It's an unintended consequence of the reduced (5-15% flat) taxes available via "regime forfettario"[1] which only applies to businesses with <65k income. Othe

It's an unintended consequence of the reduced (5-15% flat) taxes available via "regime forfettario"[1] which only applies to businesses with <65k income. Otherwise you have to pay much more (23%-43%) via the regular progressive tax brackets. Somewhat similarly, in the USA there is a "welfare trap"[2] where earning more income would reduce other benefits (eg housing, food) enough to result in an effective >100% tax on income. [1] https://publicnewstime.com/travel/explained-the-pros-and-cons-of-italys-five-percent-flat-tax-for-freelancers/ https://publicnewstime.com/travel/explained-the-pros-and-con... [2] https://en.m.wikipedia.org/wiki/Welfare_trap https://en.m.wikipedia.org/wiki/Welfare_trap