Budget law: the income tax cut for the middle class brings blue-collar workers €4. A self-employed worker who moves to the flat tax saves eight thousand

13 November 2026, 16:29

The IRPEF (personal income tax) cut for the middle class in the 2027 budget law works like this: for one year only, the second bracket, the one with the middle rate, rises by five thousand euros of income. In the same budget the government extends the flat tax, the fixed levy that for many self-employed workers takes the place of IRPEF, to those who take in up to €100,000 a year. The name of the measure was chosen by the government; who really gains was counted by the Parliamentary Budget Office and Istat, at this week's hearings in Parliament.

According to the Office, the great majority of managers benefit from the cut designed for the middle class, saving €444 a year on average; among blue-collar workers almost nobody receives it, and the few who do get €4. Households in the less well-off half get nothing. Those who move into the enlarged flat tax, Istat estimates, put aside eight thousand euros a year instead. The middle class, judging by the list of beneficiaries, begins in the director's office.

To understand who pays, one has to look at fiscal drag. When prices rise, wages and pensions are raised so as not to lose purchasing power; if the brackets stay frozen, part of the increase moves into the next rate and goes to the Treasury, even though real income has stayed the same. Istat calculates that in 2027 fiscal drag will bring €5.4 billion into the public coffers, paid by those who remain in IRPEF, mostly employees and pensioners; the middle-class cut, by the same institute's estimate, gives back just under 1.7. The State, in short, returns through the discount less than a third of what inflation brings it in the same year, and keeps the rest without having to write it into any law.

Those in the flat tax, by contrast, never meet fiscal drag, because they pay a fixed percentage that does not change with inflation: the Bank of Italy pointed this out at its hearing. The extension, again according to Istat, costs the Treasury around €400 million a year, lost revenue that falls on all other taxpayers. The Parliamentary Budget Office adds that the gap in taxation «may also encourage the transformation of employment relationships into freelance collaborations with a VAT number». To the worker squeezed by fiscal drag, the budget thus points to a way out: stop being an employee.

In the third quarter more than half of new VAT registrations chose the flat tax; the middle-class cut, among blue-collar workers, will be seen by very few.

This article was prompted by a news item published in Il Fatto Quotidiano on 12 November 2026.