Giorgia Meloni’s ‘middle-class’ tax cut sparks political row in Italy

Prime Minister Giorgia Meloni’s plan to reduce income taxes for “middle-class” Italians has sparked criticism that she is helping the rich, with economists warning the cut will mainly benefit Italy’s highest earners.

In its draft budget now undergoing parliamentary scrutiny, Meloni’s government has proposed trimming the tax rate for annual income between €28,000 and €50,000 to 33 per cent, down from 35 per cent, a measure expected to cost about €3bn in foregone revenues. 

Finance minister Giancarlo Giorgetti says cutting the rate on Italy’s second tax band — which will benefit about 13mn taxpayers a year — will ease pressure on middle-class families, whose purchasing power has been eroded by high inflation in recent years.

But the independent parliamentary budget office estimates that about half the value of the tax cut will go to just 8 per cent of the beneficiaries: people with annual incomes between €48,000 and €200,000, who will pay less tax on the portion of their earnings up to €50,000.

That has fuelled a fierce political row. Opposition politicians have criticised the tax cut, and the CGIL, the influential labour federation, has called a national protest strike for December 12. 

“Once again, they are helping the richest,” said Elly Schlein, leader of the opposition Democratic party. “I know they are unhappy when we tell them that, but it’s the truth because it is in their choices.”  

Meloni in turn has lashed out at Schlein’s definition of wealth. 

“The left says we are helping the rich because, according to them, someone who earns say €2,400 per month and has perhaps three children is a rich person who should be hammered,” she said at a campaign rally. “I disagree. These are people who work and need to be helped.”

Giorgetti also rejected criticism, saying Italy’s independent agencies — including Istat, the official statistics agency — had a “somewhat skewed view of life” if people with gross annual salaries of €50,000 were considered wealthy.

“We are being massacred . . . but we are convinced that we are right,” he said, emphasising that the cut wouldn’t help the rich but “those earning reasonable amounts”.

The budget also provides €1.6bn in tax cuts on income from overtime, night shifts, holiday working, productivity bonuses and fringe benefits, a measure that will tend to help lower earners.

The row comes amid simmering public anger at how pay rises have lagged far behind the surge in consumer prices since the Covid-19 pandemic, eroding the purchasing power of Italian workers and civil servants.

According to a recent OECD report, real wages in Italy in early 2025 were 7.5 per cent lower than in early 2021 — the greatest erosion of purchasing power of any major OECD economy.

Romolo Tozzi Di Marco, a physical education teacher in Rome, said many schoolteachers — whose average pre-tax salary is about €30,000 a year — must now scrimp to get by. 

“People are compressing spending on basic stuff like food and healthcare. Vacations, we don’t even talk about any more,” he said.

Alfonso Landolfi, a veteran critical-care nurse at a public hospital near the southern city of Caserta, said Italian public sector workers’ economic status had declined steadily since Italy’s sovereign debt crisis in 2011.

“We no longer have the same social life we had 10, 15 or 20 years ago — spending our free time travelling, enjoying leisure activities, splurging on a car or enjoying dinner with friends,” said Landolfi, who, with 30 years’ experience, has a monthly pre-tax salary of just under €2,000.  

Yet for all the ruckus it has generated, Meloni’s new income tax cut will offer only token relief from the cost-of-living squeeze.  

According to the parliamentary budget office assessment, taxpayers at the top of the earning scale, mainly managers, will have their annual tax bills reduced by about €408; white-collar workers will get a €123 cut and affected blue-collar workers will get relief of just €23.

“This government survives on propaganda,” Di Marco said. “Sooner or later, people will look at their wallets and realise it’s all propaganda.”  

Additional reporting by Giuliana Ricozzi