Simulation Shows that IRS Reduction Proposal Benefits More Intermediate Steps
7 Articles
7 Articles
PwC and EY consultants have already accounted for the impact of the decline in IRS rates. Annual earnings can range from just over 20 euros to 340 euros for couples with higher children and incomes.
The new cut in IRS rates between 0.3 and 0.5 p.p. up to the 6th scale will result in a relief for dependent workers and pensioners. Consultant EY simulations point to annual savings between 65.38 and 342.75 euros. Contributors with intermediate and middle-high incomes are those who benefit from a higher annual saving. For salaries of 1,500 euros, the monthly net income increase does not reach six euros.
The PwC consultant concludes that the relative effect of reducing the rates from 1st to 6th levels of yield is not uniform along the scales.
Simulations made by the consultant PwC to the impact of the IRS cut point to annual income gains ranging from 12 to 172 euros, with the intermediate scales to be the most benefited.
PwC concludes that the relative effect of reducing rates from the 1st to the 6th income levels “is not uniform across the levels”.
The decline of the IRS announced by the government will have a reduced impact on the lower wages. A single and childless worker, with a thousand euros gross per month, saves only 12.10 euros per year, while on a salary of two thousand euros the tax relief rises to 100.44 euros.
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