Spouse splitting

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The income splitting (from English to split , divide ') is in Germany since 1958 for the calculation of income tax of jointly assessed spouses and life partners applied splitting process .

history

The splitting of spouses was introduced with the "Law to change tax regulations in the field of taxes on income and earnings and procedural law" of July 18, 1958. It was the preliminary end point of a decade-long discussion about the tax assessment of spouses.

Development of German tax law for spouses until 1958

With the Prussian Income Tax Act of June 24, 1891, the previously existing household taxation was de facto replaced in favor of joint taxation for spouses, without this being clearly expressed in the wording of the law. The Income Tax Act, as published on June 19, 1906, stipulated that the income of the wife should be added to the husband's income. Due to the uniform tax rate, the joint assessment hardly resulted in any additional financial burden for the spouses at that time.

This changed with the introduction of a progressive income tax in 1920 as part of the Erzberger reform . A joint assessment now led to financial disadvantages for married couples in which both spouses were employed. The progressive income tax meant that their joint taxable income was subject to a higher tax rate than would be the case with individual taxation. In order to prevent married couples from getting worse off, the income from gainful employment that the wife earned in a business that was not owned by the husband was taxed separately. With the Income Tax Act of 1925, the wife's income from self-employment was also removed from the joint assessment.

The National Socialists reintroduced the joint assessment in 1934. The aim of this measure was to force women out of the labor market. On the one hand, it was hoped that in times of high unemployment there would be a shortage of labor. On the other hand, the role of women as mother and housewife corresponded to the National Socialist image of society.

During the Second World War , however, women were increasingly needed to work in the armaments industry . Therefore, an exception was created in 1941. The income of women in dependent employment, which they earned in a company not belonging to the husband, was no longer subject to joint assessment, but was taxed individually. This exemption did not apply to income from self-employment.

These regulations continued to exist at the beginning of the Federal Republic of Germany . Women who were employed in a foreign company were taxed individually. Wives who worked in the same company as their husbands or who were self-employed or freelance were subject to joint tax assessment. The higher tax burden on the joint income was referred to in public as the "marriage penalty tax".

Introduction of splitting in the Federal Republic of Germany

The different tax treatment of wives was perceived by the political public as a problem from the beginning of the 1950s. In a joint resolution by all parliamentary groups in 1955 , the Bundestag called on the federal government to “submit proposals for measures for the equal and fair taxation of spouses.” However, the federal government was unable to agree on a uniform position. While the Federal Ministry of Finance was in favor of a consistent joint assessment of all income, the Federal Ministry of Labor spoke out against abolishing separate taxation.

The pressure to act was increased by a ruling by the Federal Constitutional Court . Upon presentation by the Munich Finance Court , the First Senate of the Federal Constitutional Court declared the additional tax burden on spouses in its decision of January 17, 1957, to be incompatible with the Basic Law . Article 6, Paragraph 1 of the Basic Law prohibits impairment of marriage and family through disruptive interference by the state. Such is the worse position of the spouses through the joint assessment for income tax.

As a result, the federal government saw three constitutionally compliant regulatory alternatives for the reorganization of tax law: consistent separate taxation, joint assessment if progression was abolished ( flat tax ) and the application of the American splitting tariff.

They opted for joint assessment with the splitting tariff. On the one hand, the sole breadwinner marriage could be supported. The federal government saw in this regulation "a special recognition of the function of the wife as housewife and mother." On the other hand, the tax shortfalls associated with the necessary change could be limited by a simultaneous change in tax rates, in particular by a faster increase in progression. Therefore, a comprehensive reorganization of the tax rates took place in the course of the introduction of the spouse splitting. In this way, criticism of the “anti-social effects” of splitting, from which married couples with high incomes in particular benefit, should be countered.

