If you have a salary (or earnings) between 9-28 thousand euros are you really mocked on taxes with the new tax reform? The new tax reform was presented to the Council of Ministers and is starting to modify the taxation system but also the deductions and deductions for Italian workers and citizens.
At the moment there are still several hypotheses of novelties under discussion, some of which, however, will be decidedly less advantageous for some income brackets.
- With a salary (or earnings) between 9-28 thousand euros, taxes are really mocked with the new tax reform
- New deductions in the tax reform and how they affect wages and earnings
With a salary (or earnings) between 9-28 thousand euros, taxes are really mocked with the new tax reform
According to some simulations relating to tax payment calculations with possible new personal income tax rates currently under discussion, those who will really be fooled by the new taxes with the new tax reform are those who receive lower and medium-low incomes, between around 9,000 and 28,000 euros.
The hypotheses of revision of the current personal income tax rates are different and aim to reduce the current four rates to bring them to three. The current four personal income tax rates in force based on income brackets are as follows:
- 23% for incomes up to 15,000 euros;
- 25% for incomes between 15,000 and 28,000 euros;
- 35% for incomes between 28,000 and 50,000 euros;
- 43% for incomes over 50,000 euros.
The first hypothesis of the personal income tax review envisages the following rates:
- rate of 23% for those with incomes of up to 15 thousand euros;
- rate of 27% for those with incomes between 15,000 and 50,000 euros;
- rate of 43% for those with incomes exceeding 50,000 euros.
With these new personal income tax rates, those with annual incomes between 28,000 euros and 50,000 euros a year, i.e. those with incomes between approximately 2,150 euros and approximately 3,700 euros per month, would significantly gain considering that the tax rate would drop from 35% to 27 %. And these would be advantages for those who receive higher incomes.
Instead, they would be penalized those who receive annual incomes of up to 26-27 thousand euros, for which there could be an increase in taxes of as much as 300 euros, and those who receive lower incomes of up to 15 thousand euros would also be penalised. A real joke, considering that a tax review should help those on lower incomes.
Another hypothesis of personal income tax review provides for the following rates:
- rate at 23% for incomes up to 28,000 euros;
- rate at 33% for incomes between 28,000 and 50,000 euros;
- rate at 43% for income over 50 thousand euros.
With this Irpef revision scheme, all income groups would benefit, considering that those with incomes of 25,000 euros a year would pay around 200 euros less in taxes, to reach up to around 700 euros for those with higher incomes.
Even with the third hypothesis of Irpef revision, those who receive lower incomes up to about 28 thousand euros would be mocked. This hypothesis of personal income tax change provides for the following three new rates:
- rate of 23% for incomes under 15 thousand euros;
- rate of 27% for income between 15,000 and 75,000 euros;
- rate of 43% for income over 75 thousand euros.
As can be seen, also in this case, for the first income bracket up to 15 thousand euros, i.e. for those on lower incomes, there would be no advantage, the tax rate remaining at 23%, and the insult would then be for those who receive average incomes between 15 thousand and 28 thousand euros for which taxation would become higher by increasing the relative personal income tax rate from 25% to 27%. Paradoxically, however, taxation would be reduced for those with higher incomes between 50,000 and 75,000 euros.
Finally, the last hypothesis in order of arrival of the Irpef revision provides for the following rates:
- 23% for incomes from 8,500 euros and up to 28 thousand euros;
- 35% for incomes from 28,001 euros to 50 thousand euros;
- 43% for incomes over 50 thousand euros.
This new Irpef revision hypothesis would tend to favor those who receive incomes between 15,000 and around 30,000 euros, for which a reduction in the taxes to be paid would be calculated with consequent increases in earnings, which could, in general, fluctuate between around 50-60 euros per the lowest incomes, in order to favor the highest incomes for which there would be savings between 800 and over one thousand euros.
New deductions in the tax reform and how they affect wages and earnings
The new deductions also affect workers’ wages and earnings which should be finalized with the new tax reform. In fact, the government has clearly expressed its will for a general reorganization of the current deductions at 19% and some bonuses currently available, with the exception of health care expenses, expenses for the education of children and interest expense on mortgages.
For the revision of the deductions in force, the hypothesis of modification currently under discussion provides for different deductions in percentages based on the income earned and which could be the following:
- deductions of 4% of income for the bracket up to 15 thousand euros;
- deductions of 3% of income for the bracket between 15,000 and 50,000 euros;
- deductions of 2% of income for the bracket between 50 thousand and 100 thousand euros;
- no deductions for income over 100 thousand euros.
In this case, there would be no joke for those with lower incomes up to 15 thousand. Conversely, those with lower incomes would have an advantage over those with higher incomes, so the deduction percentage would progressively decrease until it is completely zero for high incomes over 100,000 euros.