Brickbat: Italy’s Wealth Tax

Italy’s proposed 2027 budget includes a new 25 percent exit tax on wealthy residents who move their tax residence abroad with at least €800,000 (about $896,450) in assets. The tax would apply to investment gains that have accumulated but have not yet been realized through a sale, provided the individual lived in Italy for at least six of the previous 10 years. People moving to the European Union or certain other countries could delay paying the tax until they actually sell their investments, but they would still have to pay 50 percent of the tax up front. Critics argue that the proposal is poorly defined, creates uncertainty for investors, and could discourage wealthy people and businesses from moving to or remaining in Italy. The proposal is modeled partly on France’s exit tax, but Italy’s version appears more restrictive because of its up-front payment requirement.