The "Invisible Tax": Fiscal Drag May Cost Italians €13 Billion
Listen to the story
There is a problem in Italy called fiscal drag.
People also call it the "invisible tax".
It is not a new tax. But it can take money from people's pay.
It can cost up to 13 billion euros.
This money comes from wages and pensions.
A wage is the money people get for their job.
A pension is money for old people who do not work anymore.
Fiscal drag happens when prices go up but tax rules stay the same.
This is called inflation.
When prices go up, people earn more money to pay for things.
But higher pay can put people in a higher tax bracket.
A tax bracket decides how much tax you pay.
So people pay more tax, even if they are not really richer.
This is why people call it an invisible tax.
You do not see a new law. But you still pay more.
Vocabulary7 words
- fiscal drag
- when tax takes more money because prices go up, not because a new tax law comes
- invisible tax
- an extra cost that is not a real new tax, but still takes your money
- billion
- the number 1,000,000,000
- wages
- money you get for doing a job
- pensions
- money older people get after they stop working
- inflation
- when prices for things go up over time
- tax bracket
- a group that decides how much tax you must pay
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Quiz
Answer key
1. The invisible tax 2. 13 billion euros 3. Prices going up (inflation)
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Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
There is a problem in Italy called _____.
People also call it the "_____ tax".
It can cost up to 13 _____ euros.
This money comes from _____ and _____.
A wage is the money people get for their _____.
Fiscal drag happens when prices go up but tax rules stay the _____.
This is called _____.
But higher pay can put people in a higher tax _____.
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