Reform efforts

Spouse splitting has remained unchanged since its introduction in 1958, despite multiple criticism. A bill of the social-liberal coalition from September 1982 envisaged a limitation of the splitting advantage to a maximum of 10,000 DM. However, with the resignation of the FDP ministers from the government and the end of the governing coalition , the project was no longer pursued. In 1998, the SPD and Bündnis 90 / Die Grünen also agreed on a cap in their coalition agreement. The project was included in the draft law of the Tax Relief Act 1999/2000/2002, but was later deleted.

In its ruling of May 7, 2013, the Federal Constitutional Court ruled that the unequal treatment of married people and civil partners with regard to spouse splitting is not compatible with the general principle of equality in Article 3 (1) of the Basic Law. Thereupon the Bundestag extended the splitting of spouses to civil partnerships with the "Law amending the Income Tax Act in implementation of the decision of the Federal Constitutional Court of May 7, 2013" .

Procedure

Income tax rates for single and married couples in Germany in 2018

The term splitting tariff comes from German income tax law and describes the tax tariff applicable to married couples assessed together . The legal basis is Section 32a (5 ) EStG . The following procedure is used for this:

  1. The taxable income ( zvE ) of the spouses is determined and halved (split).
  2. For the halved ZvE, the income tax is calculated according to the applicable income tax rate (previously: read from the basic table).
  3. The income tax calculated in this way is doubled.

This splitting procedure means that the taxable income (zvE) is distributed equally between both spouses. As a result, the principle of taxation based on performance is not applied to the individual spouse, but to the couple as an economic community. Which of the spouses contributed how much to the total marital income is irrelevant. In this splitting procedure , the joint zvE of a jointly assessed couple is charged with the same tax rate as half the zvE of an individually assessed person. For example, in the 2018 income tax rate, the average tax rate for a couple with a joint zvE of € 48,000  is around 15%. The zvE of an individually assessed person in the amount of € 24,000 is charged with exactly the same tax rate.

The splitting effect only occurs if there is an income difference between the spouses or civil partners in the case of progressive tax rates and the income of both of them does not exceed a possibly existing upper progression limit. In such cases, the progression ensures that with individual taxation, the higher the income differential, the higher the tax. The splitting process compensates for this effect for jointly assessed couples, while it remains for individually assessed persons.

The splitting effect is dependent

  • on the distribution of the zvE between the spouses or partners,
  • on the total zvE as well as
  • from the tax rate (progression).

With a nominal uniform tax rate, a splitting effect can only arise if at least one progression level exists, for example via tax exemptions.

example

Spouses A and B together have a zvE of € 80,000 . The collectively agreed income tax with splitting procedure for the spouses is then 17,340 € (income tax rate 2018 without solidarity surcharge), regardless of how the income is distributed. The splitting process ensures that all married couples with a total income of € 80,000 pay the same income tax.

The same tax burden arises without the splitting procedure ("individual taxation") only if the income is distributed exactly evenly between both partners:

  • Reference distribution: each spouse contributed € 40,000 each.
    • zvE of A = € 40,000, income tax for individual taxation: € 8,670
    • zvE of B = € 40,000, income tax for individual taxation: € 8,670
    • Income tax (without splitting) in total: 17,340 € , i.e. identical to that for splitting.

Any other distribution of income would, however, lead to an additional tax burden in the case of individual taxation, which becomes greater the more unevenly the income is distributed:

  • Distribution variant A: Spouse A contributed € 60,000, Spouse B € 20,000.
    • zvE of A = € 60,000, income tax for individual taxation: € 16,578
    • zvE of B = € 20,000, income tax for individual taxation: € 2,467
    • Income tax (without splitting) of A and B together: € 19,045
    • Tax disadvantage compared to reference distribution € 1,705
  • Distribution variant B: Spouse A contributed € 80,000, Spouse B € 0.
    • zvE of A = € 80,000, income tax for individual taxation: € 24,978
    • zvE of B = € 0, income tax for individual taxation: € 0
    • Income tax (without splitting) of A and B together: € 24,978
    • Tax disadvantage compared to reference distribution € 7,638

Maximum impact of splitting

The difference between individual assessment and joint assessment with splitting depends on the one hand on the distribution of income between the two partners and on the other hand on the total income. Depending on the point of view, this difference is either referred to as a “splitting advantage” or as required for “equal treatment of married couples with different income distribution”. A distinction must be made between two approaches:

  • A single earner marries a partner with no income. One compares the situation before and after the marriage under the current legal situation.
  • One compares the situation with the abolition of the spouse splitting with the situation with its maintenance.

