The Taxation of Savings: The Italian System and International Comparison

66 Pages Posted: 1 Aug 2019

Date Written: October 4, 2018

Abstract

After a brief review of the economic literature, the paper offers a comparative analysis of the main features of capital income taxation in Italy, the EU and the US. The paper also analyses the recent evolution of capital taxation and portfolio allocation in Italy. The findings point to high heterogeneity in the choice of the type of tax system, taxation level and forms of preferential taxation, suggesting no convergence towards a single model of taxation among countries. However, a common feature of most systems is that capital income is taxed more lightly than labour income. The heterogeneity in the tax treatment of households’ savings is likely to persist in the future; recent developments at international level concerning the transparency of taxation are expected to increase governments’ degrees of freedom in choosing their preferred tax system. Empirical evidence for Italy suggests that the tax burden on financial assets has increased in recent years but the evolution of financial assets over time is not particularly sensitive to tax changes.

Keywords: capital income, taxation, savings

JEL Classification: E21, H24,K34

Suggested Citation

Branzoli, Nicola and Messina, Giovanna and Pisano, Elena and Ricotti, Giacomo and Zangari, Ernesto, The Taxation of Savings: The Italian System and International Comparison (October 4, 2018). Bank of Italy Occasional Paper No. 464. Available at SSRN: https://ssrn.com/abstract=3429827 or http://dx.doi.org/10.2139/ssrn.3429827

Nicola Branzoli

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giovanna Messina (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Elena Pisano

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giacomo Ricotti

Bank of Italy ( email )

Via Nazionale 91
VIa Pastrengo 14
Rome, 00184
Italy

Ernesto Zangari

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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