Giorgetti promises further tax relief for young people once again. Yet the money is only ever found for pensions.

September is generally the month when the Minister for the Economy, Giancarlo Giorgetti, turns his attention to young families. “Lower taxes for those with children” was the principle behind a measure devised by the Ministry of Economy and Finance (MEF) at the end of the 2024 summer holidays: the idea, first reported by Il Foglio at the time, was the introduction of “a family quotient for tax deductions” which would have cost 5–6 billion euros and which, probably for this very reason, never came to fruition. In September 2025, when ideas for the budget were being put forward, Il Messaggero reported on a new proposal from Giorgetti to cut taxes for those raising children: a ‘super deduction’ for mothers of 2,500 euros for the first child, increasing by 5,000 euros for each additional child. But nothing came of it at the time.

This September, during the 2026 season, at the Lega event ‘A tua difesa – verso la Finanziaria 2027’, Giorgetti launched a new proposal that no longer concerns those having children but young people more generally: a ‘tax incentive’, to be agreed in conjunction with employers’ willingness to raise wages, which would operate as a ‘flat tax’ on the increase in salaries. The aim is to prevent young people from emigrating abroad. The mechanism is not new to the centre-right. Essentially, it would be a new version of the so-called ‘incremental flat tax’ that the government had introduced (at 15 per cent) in 2023 for the self-employed, but which lasted only one year. Last year, the same system was applied to contract renewals. 

In the 2026 Budget Bill, the government has introduced an ‘incremental flat tax’ on contract renewals to support wages. The measure, which has been particularly welcomed by the UIL – which, for the first time in this parliamentary term, has left the CGIL to organise the general strike on its own – provides for a substitute tax of 5 per cent on pay rises resulting from contract renewals for private-sector employees, 15 per cent on allowances for night work and work on public holidays, and 1 per cent on performance-related bonuses up to 5,000 euros. The tax relief, which is temporary and applies for just one year, has nevertheless been welcomed by the trade unions as it is seen as a kind of lubricant for negotiations with employers’ representatives on the renewal of national collective agreements, which are struggling to restore the purchasing power eroded by inflation.

It was Giorgetti himself who referred to the ‘great success’ of the tax relief on the renewal of national collective labour agreements and spoke of ‘something similar’ for young people. However, it is not yet clear how this generational incremental flat tax is intended to work.

If, as it appears, this is a measure that operates at an individual level, then it means that the tax relief will reward young workers who achieve an individual increase in salary or qualifications, a promotion or a change of job. The bulk of the tax relief would therefore be ‘deadweight’: in other words, it would end up funding pay rises which, in almost all cases, would have happened anyway. If, on the other hand, as Minister Giorgetti describes it – exactly as with the tax relief on contract renewals – the relief is intended to incentivise an ‘agreement’ to increase the salaries of all young people, then a sort of generational collective agreement would be required, which does not currently exist, and it is unclear which party would be expected to sign it.

The other problem, which is inherent in all versions of the ‘incremental flat tax’ – from the self-employed to contract renewals – is that the benefit is temporary: from subsequent years onwards, the pay rise is subject to standard personal income tax rates. In other words, taxes would rise. But if the bonus is merely a temporary tax rebate, no structural issues are addressed and, in all likelihood, it would have no impact whatsoever on a young person’s decision (or lack thereof) to go and work abroad.

There are other tax proposals aimed at young people. Italia Viva, with a proposal that was subsequently adopted by the entire broad coalition, proposed the so-called ‘Start Tax’ during the last parliamentary term, which provides for three reduced tax rates of 10 per cent, 20 per cent and 30 per cent (instead of the standard rates of 23 per cent, 35 per cent and 43 per cent) for those under 35. Unlike the measure outlined by Giorgetti, this is a structural and universal measure, but it has the minor drawback of being very costly: 10 billion euros.

It would be interesting to have a debate on what the most appropriate fiscal measures might be to boost youth employment, increase wages for young people and give a boost to the birth rate. Yet the sense is that, as happens every year, once September is over—when, after the summer, attention turns to the younger generations—by October, as we get closer to facing up to the reality of the resources available for the budget and the votes to be won ahead of the elections, interest will shift towards the elderly and pensions.

Claudio Durigon, the Lega’s undersecretary, has already put forward a number of proposals costing several billion. The broad coalition and the CGIL have already protested that these measures are insufficient. In the end, the three-month adjustment of the retirement age to life expectancy will be postponed yet again, as requested by the centre-right and centre-left parties. Another two billion. It will be the young people, of course, who foot the bill. The very same young people who, every September, are promised a tax cut.