Comparison before and after marriage (current legal situation)

Dependence of the difference on the division between the spouses and the amount of total income (2018 tariff).

The purple curve in the picture on the right (comparison 1) shows the situation for single-income couples in 2018. If one considers other possible distributions such as 80% / 20%, 70% / 30% and so on, the difference becomes smaller and smaller. In the 50% / 50% division, the difference disappears completely. For couples in which both spouses earn the same amount, the splitting process always has no effect regardless of the income level.

From the figure, however, the relative effect of splitting (expressed as a percentage) is not clear. The following table shows the comparison of the absolute and relative tax savings of a single-earner couple caused by splitting for the year 2018.

zvE Basic
tax table		 Splitting table
tax		 absolute
savings (euros)		 relative
savings
€ 10,000 149 € 0 € 149 € 100%
€ 20,000 € 2,467 298 € € 2,169 87%
€ 30,000 € 5,348 € 2,382 € 2,966 55%
€ 40,000 € 8,670 € 4,934 € 3,736 43%
€ 50,000 € 12,432 € 7,704 € 4,728 38%
€ 60,000 € 16,578 € 10,696 € 5,882 35%
€ 70,000 € 20,778 € 13,908 € 6,870 33%
€ 80,000 € 24,978 € 17,340 € 7,638 30%
€ 90,000 € 29,178 € 20,992 € 8,186 28%
€ 100,000 € 33,378 € 24,864 € 8,514 25%
€ 120,000 € 41,778 € 33,156 € 8,622 20%
€ 140,000 € 50,178 € 41,556 € 8,622 17%
€ 160,000 € 58,578 € 49,956 € 8,622 14%
€ 180,000 € 66,978 € 58,356 € 8,622 12%
€ 200,000 € 75,378 € 66,756 € 8,622 11%
€ 400,000 € 163,562 € 150,756 € 12,806 7%
€ 600,000 € 253,562 € 237,124 € 16,438 6%

The table shows that with high zvE the absolute tax saving increases, but the benefit is relatively smaller.

Compared to abolishing or maintaining spouse splitting

The difference results from the comparison of the situation when the splitting procedure was abolished with the current situation of spouse splitting.

The table above does not correctly reflect the "splitting advantage". One cannot simply apply the basic table on the one hand and the splitting table on the other to the same income and show the difference as a splitting advantage. Because, of course, if the basic tariff is applied to the income of both partners (in the event that the splitting procedure is abolished), a second basic allowance would then also have to be applied for the other partner or deducted from the income. If the splitting procedure is abolished, a basic allowance for the partner is constitutionally mandatory. The "splitting advantage" is then considerably lower - see the following table.

