Schlein proposes a German-style tax system. But the Italian personal income tax is already more progressive

The secretary of the Pd Elly Schlein a few days ago, at the Festival of the economy in Trento, argued that the tax system must be made more progressive, and that to this end it would be useful to modify the Irpef in the sense of continuous progressiveness. Effectively, for some years in the center-left area there has been much attention for the German income tax, which achieves a progressive levy not thanks to brackets associated with increasing rates, such as the Italian personal income tax, but with a mathematical formula which determines a continuously and regularly growing profile of the average incidence of the tax. In reality, things are increasingly complicated, for example, even in Germany there are actually some brackets, but according to the proponents, the advantages of the German model would be substantially two, one formal – however important – and the other substantial. The formal one is that the tax would become more legible and transparent for the taxpayer, the substantial one lies in the fact that the policy maker could have more degrees of freedom in modifying the curve of progressivity. For example, it would be possible to reduce the personal income tax only on the middle class without also saving high incomes, while if today the rate that weighs on a low bracket is reduced, high incomes will also benefit. The formal point is important, even if the latest interventions have reduced the sharp jumps in the effective marginal rate (how much you pay if you earn an extra euro), making it easier for the taxpayer to understand how the tax works.