The statistics on the earnings of Italians during a particular historical time, such as the pandemic, may provide us with a great deal of information.
There are significant inequities and discrepancies between the North and the South. The figures released by the Ministry of Economy and Finance provide a picture of the economic situation of the Italian people in the current year. This study uses the year 2020 as a reference point, which is considered the most difficult year for the economy because of the prolonged lockdowns that have halted the majority of activities throughout the world, including Italy: the Italian GDP decreased by 9 percent in 2020, a figure that is reflected in the incomes of Italians who are poorer and unemployed. Wealth remains concentrated in the hands of a small number of people.
Approximately 27 percent of taxpayers, who declare approximately 4 percent of the total income tax, say up to 15 thousand euros; approximately 70 percent of taxpayers, who declare 67 percent of the total income tax, say between 15 thousand and 70 thousand euros; and approximately 27 percent of taxpayers, who declare approximately 4 percent of the total income tax, say up to 15 thousand euros. Only 4% of taxpayers disclose income in excess of 70 thousand euros, resulting in them paying only 29% of the total income tax.
Fewer Italians pay taxes
In 2020, around 41.2 million Italians will have disclosed their income, either directly (via the 730, for example) or indirectly (through the disclosure of withholding agents). However, the number of people who disclosed their salaries has decreased: there were 345 thousand fewer Italians who did so this year. Although the number of Italians who paid their taxes decreased, the overall amount of income reported was 865.1 billion euros, which was about 20 billion euros less than the previous year. Each Italian earned an average of 21,570 euros, which was a 1.1 percent decrease from the previous year's figure.
The income differences between North and South
The disparity in income between the North and the South continues to be apparent. The region with the highest overall average income is Lombardy (25,330 euros), followed by the Autonomous Province of Bolzano (24,770 euros), and the region with the lowest overall average income is Calabria (15,630 euros). Even in 2020, the disparity between the average income of the central-northern regions and the average income of the southern regions continues to be noticeable.
Self-employed better than employees
Employer and retirement income make for around 84 percent of total reported income, with retirement income accounting for 31% of total declared income.
It is the self-employed who earn the greatest average income, which is 52,980 euros per year, while entrepreneurs (owners of sole proprietorships) earn the lowest average income, which is just 19,900 euros per year. The average income reported by workers is 20,720 euros, whereas the average income reported by retirees is 18,650 euros. After everything is said and done, the average revenue from partnership and similar ventures is € 16,450 per year. However, it should be kept in mind that practically all capital income is subject to substitution taxes and, as a result, does not qualify for inclusion in the IRPEF.
The definition of "entrepreneur" in the personal income tax returns should be clarified to include only the owners of sole proprietorships, as opposed to those who carry on economic activities through corporations. Furthermore, the definition of "entrepreneur" should not be construed as a synonym for "employer," as the vast majority of sole proprietorships do not have employees. As a result, it would be inappropriate to use the statistics shown above to compare the income of "entrepreneurs" with the income of "their workers."
There have been more or less significant decreases in all of the major average incomes, ranging from -11 percent in business income to -10 percent in participation income to -8.6 percent in self-employment, while the decline in income from employment is more contained (-1.6 percent); the average retirement income is an exception, increasing by 2 percent. There was an increase in the number of retirees (almost 58,000 more persons, or 0.4 percent rise in the number of taxpayers) as a consequence of the "quota 100" mechanism, which allowed people to meet their retirement criteria earlier for a period of time. The number of employees, on the other hand, has declined (by about 287,000); more precisely, the reduction in permanent employees is 0.4 percent, while the decrease in those with fixed-term contracts is 3.8 percent.
A number of economic sectors have been damaged by the crisis produced by the epidemic, some more severely than others, as was to be expected. Businesses involved in the organization and management of tourist trips, tour operators, and tour guide activities have experienced a reduction in turnover of more than 73 percent; businesses involved in the transportation of passengers or goods by air or space have experienced a contraction of 61 percent; and businesses involved in the provision of short-term accommodation to visitors and travelers have experienced a reduction of more than 50 percent.
Although many industries have seen growth, postal services and courier operations such as collection, transport and package delivery have seen a 40% boost in business as a result of the unexpected surge in orders placed from home as a result of the lockdowns. The increase of more than 45 percent in the division that includes the activities of architecture and engineering firms appears to be linked to the introduction of new tax incentives such as the "facade bonus" and the first applications of the 110 percent Superbonus, which were announced in December. For the distribution of wealth across Italian regions, it is also true that money is concentrated in the hands of a few: the wealthiest two areas in terms of number of registrants (Lombardy and Lazio) account for around 46 percent of total national turnover. Sardinia, on the other hand, has reported the most significant decrease in the amount of business (-33.6 percent), owing to the lack of a successful tourist season there.