Time is running out to reduce the tax wedge. The decree approved by the majority will come soon. “We work to make sure” [il taglio] It can be valid from May. Federico Freni, Undersecretary for the Economy, said this on Radio24. The words of Adolfo Urso, Minister of Enterprise and Made in Italy, should also be recorded. The issue is that the deduction will be 4 points for “low-middle-income workers” and 3 points for other taxpayers (income threshold remains to be understood).
Therefore, benefits for workers should begin as early as next month. The provision, which is expected to be at the end of April, will remain in effect until December 2023. In 2024, other resources will need to be allocated to confirm this. There are currently 3.4 billion euros on the table. Speaking at the Cisal assembly, Urso said the executive plans to “progress gradually through this legislature until it reaches 5 points.” The government’s ambition is beyond doubt. Of course, not much can be done with the approximately three and a half billion allocated for now.
effects on salaries
So how will workers’ salaries change? Assuming that the details of the decree are still unknown, some hypotheses can be put forward. According to preliminary calculations, the cut could mean an amount that could fluctuate between around 25-30 euros per month or between 300 and 360 euros per year in workers’ payrolls for incomes below 25,000 euros. This is obviously a rough estimate. It will be necessary to wait at least for the draft regulation to learn the amounts according to the income bracket.
The 3.4 billion allocated is added to the other 4.6 billion that the Meloni government approved a 2 percentage point income cut of up to 35,000 euros initiated by Draghi, and another percentage point for revenues of up to 25,000. Basically, for many workers, the wedge cut must be doubled.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.