zvE Basic table 2018
with additional
basic allowance		 Splitting table 2018 absolute
savings (euros)
€ 10,000 - € - € - €
€ 20,000 € 319 298 € € 21
€ 30,000 € 2,735 € 2,382 € 353
€ 40,000 € 5,660 € 4,934 726 €
€ 50,000 € 9,026 € 7,704 € 1,322
€ 60,000 € 12,832 € 10,696 € 2,136
€ 70,000 € 16,998 € 13,908 € 3,090
€ 80,000 € 21,198 € 17,340 € 3,858
€ 90,000 € 25,398 € 20,992 € 4,406
€ 100,000 € 29,598 € 24,864 € 4,734
€ 110,000 € 33,798 € 28,956 € 4,842
€ 120,000 € 37,998 € 33,156 € 4,842
€ 130,000 € 42,198 € 37,356 € 4,842
€ 140,000 € 46,398 € 41,556 € 4,842
€ 150,000 € 50,598 € 45,756 € 4,842
€ 160,000 € 54,798 € 49,956 € 4,842
€ 170,000 € 58,998 € 54,156 € 4,842
€ 180,000 € 63,198 € 58,356 € 4,842
€ 190,000 € 67,398 € 62,556 € 4,842
€ 200,000 € 71,598 € 66,756 € 4,842
€ 210,000 € 75,798 € 70,956 € 4,842
€ 220,000 € 79,998 € 75,156 € 4,842
€ 230,000 € 84,198 € 79,356 € 4,842
€ 240,000 € 88,398 € 83,556 € 4,842
€ 250,000 € 92,598 € 87,756 € 4,842
€ 300,000 € 114,512 € 108,756 € 5,756
€ 350,000 € 137,012 € 129,756 € 7,256
€ 400,000 € 159,512 € 150,756 € 8,756
€ 450,000 € 182,012 € 171,756 € 10,256
€ 500,000 € 204,512 € 192,756 € 11,756
€ 550,000 € 227,012 € 214,624 € 12,388
€ 600,000 € 249,512 € 237,124 € 12,388

statistics

The statistical distribution of the taxable income between the two spouses assumed above poses considerable difficulties in practice. In its annual income tax statistics, the Federal Statistical Office repeatedly points out that the joint assessment means that the taxable income or income tax cannot be divided between the individual spouses. The income stated separately for the spouse " only allows limited conclusions to be drawn about the actual individual income, since in practice - except for the income from non-self-employed work - mostly the entire income is stated for one of the spouses ". Evaluations by gender are therefore often of limited informative value.

Mathematical definition

The difference between individual assessment and joint assessment with splitting is calculated as follows:

It is

= Difference in tax amounts between the two assessment procedures
= Legally defined tax amount function with a basic allowance
= Annual taxable income of spouse A
= Annual taxable income of the spouse B

With this calculation method, both persons receive the same basic tax-free amount for individual assessments, provided that both ZvE are higher than this. With the option of transferring a full tax exemption, the formula changes as follows:

It is

= Basic allowance that was transferred to partner A.

In a single-earner marriage, it would be zero.

particularities

Death of a spouse

If a spouse dies, the splitting procedure in accordance with Section 32a, Paragraph 6, Clause 1, No. 1 EStG is still applied to the income of the surviving spouse in the calendar year following the year of death ( widow splitting ).

separation

From the year following the date of separation, separated spouses will be assessed individually, cf. Section 26 (1) sentence 1 EStG. According to the general opinion, however, a common disposition is permissible in the event of an attempt at reconciliation (i.e. in the case of a trial of cohabitation for a limited period of time).

Splitting and post-marital maintenance

If someone remarried after a divorce, the resulting splitting advantage is not taken into account when determining the income relevant for post-marital maintenance. The Federal Court of Justice (BGH) used to assume that the splitting advantage belongs to the income that shapes the marital living conditions. This practice was declared unconstitutional in 2003 by a decision of the Federal Constitutional Court (BVerfG).

Residence abroad

Spouses who on request are treated as subject to unlimited income tax in Germany or who are deemed to be subject to unlimited tax liability continue to receive the spouse splitting. This is possible, for example, if 90% of the income is drawn from Germany or if you live in another EU / EEA country ( § 1 EStG).

Splitting and child support

It is disputed whether the splitting advantage achieved by remarriage should be taken into account when determining the income relevant for child support. The Federal Court of Justice has so far assumed that the splitting advantage should be taken into account. A different view, however, was developed in 2006 by the OLG Oldenburg , which sees this practice of the BGH in contradiction to its other case law and also considers it to be unconstitutional, at least if the new spouse is subordinate to the children from a previous marriage. Because then the inclusion of the splitting advantage in the calculation of child maintenance would have the consequence that tax relief would flow into the maintenance calculation without taking into account the associated burden. The BGH, on the other hand, upheld its view. The BVerfG has not yet made a decision on this.

