He was the thirteenth richest because the cut in the tax wedge was “stable” but also less taxed and new for the self-employed. That’s the direction the government is going. This was explained in an interview by Maurizio Leo, Deputy Minister of Economy and Finance. Corriere della Sera.
It is the government’s will to “absolutely stabilize” the reduction in the tax wedge introduced with the 1 May Decree. “The government – underlines Leo – has strengthened the purchasing power of families in the meantime, given that inflation is still high. But there is also a structural need, so to speak, given the high level of tax contribution margins on workers. So the will is strictly to stabilize the benefit. It is not possible to think about taking back what has been decided to be given next year. It is not possible to consider now. But the financial situation will have to be made very clear. It will be clearer in the autumn with the Def update note”.
Now, he explains, “gross wages of 25,000 euros will reach a net profit of about 100 euros per month, including previous wedge deductions. This is the maximum increase. Over 25,000 and
The total deduction of 35 thousand is six points. So in this range, the advantage will be slightly lower compared to 100 Euros. We will be able to give clearer examples in the coming days,” he said.
Earning less is better with new tax cut: impact on salaries
Personal income tax deduction should begin in 2024, and the wedge deduction can be drawn into this operation. “Deputy Secretary Leo, I believe two paths can coexist even if careful consideration of resources is needed. It’s hard to predict today. 0.5 percent growth with a dynamic of 1.8 percent over the whole of 2023: more important than Def forecasts. significantly higher result (+1 percent)”.
As for the thirteenth-least-taxed, Leo explains that it will go into effect “in 2024, when delegation will begin to apply.” “It also envisages increased flat tax for employees. I believe the thirteenth month can be absorbed as a “additional income” and therefore treated as a discounted rate of 15 percent. So, among other things, a certain household consumption is always resources and forward-looking. Taking into account the fact that escapes are not possible, this will be a very important signal”.
New to self-employed too? Leo predicts, “IRAP will be eliminated for personal companies and professional associations. Then there are simplifications, starting with the tax deadline calendar. Again: for professionals who benefit from employees, we will have a reduction in withholding taxes on their compensation, and the financial neutrality of business combinations. Personal companies in ordinary accounting, will be able to choose IRI by neutralizing the system according to the legal form chosen”.
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.
