Senate rejects proposal to raise tax exemption levels

(ANSA) – Rome, November 13 – Budget proposals aimed at raising the amount of earnings eligible for income tax exemption, aimed at helping the poorest Italians, were rejected Wednesday by a Senate committee because such a move would be too expensive.

Proposed amendments to the government’s 2014 budget bill, which came from both the centre-left Democratic Party (PD) and the centre-right People of Freedom (PdL) party, would have raised the level for tax exemption to 12,000 euros in annual income from the present 8,000 euros.

Proponents said the measure would leave extra cash in the pockets of hard-pressed Italians. But it was expected to cost billions of dollars in lost income tax revenue for the government of Premier Enrico Letta, which argued the measure was not equitable because it would benefit the richest Italians as well low-income earners. PdL Senator Cinzia Bonfrisco said that ideas to “reformulate” the proposal were being researched and could be presented later in the day.

The Senate committee is now reviewing more than 3,000 proposed amendments to the budget bill that is focused on holding Italy’s deficit to gross domestic product (GDP) level at or below 3% as mandated by the European Union.