Tax, Conflavoro Pmi: immediate spending review or useless reform

But as a reform of the income tax, it would be more important to cut public spending. According to a recently published study by Conflavoro, public spending “in 2022 was 1084.9 billion, equal to 56.8% of GDP, an increase compared to previous years”. The intervention envisaged in the current text of the tax reform, recalls the association, should foresee in the short term a reduction of the brackets from 4 to 3, with the fixing of rates revised downwards. This reduction should be covered with the resources potentially obtainable from a cut in tax expenditures, i.e. the over 600 existing tax deductions and deductions, equal to 165 billion in public spending, possibly leaving out of the cut in tax expenditures only social ones, i.e. expenses related to health and education, dependent interest and other family expenses. “Beyond the desire to reduce the brackets and/or rates, this reform should effectively reduce the taxation of workers (employees and self-employed) and small entrepreneurs. Otherwise – according to Conflavoro – “there is a risk that the review of brackets and rates, based on the confirmation of the principle of progressiveness and with regard to the objectives of horizontal equity, could lead to a redistribution of the tax burden rather than a substantial reduction in taxation”. According to the association ”it is necessary to question the effective guarantee of greater equity of this reform and the realization of a concrete incremental benefit in favor of the lowest incomes, without prejudice to the dutiful need to keep our tax system in balance”. The need to lower the tax burden, recalls the association, ‘”also moves from the burdensome consistency that the Irpef taxation has for employees and self-employed workers, and also for pensioners, in terms of levy, mainly looking at the monetization of amount to be disbursed and not exclusively to the percentages of taxation”. From the data examined, explains CONFLAVORO pmi, it emerges that “in the perspective of an overall review of our tax system, we should at least conduct a more in-depth reflection on the opportunity to cut public spending, which in 2022 was 1,084.9 billion, equal to 56.8% of GDP, recording an increase compared to previous years, also because it is unlikely that the state budget will be able to support a real decrease in direct tax revenues (IRPEF) paid by workers (employees and self-employed) being able to count only on savings deriving from the cut in tax expenditures»’.