The government has approved the Budget Law for 2026. The coming year
promises to be a crucial milestone for the Meloni government, the last"full" year of the legislature, in which to deploy the tools needed to
build consensus. Elections are in 2027, and the goal is to collect as
many crosses as possible on the ballot paper to stay in power: not such
a difficult feat, given that half of eligible voters now turn out to
vote, and under the current electoral system, winning 25% of the votes
cast is enough to secure a large parliamentary majority. Twelve million
votes and the game is over!
The budget law therefore aims to displease no one and therefore not move
anything: in fact, it is based on cosmic nothingness and serves only to
leave the rich alone. It is a very Draghi-esque measure, completely
inadequate to address the grave emergencies gripping the country, the
economy, society, the world of work, and the living conditions of the
exploited and vulnerable. Starting with the problems that are plain for
all to see: deindustrialization, loss of competitiveness, the healthcare
crisis, job insecurity, tax inequality, and the surge in absolute and
relative poverty.
The Public Finance Planning Document (the framework for the budget law)
presented to Parliament on October 7th openly admitted that growth is
stunted and will remain so: 0.5% in 2025 and 0.7% in 2026 and 2027.
The government's only serious concern is to close the 2025 budget with a
deficit/GDP ratio below 3% (a result described as "fantastic" by the
IMF). This would allow the country to exit the infringement proceedings
by the first half of 2026, allowing a robust rearmament plan to be
launched, financed by debt, with expenditures counted outside the scope
of the Stability Pact (which binds Italy until 2031). Thus, the
government could begin to increase military spending, from the current
EUR45 billion to EUR150 billion per year by 2035, to obey the dictates
of Trump's US and Rutte's NATO: this is what the commitment to increase
spending to 5% of GDP entails. This means that over the next 10 years,
the mediocre leaders intend to spend nearly EUR1 trillion on new
weapons, mostly American-made, but also "Made in Europe," to confront
Russia or other imaginary enemies.
Consequently, the 2026 budget law is completely meaningless: the
underlying trends and the policy framework coincide almost exactly,
which amounts to saying that economic policy is dead, that it would be
enough to put it on autopilot, and that the difference between left and
right is now indecipherable.
The budget consists of EUR18.7 billion (the weakest since 2014), with
EUR10 billion in spending cuts and EUR8 billion in new revenue. More
than half of this new revenue is expected to come from banks and
insurance companies, but based on "voluntary" contributions. In figures,
EUR4.4 billion is expected in 2026, the same amount in 2027, and another
EUR2.5 billion in 2028. A total of EUR11 billion over the three-year
period. But is it credible?
Given that this item represents such a significant amount of revenue,
it's worth taking a moment to recap. In 2023, the government wanted to
tax banking "excess profits" at 40%. Marina Berlusconi (who owns Banca
Mediolanum) became furious and summoned Tajani to earn his salary and
force the government to back down from its plans. No sooner said than
done: the measure changed its nature, and the banks were given the
option of paying the tax or setting aside profits as reserves. No bank
paid anything; they all set aside reserves, a total of EUR6.2 billion.
Not a cent entered the state coffers.
Now the government is asking the banks to release their 2023 reserves
and "free them," that is, pay them as dividends to shareholders. In
exchange, it is offering a preferential tax rate of 27.5% instead of
40%. There is no obligation, only an incentive. The remainder of the
figure would come from a 2-point increase in IRAP (regional tax on
productive activities) and various types of deduction deferrals, as
already envisaged in the 2025 budget law. Banks (and insurance
companies, which are being dragged in with advances on future taxes, to
be subsequently collected from customers) seem unconvinced by this
bloodbath, so whether it will actually work remains to be seen.
Regarding the revenue increase, the other key element comes from the
National Recovery and Resilience Plan (NRRP), which the current
government's prime minister had previously rejected.
But now it's convenient, because five billion euros of European funds
(which there's no time to spend) will be used to replace domestic
resources and will finance the current expenditures of the budget (which
have also been cut across the board by two billion euros).
If we look at the other column, in the shopping list, we find the other
major issue of the law: the issue of personal income tax (IRPEF), which,
as we know, is paid 80% by employees and pensioners. The government is
offering to lower the tax rate on the second bracket
(EUR28,000-EUR50,000) by two percentage points (from 35% to 33%). This
is a paltry saving: those earning EUR30,000 will earn EUR40 more per
year (EUR3 per month), while those earning EUR50,000 will earn EUR440
more per year. The discount applies up to incomes of EUR200,000, so the
largest savings go to those with already higher or even very high
incomes. On the other hand, those earning less than EUR28,000 gross per
year (and that's 30 million taxpayers, including many tax evaders, but
also the majority of the working poor) won't see a single cent returned.
The total cost will be EUR2.8 billion. But the fiscal drag alone over
the three-year period 2022-2024 has taken EUR25 billion in additional
taxes from the pockets of workers and pensioners (a 10-fold increase).
This money will never be returned!
