Citizen Income and Flat tax: an effective economic policy for Italy?

In the first chapter we have briefly laid out the features of one of the pivotal themes in economic history, inequality of income. We have seen how the early economist, citing Ricardo and Marx, had put a great focus on such a theme, making it the centre of their inquiries on the nature of modern societies' functioning dynamics. Although important in the early stages of economics, at the beginning of the dissertation we have seen how inequality started to decline in interest as the capitalist economy began to solidify, presenting new risks and challenges. We have then put the focus on how to define and measure inequality. The various definitions come from a vast array of political philosophy currents of thought, from the utilitarian to the anti-redistributive arguments of Nozick, and have all helped to shape the idea today we have of this multifaceted socio-economic phenomenon. The measurement of inequality has been the object of multiple works and research, and in the dissertation we present the most used graphical and algebraic methods for visualising and calculating inequality in a formal way. In the second chapter we presented the features of governments according to influential economist like Stiglitz and Samuelson, thus moving into a deeper analysis of the theme that most relates to this dissertation, that is to say redistribution. Among the inequality-reducing measures, we gave much attention to active and passive labour market policies, with the aim of introducing the theme of Italy's latest policy development in the field. In the intention of the M5S, the proponent of the Citizen Income reform, the footprint of this new policy should have been, at least in theory, that of a universal basic income. In the second chapter we understand that this new active/passive labour market policy proposed and implemented by the former yellow-green government maintains only the aura of the UBI. In the third chapter of the dissertation we take on another important tool that governments have to tackle income inequality and promote redistribution, namely taxation. Our last area of interest is the Italian fiscal and tax policy situation. We reviewed the main forms of national personal income taxation, with brief passages on corporate and indirect taxes such as the VAT; In the last paragraph we took on the analysis of one of the most controversial points of the Government Contract signed by the two political forces of the last government. Indeed, the flat tax reform was spurred by North League interest: after having explored its theoretical main features and compared it with similar proposals made both nationally and internationally, we were able to state that, even though a flat tax does not necessarily hamper the efforts towards more income redistribution if accompanied with a strong set of deductions for lower income shares, it is highly unlikely that in a situation of high deficit Italy would have the political and economic strength to impose such a grand reform, due to budgetary and revenue concerns.