* Berlusconi tax-cut proposal the talk of Italy
* Many sceptical about source of alternative revenues
* Gap with leading centre left narrows in polls
By Philip Pullella
ROME, Feb 4 Silvio Berlusconi's rivals lampooned
him as a snake charmer and a TV huckster selling pots and pans
on Monday after he promised sweeping tax cuts if his centre
right wins Italy's election this month.
The former prime minister launched his "last great electoral
and political battle" on Sunday with a plan to reduce government
spending, enact fiscal reform and what he called a "shock
proposal" - reimbursing Italians for a much-hated tax on primary
residences imposed last year.
Forced from power in 2011 after financial market turmoil
that threatened to push Italy into a Greek-style debt crisis,
Berlusconi has focused his comeback hopes on attacking the
austerity policies of Mario Monti's technocrat government.
"Even an imbecile is able to invent new taxes and impose
them on citizens but only an intelligent person can cut costs,"
Berlusconi said at a rally in Milan, the northern city where he
made his media and real estate fortune.
But the day after, it was Berlusconi who was mercilessly
derided by most newspapers and political opponents.
Corriere della Sera, Italy's leading paper, ran a cartoon
depicting him dressed as a smiling joker in a carnival outfit
throwing coins and banknotes to everyone in his wake.
Monti called Berlusconi "a snake charmer" and accused him of
trying to sell "a dream even more fantastic than that in Alice
Just about the only comfort Berlusconi found in the media
was in a headline in Il Giornale, a newspaper owned by his
family: "Finally, More Money".
The real estate tax, known as IMU, was imposed on primary
residences last year by Monti to help with Italy's financial
crisis, after it had been abolished in 2008 by Berlusconi.
It is estimated to have raised some 4 billion euros ($5.5
billion) last year, a sum Berlusconi dismissed as no more than
0.5 percent of the 800 billion euro annual budget.
He said he would scrap the tax at his first cabinet meeting
and refund payments already made.
He promised to phase out a regional tax on businesses,
reduce personal income tax rates, not hike value added tax (VAT)
or impose a "wealth tax" on higher earners.
"This can work if alternative revenues are found," said
Professor Fabio Marchetti, a tax expert at Rome Luiss
university. "But I think it is rather utopian and demagoguery
because it would make us the only country with no tax on primary
Berlusconi was criticised even by former allies.
Giulio Tremonti, economy minister in the last Berlusconi
government, said reimbursing the real estate tax "would
objectively create a problem for public accounts."
Vittorio Feltri, a journalist who was for years the editor
of Il Giornale, said: "If the state can't find the money to pay
its suppliers or make tax refunds, where is it going to find the
money to reimburse the real estate tax?"
Berlusconi said the money would come in part from striking a
deal with Switzerland to tax financial activities there by
"But a possible accord with Switzerland is still in stormy
waters," said Professor Marchetti, adding that it could never be
worked out before the new government takes office in April.
Berlusconi promised to save money by cutting government
waste, halving the number of parliamentarians, and eliminating
public financing of political parties. Income would come from
new taxes on things he called "not of primary necessity" -
tobacco, gambling and lottery tickets.
"Some people will buy into it and it certainly will have an
effect on some people's voting intentions but the unknown is how
much of an effect it can have," said Marchetti.
Most opinion polls indicate that the centre-left coalition,
headed by Democratic Party secretary Pier Luigi Bersani, will
win the Feb. 24-25 election. But the gap between the centre left
and the centre right has narrowed steadily since Berlusconi
returned to active politics.
($1 = 0.7301 euros)
(Editing by Robin Pomeroy)