Government, flat tax: what it is, how it works, to whom it will apply

The flat tax, the real one, the one that would replace the income tax brackets, will hardly ever be done, net of electoral promises. It has two substantial problems: it costs a lot, because it erodes a large part of the current revenue and makes the system lose any progressiveness, most likely becoming unconstitutional. The risk is to violate article 53 of the Constitution: “Everyone is required to contribute to public expenses by virtue of their ability to pay. The tax system is based on progressive criteria”. It is called a flat tax, moreover, precisely because it flattens the tax levy and makes it the same for everyone, as a percentage of income, regardless of how much you earn. When we talk about flat tax in relation to the programs of the Meloni government, we must stick to the words with which the premier presented it, in his programmatic intervention and, in more detail, in the replies to the Senate: first he defended the concept of flat tax, with the extension of the income threshold to 100 thousand euros, then added the incremental flat tax, “the flat tax on the increase in income compared to the maximum reached in the previous three years: a virtuous measure, with limited impact for the State, which can be a strong incentive for growth “. The starting point is the current situation. There is a flat tax of 15% for VAT numbers, with gross income of up to 65 thousand euros. The intention is to increase the threshold up to 100 thousand euros. The other measure announced concerns everyone, regardless of income: the flat tax at 15% (but the rate could change) would apply to the increase in income compared to the previous three years. Therefore a share of income is taxed in the traditional way, according to the expected brackets, and the incremental share with the flat tax. One way, Meloni argued, “to reward merit. Whoever does more is right to be rewarded”.