Tax wedge cut 2025, Sergio Nicoletti Altimari, head of economic research at Via Nazionale, expressed the doubts of the Bank of Italy in the hearing on the Def. “A further temporary extension of the contribution relief would increase uncertainty about the future evolution of the public accounts” which to date do not include that expenditure, said Nicoletti Altimari. «On the other hand, making the reliefs structural would open up two important questions» continued the head of economic research at Via Nazionale. «First of all, at an aggregate level, the balance between contribution income and outgoings for benefits which, in the medium term, characterizes our social security system and represents its strong point would be lost. Secondly, without a change to the structure of the relief, workers with incomes close to the thresholds below which the benefit accrues would continue to be penalized by high effective marginal rates, with potentially distorting effects on the supply of labour.”
Fiscal wedge cut 2025, costs 11 billion
According to the Parliamentary Budget Office, lconfirming the contribution relief under 35 thousand euros gross per year in 2025 would cost 11 billion. If they were all financed in deficit, underlines Bank of Italy, «the deficit would be higher than the trend described in the Def by one point of GDP per year in the three-year period 2025-2027, remaining above 3% of GDP in all years of the period”. But for Istat, as reported by Corriere della Sera, the greatest impact of the cut in contributions on family consumption and growth would be if the measure were financed entirely in deficit. In that case, says Istat, family consumption would grow by 0.5% and GDP by 0.2 points, but the deficit would rise by 11 billion. If the wedge cut were financed with spending cuts, GDP would fall by 0.1 points compared to the trend, with a very slight improvement in the deficit, which would fall by 600 million euros.
