Prime Minister Giorgia Meloni’s plan to reduce income taxes for Italy’s “middle class” has ignited fierce political debate, as critics argue the measure disproportionately benefits higher earners and offers little relief to ordinary workers struggling with inflation.
The Proposed Tax Cut
Under Italy’s draft 2025 budget, now under parliamentary review, Meloni’s government proposes lowering the tax rate on annual incomes between €28,000 and €50,000 from 35% to 33%. The measure, costing about €3 billion in lost state revenue, would affect roughly 13 million taxpayers.
Finance Minister Giancarlo Giorgetti defended the move as a necessary step to support middle-income households whose purchasing power has eroded amid surging living costs. “We are convinced that we are right,” he said, rejecting claims that the reform favours the wealthy. “Those earning reasonable amounts deserve relief.”
Criticism and Economic Concerns
The independent parliamentary budget office paints a more nuanced picture. It estimates that half of the total benefit will go to just 8% of recipients — mainly those earning between €48,000 and €200,000 annually. These higher-income earners will see a reduction in the tax applied to the portion of their earnings up to €50,000, leaving many economists questioning the fairness of the measure.
Opposition leaders have accused the government of catering to the rich under the guise of helping the middle class. Elly Schlein, head of the Democratic Party, criticised the reform as “a handout to the wealthiest,” saying:
“Once again, they are helping the richest. These are political choices that reveal where their priorities lie.”
Meloni pushed back, arguing that her opponents have a distorted view of wealth. At a rally, she said:
“According to the left, someone earning €2,400 a month with three children is a rich person who should be punished. I disagree — these are people who work and need to be helped.”
Giorgetti echoed her sentiment, accusing Italy’s statistical agencies of having “a skewed view of life” if they consider individuals earning €50,000 a year wealthy.
Limited Gains for Workers
Despite the political rhetoric, the actual benefits for most Italians are modest. The budget office estimates that:
- High earners such as corporate managers will save about €408 per year.
- White-collar professionals will see about €123 in tax relief.
- Blue-collar workers will gain just €23 annually.
The government also plans an additional €1.6 billion in tax incentives for overtime, night work, productivity bonuses, and other wage supplements — measures expected to aid lower earners marginally more.
Still, economists say the reforms fall short of addressing the deeper problem: Italy’s declining real wages.
Erosion of Purchasing Power
According to the OECD, real wages in Italy in early 2025 were 7.5% lower than in early 2021 — the steepest drop among major advanced economies. Years of sluggish wage growth, combined with soaring prices for essentials such as food, energy, and housing, have left millions of Italian households struggling.
Romolo Tozzi Di Marco, a physical education teacher in Rome earning about €30,000 a year, said he and his colleagues are cutting back on necessities:
“People are compressing spending on basic stuff like food and healthcare. Vacations? We don’t even talk about those anymore.”
Similarly, Alfonso Landolfi, a critical-care nurse in Caserta with 30 years’ experience, said life for public workers has deteriorated since the 2011 debt crisis:
“We no longer have the same social life — travelling, dining out, or buying a car are no longer options.”
Political Fallout and Public Discontent
The controversy has already spilled into the streets. Italy’s largest labour federation, CGIL, has called a national strike for December 12, protesting what it describes as an “unfair and misleading” tax policy.
For many Italians, the numbers confirm their suspicions. “This government survives on propaganda,” said Di Marco. “Sooner or later, people will look at their wallets and realise it’s all just talk.”
A Divided Definition of the Middle Class
Meloni’s tax plan underscores a widening divide in Italy over what it means to be “middle class.” To her government, the policy targets working families squeezed by inflation. To critics, it is a political gesture that fails to meaningfully address wage stagnation or inequality.
As the debate intensifies in parliament — and on the streets — the question remains whether Meloni’s “middle-class” tax relief will provide real help to ordinary Italians, or simply deepen the perception that her government’s economic policies favour the few over the many.
