Single earners with a spouse and two children are taxed less in Germany than widowed or unmarried single earners with two children. The reason is spouse splitting. The Saxon tax court confirmed this unequal treatment at the end of December 2020, but dismissed the lawsuit by Leipzig tax advisor Heiko Haupt due to the exclusion of beneficiaries. This is justified on the one hand by the fact that the splitting results in liability of one spouse for the taxes of the other. Secondly, with the fact that a marriage partnership is different from families, which consist of single parents and their children, and therefore does not have to be treated equally in legal terms. The Federal Constitutional Court argued similarly in 1982.
Haupt’s representative Reina Becker, who has been going to court repeatedly since 2008, saying that single parents can also benefit from the splitting advantage, tells »nd«: »As a victim, it’s a blow in the stomach. As a single parent, you are in a much worse situation anyway and, on top of that, you are treated worse for tax purposes. “
In the case of spouse splitting, the income is divided and pretended that both spouses * earn the same amount. The higher earning partner transfers income to the lower earning partner. This reduces the progression, the increase in tax revenue. The most relieved are marriages in which only one partner (mostly the man) earns top earnings. Becker therefore also calls it a “generous subsidy for high earners with a traditional understanding of roles”. The top tax rate limit will also be doubled for married couples. “For example, if one partner earns 110,000 euros and the other 480,000, the couple pays 6600 euros less in taxes,” explains Becker. “That is a gigantic additional splitting advantage that is never discussed,” said the tax advisor. If two spouses earn the same amount, there is no tax advantage.
Spouse splitting is a relic of the Federal Republic of the 1950s. There was no spouse splitting in the GDR; to date, only ten percent of the splitting volume flows to eastern Germany. Hardly surprising, because splitting promotes the West German housewife model, in which one person only “earns”. A study commissioned by the federal government summarized the negative effects on family support more than ten years ago. “Most countries abolished or reformed splitting in the 70s and 80s, and Germany missed the boat back then,” says Stefan Bach from the German Institute for Economic Research (DIW) in a video from the institute.
Why is nothing changed about the tax privilege of marriage despite better knowledge? The lawyer Maria Wersig, president of the German Association of Women Lawyers and author of the book “The Long Shadow of Housewife Marriage” sees this as justified ideologically and politically. “In Sweden, a social consensus on social equality for women was the prerequisite for reform,” Wersig told “nd”. In Germany they are not that far yet. Many conservatives like splitting.
In October 2020, Federal Family Minister Franziska Giffey (SPD) spoke out in a guest article in “Wirtschaftswoche” in favor of abolishing spouse splitting with grandfathering. The DIW recently compared several models and suggested replacing the spouse splitting with a real splitting with a transfer amount of a maximum of 9696 euros. This means that only income in the amount of the basic tax-free allowance is transferred from higher-income to lower-earning partners. The DIW also expects a higher number of women in the labor force.
Reina Becker would also welcome such a regulation. She hopes that the effects of the corona pandemic could shake the splitting. “If the spouse splitting were to be limited to half, the state could earn ten billion more annually – mostly from high-income earners,” the tax expert calculates.