"Combating tax evasion with AI". Emanuele Felice, Schlein’s economist, speaks out

Rome. It is difficult to discern the decisive month of September from the final bend in July’s road. Yet the key month for the PD is on the horizon: in September, in fact, there will be certainty regarding the electoral law, a decision will have to be made on what to do about the primaries and, before that, says PD Secretary Elly Schlein, the party programme will need to be overhauled. A manifesto which, in broad economic terms, is already taking shape in the mind of Emanuele Felice, Professor of Economic History at IULM University in Milan, a member of the PD’s national executive and head of the party’s economy and labour department during Zingaretti’s leadership. We asked him what, in his view, are the key issues the centre-left must address. “I hope there will be broad consensus,” says Felice, “on the need to tackle Italy’s threefold decline: economic, demographic and democratic. On this issue, the centre-left must challenge the right, under whose government this decline has deepened.” How can we turn this around? “Through a series of reforms and strategic measures that tackle the lack of innovation, low levels of education and inequalities – factors that favour rent-seeking and hinder development.” Where should we start? “With a major tax reform, built around two key pillars: the fight against tax evasion – to be carried out with the help of AI – and the abolition of the flat-rate scheme for the self-employed. The idea is, for the time being, to bring it back under the personal income tax (Irpef) system, setting the same exemption threshold for employees and the self-employed, and then to proceed with a genuine reform of the Irpef system, replacing the tax brackets with a rate calculated using a continuous function, based on the German model. These measures would help to ease the burden on the middle class.” Some on the centre-left are also talking about a wealth tax, and Schlein herself does not consider it taboo. “It is a possible third measure. I would be in favour of it, even if it is not as urgent as the first two.” Who would be subject to this tax? “I am thinking of the model devised by the economist Gabriel Zucman: a 2 per cent tax on those with fortunes of over 100 million. It would affect a few thousand people with predominantly financial assets: high-yield financial investments.” Felice would invest the approximately fifty billion that could gradually be raised “primarily in education and research. An underfunded public education system is a regressive one: if it doesn’t work, the wealthiest still manage to achieve a good standard of education, unlike the less well-off. And today we spend one percentage point less on education than the OECD average: our secondary school teachers are among the lowest paid in Europe, school drop-out rates are very high, and we have a lower percentage of university graduates than many other countries. A major investment, from nursery schools to universities, is therefore a priority.” Furthermore, says Felice, “an institution should be set up to bridge the gap between academia and business, as in Germany”. Other points to include in the programme, according to Felice: “Improving the efficiency and productivity of the public administration, the health service and the justice system with the help of AI. An AI that needs to be governed, perhaps through the creation of a public or public-private agency for data governance”. The bane of political programmes in times of crisis: energy. “We need to reorganise the public enterprises operating in the energy sector to invest in the green transition and divest from fossil fuels.” In some regions (such as Sardinia), the transition has proved complicated. “The green transition must be tackled within the framework of a national plan. It would also be a great development opportunity for Southern Italy.” Elly Schlein often refers to Spain’s “energy model”, although that country does have nuclear power. “Exactly, it’s already there. We, on the other hand, should focus our resources on the green transition, which is currently more cost-effective than nuclear power. If we eventually get to fusion, we’ll discuss it then.” But what about the current situation, with high petrol prices and high energy bills? “You can’t tackle the problem with across-the-board cuts, as the government has done. We could introduce fuel rebates based on ISEE as a stopgap measure. But it is the strategic vision of an Italy that reduces inequalities and innovates that will lead us out of decline.”