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Italy Supply Side Policies

1) Tax Cuts on Citizens  Specific Tax Policy:    2020 Proposal -  " a tax set at 15 percent for families earning up to 50,000 euros -- is part of the government contract signed by the League and Five Star, and would concern 50 million people including 35 million taxpayers “We’re working so that the flat tax also involves families, employees,”  Salvini put the cost of his proposal at between 12 billion euros and 15 billion euros in the 2020 budget.  (Bloomberg)  The plan envisions eventually moving to two income tax rates, one at 15 percent and the other at 20 percent for both companies and individuals. The government refers to the two-tier system as a “flat tax” plan, using the English-language term. Arguments Against:  a reported Treasury estimate that a flat tax for families would cost 59.3 billion euros ($67.3 billion).   E ven if the cost of the flat tax were 15 billion euros, that would be “unsustainable.” She added: “We ...
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Components of AD

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Consumer Confidence/GDP Business Confidence/GDP Government Spending/GDP Consumer Spending/GDP Balance of Trade/GDP In what ways do changes in these indicators help to explain changes in GDP? The biggest indicators that helped determine the direction of GDP where government spending  and consumer spending. These two indicators were generally in decent phase with GDP implying that when  consumers and the government are putting their money into circulation and into the nation's economy,  the GDP rises,  which is to be expected. Inversely whenever GDP was high,  consumer and business  confidence was low; and because consumer spending and government spending are in phase with GDP, this means that when consumer spending is high, consumer confidence is low, and vice versa.  This makes sense due to people's  tendency  to believe that when GDP is at a high point, it's bound to come crashing down, hence the low c...
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Data on Italy

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Exports as a % of GDP: 30% - 2016 G eneral government spending as a % of GDP: 50% - 2016 Net investment in non-financial assets as a % of GDP: .985% - 2016 Tax revenue as a % of GDP: 42.4% - 2017 The savings rate as a % of GDP: 0.7% - 2017 Imports as a % of GDP: 26% - 2016 Based on the figures, it has been assessed that as of 2016-17 there was a slightly greater presence of injections most notably due to government spending (50%) and exports (30%). This means that the national output will rise, with more income circulating. The country is towards the end of the boom, and likely it will begin a contraction phase. https://data.oecd.org/trade/trade-in-goods-and-services.htm#indicator-chart https://data.worldbank.org/indicator/GC.NFN.TOTL.GD.ZS?locations=IT&view=chart
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