“Confindustria proposes structural cut in tax wedge for higher salaries in Italy”

To guarantee a higher salary for Italians, the president of Confindustria Carlo Bonomi is asking the Government to make the cut in the tax wedge structural.

With a 16 billion intervention, workers’ wages would increase starting from 2024. Recent years have underlined how higher wages are needed for all workers.

The pandemic first and the increase in inflation then led to the exponential growth of the number of families one step away from the poverty line. And in a civilized country such a situation should be inadmissible.

The Meloni government has planned a new cut in the tax wedge between July and December 2023 but Confindustria aims higher. The proposal is to make this cut structure for an increase in salaries in 2024. Carlo Bonomi has no doubts about the importance of this project and its aim, to increase the payroll of employees with incomes of less than 35,000 euros (the hope is that measures to support self-employed workers will also be implemented at the same time).

Higher salary, the Confindustria proposal

The 4 billion euros allocated to cut the tax wedge between July and December 2023 are a first step – according to Bonomi – but not the final step. Need to go plus the 6% contribution relief for incomes under 35 thousand euros and 7% for incomes less than 25 thousand euros expiring on December 31 of the current year.

The cut will not only have to be prolonged but become structural. It is not just inflation that determines the need for a higher salary. Even when the cost of living begins to fall again, families will need more income to meet all expenses, including taxes.

How to recover resources according to Bonomi

To implement the structural cut in the tax wedge, money will be needed. According to Bonomi to find resources yes could waive the tax expenditure thus collecting 14 billion euros. An acceptable waiver if the Government uses the entire amount recovered to increase citizens’ salaries.

Confindustria, therefore, proposes to the Premier Meloni a review of tax allowances and deductions. Workers would be willing to give up the bonuses received in their tax return, being able to take advantage of a larger monthly income. In addition, Bonomi dwells on the possibility not so much of increasing the current six percentage points envisaged for the relief but of extend the number of beneficiaries by exceeding the limit of 35 thousand euros. And finally, he asks to evaluate the possibility of lowering the cost of labor for companies with a cut in the tax wedge dedicated to them.