Remaining on the topic of employment, the latest development that
emerged in the final stages involves tax exemptions for contractual
increases obtained in 2026 (or negotiated in 2025), with a reduced rate
of 5% on this portion of wages, but only for incomes under EUR28,000 per
year. The rate applied to productivity bonuses negotiated within
companies would also be reduced from 5% to 1%, a group that covers only
a small portion of private sector workers (less than 5 million).
For its voters and its membership, however, the government is offering a
lot: in addition to maintaining the flat tax (15% rate up to EUR85,000
and a mere 5% in the first five years of activity for new self-employed
workers), we are now offering a fifth tax relief program, which would
cover tax bills issued until 2023, with installments to be paid over
nine years (without penalties). But even this isn't enough: those who
participate typically pay the first installment to avoid legal liens on
their properties, then stop payments and begin evading taxes again, just
as much as before, if not more. One hundred billion euros in tax evasion
per year is the scandalous figure that shows no sign of abating. And the
data points to nearly EUR200 billion in underground economic activity in
2023, an increase of over EUR14 billion compared to the previous year
(the value of a budget!), and over 3 million undeclared workers.
Due to the demographic crisis, the government extended 80% funding for
three months of parental leave and raised the allowance for mothers with
two children and an ISEE (Equivalent Economic Situation Indicator) below
EUR40,000 from EUR40 to EUR60, but the real issue (the precariousness
and poverty of young people's jobs) was not addressed at all. Regarding
access to services based on ISEE (Equivalent Economic Situation
Indicator), the tax-free allowance for the value of a primary residence
was raised to EUR92,000, but the funds to make schoolbook expenses
deductible were not found.
The shocking employment data reveal only that older workers are no
longer able to retire, and the budget law will only worsen the
situation: the sterilization of the extension for life expectancy is not
in place, and starting in 2027, it will begin with a one-month
extension, increasing to two in 2028 (only those employed in arduous and
strenuous jobs are exempt, not those employed early in their working
lives). Far from abolishing the Fornero law: they're making it worse,
both for old-age and seniority pensions. The EUR20 monthly increase for
those on the minimum pension is humiliating.
EUR2.4 billion will go to healthcare, a drop in the ocean compared to
the enormous needs of a sector in a catastrophic situation, with a
shortage of doctors, staff, and the tools to ensure recovery from the
miles-long waiting lists. And 40% of this money will be diverted to
private healthcare, while the rest will be used to renew contracts and
hire a few more doctors and nurses (there are now a shortage of 180,000
across the entire National Health Service, but only 7,000 doctors and
nurses will be recruited).
Even Confindustria (the Italian employers' federation) expressed a
negative opinion before the final version: it was calling for eight
billion a year in new incentives for businesses, to be recovered through
a freeze on personal income tax rates for workers, who have been bled
dry by the fiscal drag. Not to mention that 50% of workers have expired
contracts and that purchasing power, according to ISTAT data, has fallen
by 9% between 2021 and 2025.
In any case, the employers, like the tax evaders, have also been
satisfied, at least those of medium- and large-sized businesses. They
will be the ones to use the EUR4 billion earmarked for Industry 5.0:
180% depreciation for those investing in innovation, and 220% for those
investing in "green" energy transition. This will include the
confirmation of tax credits for SEZs (Special Economic Zones) and ZLIs
(Integrated Logistics Zones), as well as the refinancing of the Sabatini
Law and development contracts.
It is therefore a matter of drawing conclusions and placing a platform
built on social issues at the center of the political struggle, one that
overturns the Melonian approach of the budget law.
A platform that gathers the ideas and proposals that have been present
in the demands of grassroots unions for years, which aim to resolve
structural problems, and which can now find new impetus from the great
cycle of struggle we have just experienced around the Gaza mobilization.
On the one hand, a development model that respects nature and the
environment, which generates new, high-quality jobs and protects jobs.
On the other hand, a social model that guarantees an adequate income for
all workers and retirees, those with temporary and guaranteed
employment, young people and women with an adequate system of welfare
services.
Tax justice must ensure progressivity, but also equal taxation for equal
income, rather than the application of differentiated rates on financial
income, self-employment, and real estate income.
In addition to quality social services, the right to housing must be
guaranteed, through new public housing plans, for the less well-off,
young couples, and students living away from home.
The enormity of social inequality, which has grown in recent years,
requires extraordinary taxation, first a one-off and then a structural
one, on large fortunes and high incomes.
In the coming weeks and months, we must fight to overturn the collective
view of the inane Meloni budget and impose a change in political,
economic, and social strategy.
Giorgetti is pleased that Italy is back in Serie A, according to the
rating agencies. We're tired of being at the bottom of the list for 30
years, when it comes to wages, services, and rights.
Renato Strumia
https://umanitanova.org/una-manovra-senza-margini-legge-di-bilancio-2026-ancora-vantaggi-per-i-padroni/
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A - I N F O S N E W S S E R V I C E
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