Irpef rate of 35% for average incomes. Tax wedge, that’s who earns it

Irpef rate of 35% for average incomes. Tax wedge, that’s who earns it
Irpef rate of 35% for average incomes. Tax wedge, that’s who earns it

It is a tug-of-war within the majority over the distribution of the 8 billion fund destined to cut taxes and mainly to reduce the so-called tax wedge (the sum of taxes that impact on labor costs). But if, as can be expected, about half of those resources were used for a three-point scissoring at the rate of 38 percent and, therefore, to implement a first step of the tax delegation passed by the government, the (limited) advantage would be to incomes over 28 thousand and up to 55 thousand euros gross per year. Therefore, up to 28 thousand euros there would be no change compared to the current situation, at 40 thousand euros the benefit would be around 360 euros, 50 thousand on 660, 75 thousand on 810 euros. Pension reform: …

AND arm wrestling within the majority on the distribution of the 8 billion fund destined to tax cut and mainly to the reduction of the so-called tax wedge (the sum of taxes that impact on the cost of labor). But if, as can be expected, about half of those resources were used for a three-point scissoring at the rate of 38 percent and, therefore, to implement a first step of the tax delegation passed by the government, the (limited) advantage would be to incomes over 28 thousand and up to 55 thousand euros gross per year. Therefore, up to 28 thousand euros there would be no change compared to the current situation, at 40 thousand euros the benefit would be around 360 euros, 50 thousand on 660, 75 thousand on 810 euros.

Pensions reform: 104, rising from 102 (and possibly 103). The scenarios

To draw the first conclusions, through the simulations reported by our newspaper, are the experts of the Studio VEF & Partners Spa in Milan of Professor Vittorio Emanuele Falsitta. “On the basis of the indiscretions that have emerged so far – explains the lawyer Andrea Aliberti, of Studio VEF – it is likely that for the year 2022 the ‘financial dowry’ destined for the reform of the tax system will be spent largely for the revision of the Irpef rates in the next budget law reduce the rate by 38% on bracket between 28,000 and 55,000 euros. And, moreover, the ‘jump’ from the 27% rate of the previous bracket to 38% has always been strongly criticized and Minister Daniele Franco himself has precisely identified the inequitable distribution of the personal income tax rates as one of the main causes of the tax wedge “.

A benefit of the intervention – points out the professional – “would be the middle class workers and taxpayers as well as employers who would find themselves ‘anticipating’ minor tax withholdings “. But how much could the tax discount amount?” Based on the data published by the Mef Department of Finance (2019 declarations), it is possible to estimate – Aliberti specifies – that if a little less than half of the 8 billion euro dowry is allocated (since it is likely that other interests will converge on the same “dowry”) to the intervention on the 38% rate for the 28,00055,000 euro bracket, a 35% reduction would be possible “.

With the three-point rate reduction (but we must pay attention to the contextual promise already made to revise tax deductions and deductions) it would be, by approximation, that an employee who earns 28,000 euros would pay the same amount as today; an employee earning 50,000 euros would pay around 660 euros less (with a 4% reduction); an employee earning 75,000 euros would pay around 810 euros less (in this case the reduction would be 2.9%). Relatively modest benefits, as you can see.

But it’s not just about figures and numbers. It is the same setting of the delegation that is not convincing. The project of tax reform-maintenance, according to more than one insider, presents quite a few critical issues, starting with the basic criterion “of preserve progressivity“. In this regard, Professor Falsitta directly warns:” For many decades now, progressiveness has not been a way of being of the taxation curve on personal income, and it is for this reason that, in the system, there are, even, regressive places. Pretending, by means of the main guiding criteria of delegation, to preserve something that is not there – therefore to behave as if it were – seems to be an exercise in illusion that we do not understand. With an aggravating circumstance: the desire to expand and petrify a dual system of income taxation (of capital with a proportional rate and of work and pension with a progressive rate) which is precisely one reason for the rarefaction of progressiveness “.

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