A. Giannola C. Petraglia D. Scalera

Regional tax surplus and federal reform. How much will remain of regional and redistributive policies?

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Abstract

In this paper we discuss the validity of the arguments of those who look to the federalist reform as a tool to return to the central and northern regions resources drained by the waste of the Mezzogiorno, highlighting how the confusion between problems of public administration efficiency and legitimacy and intensity of political and regional redistribution might endanger the inter-regional equalization deriving from the progressivity of tax system and the public commitment to territorial rebalancing. More specifically, examining the regional distribution of public spending per capita over the past 15 years, we show that, for both components of current account and capital account, the hypothesis of excessive transfers to the Mezzogiorno is not supported by empirical evidence. The thesis of the excessive size of transfers to the southern regions is then evaluated and rejected on the basis of the comparison between actual and «theoretical» tax surplus that we calculated for the period 2004-2006, corresponding to the regional surplus or deficit implicit in the functioning of a tax system based on a progressive personal income tax (IRPEF) and in the action of territorial redistribution policies which aims at investing in the southern regions a minimum of 45% of total public expenditure on capital account.

Keywords

  • Mezzogiorno
  • Redistribution
  • Tax Surplus
  • Fiscal Federalism
  • Regional Policies for Development
  • E62
  • H23
  • H50
  • H70
  • H77
  • O10

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