Heavier payrolls will have the effect of the Meloni government’s intervention in the tax wedge placed in the Labor Decree, launched yesterday, 1 May. But it won’t be forever, just as it won’t be for everyone. Let’s see why and who will benefit from the government’s measure.
The tax wedge is the difference between the amount an employer pays an employee and what is actually in the employee’s salary after taxes and social security contributions. The cut in the tax wedge absorbs about 4 billion, partially offset by Def’s deficit.
For incomes up to 35 thousand euros, the deduction was increased to 6 points in total, and to 7 points for the lowest incomes up to 25 thousand euros. We arrive at these figures because there are two percentage points cuts agreed by the Draghi government (ending 31 December last) followed by the Meloni government approved in the December budget law and strengthened for low incomes. With the new cut, the average increase in payroll is 100 euros per month, according to the estimates of the Ministry of Economy. “A real help against the cost of living and a tangible response to rumours,” says Economy Minister Giancarlo Giorgetti.
According to details of the De Fusco Labor & Legal study reported by 24 hours sun For a worker with a salary of 25,000 euros, the total deduction is 96 euros per month. With a salary of 35,000 euros, the monthly benefit is 99 euros. Let’s look at some examples also reported by Pirate. A gross salary of 10,000 euros (net about 780 euros) already benefits for 2023 from the three-point cut in social security contributions deducted from the paycheck, with a net pay increase of just over 19 euros per month, which will now be due to a new four-point cut Add another 25 euros. The net total will increase by around 45 euros. 67 euros for gross wages of 15 thousand euros (compared to 38.5 euros used so far); 77 euros (compared to 44) for those who buy 20 thousand euros, 96 euros (vs 55) to those who buy 25 thousand euros.
Therefore, the measure is not for everyone, but only for the lowest income earners. And timed, valid from next July to December. If not renewed, paychecks will be extinguished and workers will enjoy a thirteenth month as the Draghi government wedge is cut again (two points) from January 2024. This will cost around $12 billion to refinance, which is a considerable cost if the wedge cut in the Irpef reform, which is also due to take effect on January 1, is not implemented.
“We – underlines Giorgetti – took over a much smaller reduction of two percentage points, everyone said we would not approve of it. We approved it, strengthened it, now we have tripled it for workers earning up to 25k euros a year. year and two for earners up to 35,000. “We did the right thing, especially at a time like this when prices are high and families are struggling. I believe the government has made some difficult decisions after making some sacrifices. Today it can somehow help families in distress.”
Unions, however, take the news in a less enthusiastic tone. “We are faced with a contribution clause in line with our requests, this is a first result, but this is a one-off,” says CGIL general secretary Maurizio Landini. “It is provisional because it is not structural as it is for the next 5 months, it starts in July, the 13th month is not even counted and we are talking about an increase of 50/60 euros per month in addition to what was done before.” This measure, which has been taken, is an important but temporary and insufficient measure to address the problem of preserving the purchasing power of wages,” he underlines.
“Unbelievable – replies the owner of Mef – how controversy can arise after a measure that puts more money in Italians’ pockets. We’ve doubled or tripled the tax wedge. That’s a priority for us”.
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In addition to cutting the wedge, the fringe benefit threshold was raised to three thousand euros, concessions made to employees other than money but appearing on their payrolls. But even in this case, the norm is not for everyone. The increase affects employees with underage children.
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.
