Starting from January 2007, the end-of-period capital accumulated over contributors’ working lives is subject to a proportional tax rate that is equal to 15 per cent but can go down to 9 per cent depending on the length of the investment period; 13 in comparison, the lowest personal income marginal tax rate is 23 per cent.
Our calculations show that the new Italian ETT system (Exempt, Taxed, Taxed) is considerably more favourable than the EET system prevailing abroad. 14 The tax benefits of the new system are particularly valuable for high-income workers – with high marginal personal income tax rates – and for young workers, who can benefit from the favourable tax regime for a longer accumulation period.