The Prime Minister and representatives of the government majority, under the leadership of Economy Minister Giancarlo Giorgetti, continue to reiterate that there will be no tax increases in the 2025 budget. They have emphasized many times that they want to reduce taxes by making the cut in the tax wedge structural for incomes of up to 35 thousand euros (about 14 million workers) and by combining the first two Irpef rates, but with adjustments compared to the previous period. the current situation. And so, new hypotheses are emerging for the gradual extension of tax wedge cuts to those with incomes of up to 40 thousand euros per year. What can change?
News about reduction in tax wedge
A new three-stage hypothesis appears on the table of the Council of Ministers, consisting of contributions and tax deductions that will ensure that those with incomes up to 35 thousand euros do not lose even a single euro compared to the past. Then, a decal in the next band to avoid the “threshold effect” that prevents the renewal of national contracts in some cases.
Experts from the Ministry of Finance decided to solve the problem in this way; A contribution deduction of up to 20 thousand euros will later turn into a tax deduction in the range of 20-35 thousand euros, creating a similar effect. There is more than 100 euros net per month on the current payroll. According to what he later said Il Sole 24 OreIt is a decal for the next bands, and the benefits will decrease quite rapidly due to resources, which will decrease as taxable income increases. The measure in question will affect approximately 1.14 million employees, that is, those earning between 35 and 40 thousand euros per year, according to the Ministry of Finance’s latest tax statistics.
Budget plan is awaited
The three-rate Irpef may also become structural with the next budget maneuver. A measure costing approximately 4.3 billion euros. 2.5 billion could also be added to these to reduce the second rate from 35% to 33%, but these are still hypotheses.
While everything depends on the scope of the maneuver, which should ultimately amount to around 25 billion euros, it is hoped that a major contribution will also come from the biennial preventive agreement. On Tuesday, October 15, Minister of Economy Giancarlo Giorgetti will present the Budget Plan (Dpb) to the Council of Ministers, which will make the budget structure clearer. It will be sent to Parliament by October 20, after which it will be sent to the European Union. It will only be possible to proceed after the EU traffic lights.
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.