 billion euros this year and cap salaries in the public administration for 600 million euros. It will also include 900 million euros in other savings.

One-off measures include a tax windfall from private banks that hold revalued shares of the central bank, which should bring in 1.8 billion euros.

Other areas he mentioned were reducing the number of municipal companies paid for by the state, fighting tax evasion and cutting 150 million euros of spending that had been earmarked for the F-35 fighter.

Renzi did not give details on the "review" of spending for the jets. Italy now has committed to ordering 90 of the (LMT.N) planes for about 12 billion euros, but some in his party have said the order should be halved.

I don't understand about the windfall and the bank, but as members of NATO, they aren't forced to buy F-35s. They can help in other ways.

The guy PBO put in charge of the IMF is focusing on ending poverty above all other things and met with the Pope. Let's see if the people of Italy do better.