There is a hunt for funds for the 2027 budget. Various promises have been made by the Government which, however, must find the budget to be realised. Meanwhile, the DPFP outlines a neutral and prudent budget law due to the energy and market crisis.
Coverage is needed above all for what appear to be the pillars of the Maneuver: flat tax, widening of the Irpef bracket to 33% and house bonus. The cost items also include the abolition of car tax, early retirement at 64 and much more.
The roofing obstacle
There is not only the budget law to be made, but also the electoral campaign. Many of the proposals for the next budget have the flavor of a promise. But in addition to ideas to entice voters, there are costs to consider. The 2027 budget is not starting off on the right foot: there is not enough money to do everything and the Public Finance Programmatic Document itself says so.
In fact, the Minister of Economy and Finance Giancarlo Giorgetti, having approved the document, describes it as something that “comes in a complex context”, where making predictions can be more complicated.
To make a short excursus of the obstacles it is enough to mention the international crisis, the failure to exit the infringement procedure for excessive deficit, energy costs and inflation. Furthermore, Italy has a high debt, of over 3,000 billion, and the spread has exceeded 100 basis points. Therefore the 2027 budget does not have wide margins, indeed all the measures must be financed with full coverage and it is not an easy game to play.
The promises in Maneuver
Hence the proposals for the maneuver which could be scaled down due to costs. If the Democratic Party focuses on healthcare, the majority looks at pensions, Irpef reform and other points such as car tax and the flat tax.
But there are many other requests from the majority, each one playing for its own image in view of the vote in 2027. Under costs we find:
- the abolition of stamp duty (2.3 billion already allocated for 2027, plus 5 billion euros for the next three years);
- the expansion of the Irpef rate to 33% for incomes up to €60,000 (cost €2.5 billion);
- flat tax on contractual increases, holidays, productivity (cost 2.6 billion euros);
- tax relief on the 13th (half a billion euros);
- flat tax at 5% for newly hired young people under 35 (350 million euros).
What could skip due to costs
These are the proposals that will probably be found in the Budget, while others are less realistic, especially due to the cost, such as:
- early retirement at 64 (1.6 billion euros per year);
- extension of the flat tax for VAT numbers to incomes up to 100,000 euros.
Another unsustainable proposal for the 2027 maneuver is Forza Italia’s request to bring all pensions to 1,000 euros per month. The cost is 18 billion euros per year, which together with all the other social interventions and pension benefits (costing 6.1 billion euros per year) are impossible to find.
Even indexing all pensions, including the highest ones, has a cost of around 12 billion euros, an expense that cannot be supported at the moment.
Where to find resources?
You can always look for resources elsewhere, such as extra profits. As regards the banks’ extra profits, there is the risk of making citizens pay this tax anyway by reducing credit or making it more expensive.
Other resources could come from the fight against tax evasion, but a system is needed to intercept them. In place of this there are amnesties, scrapping, agreements and systems that still allow the category to be rather vague.
In practice these sources, the most economically interesting, risk being only promises in their turn. In practice, we end up looking for resources elsewhere, for example among the 625 items of deductions and allowances which cost around 110 billion a year.
It remains to be understood how this 2027 maneuver will be brought home, it will certainly be prudent as indicated by the Minister of Economy Giorgetti himself.
