Landini wants to tax 100% of extra profits, without understanding what they are

Olaf Palme, the legendary Swedish Social Democratic leader (who always closed the electoral campaigns in the Volvo assembly) used to say that capitalism is like a sheep that must be looked after with care in order to be able to shear it at the right time, taking care not to let it get cold and to keep it in good health.

Maurizio Landini – pro tempore secretary of the CGIL – sees in private enterprise a class opponent interested only in profit (a value that for the trade unionist is like the Devil’s dung) and which, through trade union struggles and public policies, must be led to actions and behaviors that respond only to the interests of workers: in essence, he must only hire permanent staff, he cannot lay off, he is required to increase salaries without asking for particular compensation on productivity, to cancel the concept of merit. Then, once it has survived this cure, the company must be placed under the care of the taxman. Luciano Lama defined this conception of social relations as the Tecoppa syndrome, that miles gloriosus of the popular theater which demanded that the enemy stand still in order to skewer him.

It is understandable, then, that when the profit becomes even “extra”, Landini’s “fatal wrath” is ignited, because he has his own ethical vision of economic and social problems. Lately the leader of the CGIL has proposed – as a solution to our serious problems deriving from the energy crisis – a taxation of 100% of the immoral extra-profits of companies in the sector; then he took the tumble and included banks and pharmaceutical companies on the list for their extra profits. We know where the soap opera on the extra-profits of energy companies takes its cue from. But we can sum it up by the authoritative Bruno Leoni Institute: «The tax was introduced, at a rate of 10 percent, by the Ukraine-bis decree of March. During the conversion process, without an explanation and without any in-depth analysis, the rate had been raised by two and a half times, up to 25 percent. Since the tax base – continues the note – is not constituted by the profits of energy companies, but by the difference in the VAT balances between two periods (October 2021-April 2022 versus October 2020-April 2021), of which the second largely coincides with a lockdown phase, the impact on companies’ balance sheets has almost no relation to actual profits, and in some cases it can turn out to be unsustainable“.

Landini might reply that a liberal site is willing to listen to the bosses. However, it is a fact that, at the expiry of the advance (June 30), the tax revenue was just over a billion: an amount much lower than the nearly 11 billion estimated. Have the extra-profiters refused to pay? This is the accredited thesis, so much so that some parties have threatened complaints to the Rome Prosecutor’s Office. In the meantime, the deadline by which companies in the energy sector that did not pay the advance on the extraordinary tax on extra-profits expired yesterday (August 31) could repent. Those who have not done so will see to it with the Guardia di Finanza and the Revenue Agency, mobilized for this purpose.

The aid-bis decree of 9 August, the Bruno Leoni Institute still remembers, doubled the penalties and deprived taxpayers of the usual tools available to adjust their fiscal position. It is hardly necessary to recall what these extra profits depend on: inflation and the explosion in the price of gas. As a result, firms benefited from an unexpected influx of their revenues and also profits in proportion to the stocks of products purchased at far lower prices. Obviously, the hen soon stopped laying golden eggs when these companies, having run out of stocks, had to supply themselves to the new onerous new conditions. There are therefore legitimate margins of verification of what the real processes were. We will see the results, however, remembering that Italy is still a state of law. In any case, these are extra profits lump sum.

But, thankfully, what would be the extra-profits of the credit institutions? In my opinion, the suspicious Landini confused the concept of deposits with that of profits. In recent days, a banking union (FABI) has published a report which shows that the banks are full of liquidity. In fact, the financial wealth of Italians would amount to over 5,256 billion euros (with an increase of almost 1,700 billion (+ 50%) in the last decade). In this context – according to the report – liquidity would remain the preferred way of allocating savings.

In fact, cash, once again “the most loved by Italians”, would have grown by 509 billion (+ 45%), going from 1,119 billion in 2011 to 1,629 billion in 2021, with the percentage of money left on current accounts and deposits stable 31% of the total assets. But these resources are not the profits of the banks, but they constitute the savings of the Italians. Since the economic function of the Institutes is that of intermediating credit, the profit comes from the difference between the remuneration of deposits and the interest rates collected on mortgages and investments. If the horse doesn’t drink it doesn’t even get fat; indeed, a large amount of savings in sleep is a negative sign of the confidence of savers. By insisting on this mistake, Landini could encourage the future government to pay an extraordinary tax on overflowing and inert deposits (copyright Giuliano Amato 1992).

Finally, the CGIL secretary’s focus was on the pharmaceutical industry: Let’s imagine that the extra profits derived from anti-Covid 19 vaccination campaigns. But the business was done by the Bigpharma who discovered, produced and sold the vaccines, after having invested considerable resources. The sector – especially at national level – limited itself to following the events. Like the intendency of Napoleon.

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