“The Horse is Thirsty but has Nothing to Drink”. Labour Cost and the Fiscalisation of Social Contributions (1964-66)

The “fiscalisation of social security contributions” refers to the reform of social security financing that reallocates the burden from payroll contributions paid by employers or workers to general taxation. In the context of this planned transfer, the article focuses on the measures introduced between 1964 and 1966, and shows how they were intended to contain the labour cost rather than serving as a first step towards a comprehensive reform of the social security system. Firstly, the article reconstructs the context in which the first fiscalisation measure was introduced in the summer of 1964. Such context was marked by the 1963 crisis of the lira, followed by a sharp drop in investment, employment and consumption, as well as by the consequences of the creation of the European Common Market. Secondly, it positions the 1964 crisis within the unsuccessful socialist attempt to establish a link between the resolution of cyclical problems and the structural transformation of the social security system. In doing so, the article shows how the 1964-66 debate on welfare funding and labour cost highlighted the gap between objectives, ambitions, and tools of the fiscalisation measures, eventually leading to their reformulation in 1968 as tax relief for companies in Southern Italy only.

Keywords: social security, centre-left coalition, political crisis of summer 1964, harmonisation of social policies, financing of the welfare state, taxation

Giacomo Canepa, “Il cavallo ha sete ma non ha da bere”. Il costo del lavoro e l’introduzione della fiscalizzazione degli oneri sociali (1964-66) in "ITALIA CONTEMPORANEA" 310/2026, pp 36-66, DOI: 10.3280/IC2026-310003