The Italian government has recently issued a bill for reforming capital income taxation both at personal and corporate level. This short note evaluates some of the main innovations contained in the government's proposal. As to personal taxation, the reform maintains the demise of accruals taxation and the implementation of a flat rate tax at 12.5% on both capital income and realised capital gains. As to corporate taxation, the government aims at abolishing both IRAP and the socalled "DIT", and at reducing the statutory tax rate down to 33%. The note illustrates the reasons for disposing of accruals taxation as well as the draw-backs of a flat rate tax on the sum of capital income and realised capital gains and losses. Further, the note compares the average effective tax rate on corporate income both pre- and post-reform. It turns out that in its first stage the reform will slightly increase the tax burden on corporate income. The note ends with a discussion of the effect of tax competition on the future prospects of the Italian tax system.