Tax, 5 billion cut in benefits to cut Irpef and wedge

“If we agree that the imperative is to reduce the tax burden on families and businesses, it is clear that we must rationalize public spending.” The government, in search of resources to make ends meet for the next budget law and, in particular, to cut the Irpef on the middle class and confirm the reduction of the tax wedge, is targeting wasteful spending. And behind the words of the Minister of Economy, Giancarlo Giorgetti, we can read a clear objective: to focus on the tax breaks granted, at times, with excessive ease. For months the executive technicians have resumed the reconnaissance of tax expenditures, i.e. say the enormous package of tax breaks (deductions, deductions and bonuses of various kinds) through which taxpayers reduce the taxes to be paid when filing their tax returns. This jungle of regulations (there are over 600) is worth around 80 billion and Palazzo Chigi, worried about the spending dynamics (there has been a proliferation of regulations of 50 percent in the last 10 years) is aiming for a cut. By how much? At least 5 billion. Even more would be needed but it is almost impossible because between pensions, work and healthcare, over 70 percent of the tax breaks are untouchable, unless we want to trigger a social revolt.

730 tax return 2024, from superbonus to health expenses and mortgages, education and insurance: all deductions and benefits

However, there are many rumors that, from the school loan of the children of the richest families, from public transport passes to veterinary expenses, there are many benefits that could be cut. Energy investments in road transport are also at risk, while, obviously, contributions to political parties would not run any risk. A traditional inviolable totem in parliament that frequently sparks lively popular controversies.
It should be remembered that already in the last budget law the government reduced tax breaks by cracking down on those who earn more than 50 thousand euros gross per year (we are talking about those who have a salary of around 2,700 euros net per month) of which 260 euros were cancelled. And one of the hypotheses being studied involves tightening the crackdown on this audience. An operation to be carried out with caution, however, as it would have worsening effects on the middle class (the same one for which, with the other hand, it is planned to reduce the Irpef). In fact, already this year it has been established that the reduced bonuses are all those that guarantee a 19% deduction of the expense incurred, for example, on the interest paid for mortgage loans for the purchase of the main home; on school education expenses, including those for degree courses; on rental fees for off-site students; on children’s sporting activity; on public transport season tickets; on expenses for students with DSA; on personal assistance for non-self-sufficient people; on premiums paid for insurance against the risk of death or disability; on veterinary and funeral expenses. In practice this means that given that the 260 euro cut is 19% of the overall expenditure resulting from the items we have just seen, the State eliminates 1,368 euros of deductible expenses incurred from 2024.

Fortunately, the government has “saved” some expenses from the ax which continue to be able to be fully deducted in the tax return that will be presented in 2025 on the 2024 income. For example: medical expenses; expenses incurred for the integration and self-sufficiency of disabled people; the purchase of cars for disabled people; insurance policies for natural disasters incurred in the event of transfer of credit for interventions relating to the Sismabonus. But now these rumors could be put on a diet. Or even cancelled. In fact, the general context pushes the government, in view of the maneuver, to move decisively, supported by the markets. «Our GDP is better than other European countries and the agencies – Minister Giorgetti recalled in these hours – have confirmed our rating and this means that we are working well, in the midst of many difficulties and in a world that is experiencing turbulence non-trivial political and economic nature, just look at the US trade war against China.”

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