The government is considering a cut the tax wedge between 3 and 5 per cent to be achieved by acting on the component of social security contributions. The novelty could see the light in the next budget manoeuvre, but the contours will begin to take shape as early as next month with the presentation of the Economic and Financial Document (Def) and the National Reform Program (Pnr).
For the moment there are no certainties, but only indiscretions. Last Sunday the Prime Minister confirmed the government's intention to include in the 2018 budget a structural reduction in the difference between the gross and net payroll of employees. At the moment the Italian tax wedge, according to OECD calculations, it stands at 49 percent, the fourth highest in Europe together with that of Hungary, and lower only than those of Germany (49,4 per cent), Austria (49,5 per cent) and Belgium (55,3 per cent).
Reducing it is not a simple operation. First of all, you need to decide on who will receive the benefit of the cut: only on businesses (to encourage hiring) or even on the workers (who thus would see their monthly salary increase by a few tens of euros). The government seems to be oriented towards the second option, but it is not said that the distribution is equal. The Treasury and Executive technicians are also evaluating the possibility of granting two thirds of the relief to the employer and one third to the employee.
From the point of view of the workers, according to the calculations of the Uil research office, four wedge points less mean for an average income (24 euros gross) 329 euros net more per year, i.e. 25 euros per month. A cut of five points instead would lead 411 euros extra, equal to 32 euros per month. To get to 38 euros per month (822 euros per year) instead we need to hypothesize a less realistic reduction of the tax wedge equal to 10 per cent.
The real problem, however, is on the cost side. According to the newspaper La Repubblica, if all 10 million Italian employees were included in the scope of the operation, the cut could cost up to 10 billion euros. Too. For this reason, the most plausible hypothesis would be to concentrate resources to facilitate the permanent hiring of young people with contracts with increasing protections introduced by the Jobs Act. In this way the final bill would be drastically reduced, to 1-1,5 billion euros, because each point of reduction in stable labor costs for new entries is worth around 300 million euros.
However, a more demanding intervention to cut the cost of all stable work (ie old and new hires) cannot be excluded. However, the costs would increase exponentially: one point of contributions less is worth around 2-2,5 billion in the initial phase, so it would be really difficult to find these resources without increasing (and by a lot) tax revenues, perhaps letting the VAT goes up again.
Another hypothesis, supported by the Pd, precedes the total decontribution for three years for the first job, to be combined, for the under 35s, with a portable "training gift" to facilitate new job placements following any discontinuous careers.
