Following the news reports on the pompous hearings on budget bill in the Senate I had a moment of confusion and I asked myself if butIstat, Upb and Bank of Italy had moved to Via del Corso 25 where the historic headquarters of the CGILThe common opinion led to the following conclusion: the reduction from 35 to 33% of the intermediate Irpef rate is a gift to the "rich"The annual benefit amounts follow: among employed workers, the average benefit is equal to 408 euros for managers, 123 for employees and 23 for workers; for self-employed workers it is 124 euros and for pensioners 55 euros.
In terms of the average tax rate, the reduction ranges from 0,1 percentage points for workers to 0,4 for employees and self-employed workers under ordinary taxation. The reduction in the legal rate from 35 to 33 percent in the income range between 28.000 and 50.000 euros produces a reduction in the effective average rate, which increases progressively with income starting from 28.000 euros up to a maximum of 0,8 percent at 50.000 euros. Above this point, given the constant tax savings (440 euros), the reduction in the average rate progressively decreases. This is what the UPB has said. But Istat was imprudently not paying much attention to the effects of its words when it wrote in the note delivered to the joint Budget Committees that by ordering families based on equivalent disposable income and dividing them into five groups of equal size, it emerged that over 85% of the resources are intended for families of the richest fifths Income distribution: over 90% of families in the richest fifth and over two-thirds of those in the second-to-last fifth are affected by the measure. Average income ranges from €102 for families in the top fifth to €411 for families in the bottom fifth.
For all income brackets, the benefit results in a variation of less than 1% of family income. In some cases—as with the Falqui Confetto of yesteryear—the word is enough, especially if it's cursed like the plural noun "rich." And at this point the usual litany of increasing inequalities.
In truth, it would have been enough to continue reading the valuable documents filed to re-establish the coherence of the choices made with respect to the government's declared objective of taking into account the incomes of the so-called impoverished and mistreated middle classes from the policies followed by governments up to now. As the Bank of Italy indicated in its Memorandum, the reduction of the IRPEF rate for the second income bracket favors the households in the highest two fifths of the distribution, but with a modest percentage change of disposable income. The effects of the main social assistance interventions, however, are concentrated on the first two-fifths of families and are also modest.
The “rich by law”
For years, at least since the beginning of the pandemic, in Italy the recipients of gross incomes of 35 thousand or more euros and up have been declared rich by law. In fact these taxpayers (if pensioners have seen the revaluation of their pension tampered with) have been excluded from all benefits Various types of measures are designed to offset the effects of the crises that occurred during and after the pandemic, despite the fact that they pay the vast majority of income tax. Indeed, the measures adopted in the 2021-26 period have increased the progressivity of income tax and enhanced the system's redistributive capacity.
The reduction of the second Irpef rate from 35 to 33 percent entails a lower revenue of 3 billion per year. Taxpayers with a total income exceeding 28 thousand euros would benefit from it, increasing the amount up to a maximum of 440 euros per year for incomes equal to or greater than 50 thousand euros. For incomes above 200 thousand euros The benefit could be reduced, even to the point of disappearing: a series of tax deductions6 are expected to be cut, up to the amount of the tax reduction due to the lower rate. This intervention follows other tax and contribution reduction measures, primarily for lower incomes, introduced in recent years.
The Upb estimates
According to the estimates made by the Upb, the reduction of two percentage points will affect just over 30 percent of taxpayers (approximately 13 million, those above the threshold of 28.000 euros of income), resulting in a reduction in Irpef revenue of approximately 2,7 billion, a figure slightly lower than that reported in the Technical Report. 50 per cent of the tax savings goes to taxpayers with income above 48.000 euros, which represents 8 percent of the total. Even these numbers shouldn't be overstated: this isn't a privilege reserved for a select few. Indeed, the number of taxpayers eligible for the benefit is quite small, yet they account for a significant portion of the income tax revenue.
Social security itineraries has always been at the forefront in highlighting the imbalances in tax collection, which reveal data that cannot be attributed to a G7 country because, at the same time, there are too many people reporting incomes at the limit of survival and too few who boast high incomes. The burden is on the The bulk of the tax burden is in fact 15,37% of taxpayers with incomes of 35 thousand euros and above: just under 3,5 million people paying 62,19% of the Irpef amount deriving from dependent work.
Even among the autonomous, the tax burden weighs heavily on incomes of 35 thousand euros and above: above this threshold, the publication in fact includes 36,97% of taxpayers who pay 89,26% of the entire Irpef paid by the category. pensioners with incomes of 35 thousand euros and above they are only 13,94% and pay 46,33% of the IRPEF. In essence, the maneuver on the tax rates does not reward the rich but restores a minimum of fairness in favor of the classes that have directly supported the state's tax revenues without receiving anything in return.
From 2019 to 2023 the State collected 25 billion from fiscal drag. The inflation-inflated outlay was offset in various ways for incomes under 35 euros. The €2,7 billion envisaged in the 2026 budget bill is a partial refund of the fiscal drag for taxpayers excluded from all tax, social security, and social security benefits based on their income.
The Upb Card
- 2026 Irpef measures for middle- and high-income earners: half the benefits for those earning over €48.000.
- From 2021, the fiscal drag will be more than compensated for incomes between 10.000 and 32.000 euros, with a partial recovery for pensioners and self-employed workers.
- Net benefits for families amounting to 18,6 billion in the three-year period, excluding Irpef interventions
- Businesses and self-employed workers are net contributors to the budget for 7,4 billion in the three-year period
The truth that is not admitted
But ultimately, there's a truth that's not being admitted. It's being lamented that between the end of 2019 and the second quarter of 2023 real hourly wages in the non-agricultural private sector they fell by more than 10 percentage points, before rising by around three points until the second quarter of 2025. This is inappropriate – states the Bank of Italy – assign the public budget the task of recovering workers' lost purchasing power, especially when corporate profitability allows this to happen through bargaining. Looking ahead, real wage growth can only be supported by a well-functioning industrial relations system and a revival of labor productivity (which has fallen by more than one percentage point since the end of 2019). Who's going to explain this to Landini?
