The ballet of taxes: 10 years of cuts and negotiations between the 80 euros, wedge, treasures and tax rebates

From Renzi to Meloni, passing through Conte and Draghi. Four governments. All to bet on the reduction of taxes. The reduction of taxes on labor is a constant commitment of the governments that have followed in the last 10 years. Above all, but not only, the so-called tax wedge is targeted, i.e. the difference due to the tax authorities and contributions between the gross salary paid by companies and the net salary that arrives in the pockets of the worker. To explain, just refer to a single value: in 2022 the Italian tax wedge was 45.9% against an OECD average of 34.6%, and then there is now the need to support wages given that the inflation actually reduces their value.

Meloni Government: In the work decree, just approved by the Council of Ministers, the tax wedge is cut by 4 points for gross income up to 35 thousand euros. Overall, it is worth 3.5-4 billion which, spread over 9 months, according to some estimates, can be worth 80-100 euros per month in payroll. This ‘cut’, which expires at the end of the year with the government’s willingness to find the funding to extend it, is in addition to what was envisaged in the maneuver approved last December. Then the Meloni government refinanced the 2% cut introduced by Draghi up to 35 thousand euros and increased this reduction to 3% up to 25 thousand euros, for a total cost of around 5 billion. In total, the cut for this year is worth 8.5-9 billion.

Draghi government: Before the Meloni government, workers had already seen a 2% wedge cut by the Draghi government. However, the executive led by the former president of the ECB has also reduced the personal income tax, with a maneuver of around 7-8 billion which has brought the foreseen rates from five to four. To this he had initially added a 0.8% cut in the tax wedge (financed with 1.2 billion) fleshed out with another billion with the Aiuti Bis decree. Total 9-10 billion. Added to this – with a clear impact on household accounts – is the arrival of the Single Allowance, which costs a total of around 18 billion a year, achieved by grouping what was provided in the past for various measures in favor of dependent children but for the which additional resources have been allocated for around 6 billion a year. A tax relief, that of the Draghi government, which is therefore worth around 15-16 billion.

Renzi government: Both Prime Minister Monti and Letta had reduced the wedge and taxes on work with a dedicated fund the first and with an increase in personal income tax deductions and the reduction of some insurance premiums the second. With the Renzi government in 2014 comes the 80 euro bonus. A deduction of 960 euros a year for employees with an income of up to 24 thousand euros and with a deduction of up to 26 thousand. The government had calculated an expenditure of around 10 billion and the Upb, the parliamentary budget office, also calculated the cost at over 9 billion.

Conte government: The Renzi bonus was then increased to 100 euros per month, for gross income up to 26,600 euros by the second Conte government, with a reduction of up to 40 thousand euros. The provision, valid only for the second half of 2020, was then made structural with the subsequent Budget law. The extension had cost 3 billion in 2020 and 5 billion in the following year.