Spouse splitting: Union rejects reform

The demand from a group of economists that the federal government should take advantage of the tax benefits from the Spousal splitting limit has little prospect of implementation. Because there is determined resistance from the Union.

“The Union parliamentary group has a clear stance on spousal splitting: We are sticking to it,” said financial policy spokesman Fritz Güntzler to the FAZ. Spousal splitting is “an expression of the constitutional protection of marriage and family”. Güntzler doubts that the goals stated by the economists – especially: less part-time work for women – would be achieved with a reform. “The hidden tax increase in this proposal will not create any incentives for second earners to work. The real problem is not with tax policy, but with the fact that many women are unable to extend their working hours due to a lack of childcare options or unreliable daycare times.”

On Tuesday, an alliance of 23 economists and former constitutional judges wrote a joint letter to Chancellor Friedrich Merz (CDU). According to their proposal, the income of both spouses would no longer be added together, divided by two and then taxed. Instead, the person with the higher income should only be allowed to mathematically transfer 13,805 euros of their own income to their partner.

Because income tax rates are progressive, i.e. higher incomes are taxed at higher rates, such a reform would make it less tax attractive than it is today for one spouse to earn a lot and the other to earn little.

The demand from economists is not new. The Council of Experts, which advises the federal government on economic policy, has been promoting so-called real splitting for a long time. What is special about the current proposal is the broad support. Some signatories tend to represent the positions of the SPDothers from the CDU. It is rare for DIW President Marcel Fratzscher and Ifo President Clemens Fuest to agree. In this case that is the case.

Economists have an open door in the SPD-led Ministry of Finance. Finance Minister Lars Klingbeil (SPD) had already criticized spousal splitting as a “tax system from the last century” in his speech to the Bertelsmann Foundation. It keeps women in the “part-time trap”. For new marriages, Klingbeil would like to replace it with a model like the real splitting proposed by the economists.

Klingbeil’s economic policy advisor, the Düsseldorf economist Jens Südekum, made a correspondingly open-minded statement to the FAZ on Wednesday: “I support the proposal from the group of economists to reform spouse splitting,” he said. “The concept that is now available could be a sensible way to implement it. This would specifically support families. In addition, a reform of the splitting of spouses can increase the employment of women, because the previous tax incentive structures often stand in the way here.”

According to the economists’ concept, the federal government’s additional revenue should be passed on to families by limiting the splitting advantage. According to the calculation, child benefit could be increased from 259 euros to 316 euros, and the child allowance could be increased from 9,756 euros to 11,902 euros.

Union finance politician Fritz Güntzler speaks of a “tax policy symbolic debate”. It is more important to ensure reliable childcare and to improve the transition from mini-jobs to employment subject to social security contributions.

Unlike his advisor Jens Südekum, Finance Minister Klingbeil refrained from publicly supporting the economists’ proposal. Even without this issue, there are plenty of lines of conflict in the black-red coalition, whether over income tax reform, pensions or the working hours law. The coalition wants to show agreement on at least some of the points by the start of the parliamentary summer break. The motto is not more, but less arguments.