Expansion of the splitting system

In some countries, the splitting system is being extended to other dependent family members, e.g. in France to children ( family splitting ). The reason here is the equalization of family burdens and the promotion of children.

Variants to restrict splitting

Possible restrictions on spousal splitting are discussed in politics, media and science. For constitutional reasons, a dismantling of the splitting system is only permitted if it is ensured that married people are in at least as good a tax position as unmarried people (e.g. through real splitting ) and that the subsistence level remains tax-free (e.g. through a transferable basic allowance ).

The following variants are under discussion:

Source in the following: DIW Berlin, publications from 2003 and 2011

Option 1: Complete elimination of splitting and separate assessment (thereby abolishing the basic tax allowance for spouses without income)

  • Additional tax revenue: € 22.1 billion (2003 income, 2003 income tax rate)
  • Additional tax revenue: € 20.7 billion (2003 income, 2005 income tax rate)
  • Problems: The abolition of the basic tax allowance meets constitutional concerns, since the subsistence level should not be taxed . Therefore, this variant is not permitted in Germany. And taking into account a basic tax allowance for each spouse, only a fraction of the aforementioned additional tax revenue can be achieved. In addition, all problems of the following variants.

Variant 2: real splitting procedure . The assessment base for taxation is reduced for one partner and increased accordingly for the other. As a result, up to a certain maximum limit, part of the taxable income can be transferred from one partner to the other and thus its lower marginal tax rate can be used. This procedure is already used today with divorced spouses: The maximum limit for them (designed as a special expense deduction) is € 13,086, but a maximum of the post-marital or separation maintenance actually paid .

Depending on where the maximum limits for the transfer of taxable income to the partner are, there are different sub-variants of real splitting:

  • Variant 2a : maximum amount for married couples is lower than the basic allowance not used by the partner (= subsistence level)
  • Variant 2b : The maximum amount for married couples is at least the subsistence level (see 2a), but lower than the maximum amount for divorced people
  • Option 2c : The maximum amount is at least as high as for divorced people (and like the subsistence level, see 2a). In the case of exact equality with divorced people under current conditions (i.e. maximum contribution € 13,086), this limits the splitting advantage according to DIW to a maximum of € 5,100 per year

The DIW examined in more detail examples of variant 2b (with a maximum amount equal to the basic tax allowance of 2003, that was € 7,325) and variant 2c (with a maximum amount of € 20,000). For variant 2b, based on these premises, annual additional tax income of max. 9.1 billion euros calculated, for variant 2c (maximum amount 20,000 €) of max. 1.5 billion euros.

  • Problems:
    • In sub-variant 2a the same as in variant 1 (probably unconstitutional, as subsistence level is taxed).
    • In sub-variant 2b, married couples would have to pay more taxes than divorced couples. As a result, divorce would be fiscally attractive. In the opinion of the DIW, this variant is therefore probably also unconstitutional.
    • In all variants: As a result, the state would use the transferable amount to determine the maximum amount of the family income that the lower-earning spouse is entitled to as maintenance. As long as this share is below 50% (as with the previous splitting), there are contradictions in valuation, in particular with regard to family law (e.g. valuation in the profit equalization procedure): The full participation of both spouses in the total income within the profit community would no longer be recognized. In this way, the state would effectively intervene in the spouses' freedom of design, i.e. an area that is directly protected by Art. 6 GG (unlike real splitting for divorced persons).
    • In all variants: The expected additional tax income will be reduced by the fact that the affected couples will exhaust opportunities to distribute their total income more evenly. According to an estimate by DIW Berlin, this effect amounts to at least a third in the examined variant 2b (additional tax income falls to € 1 billion / year). In addition, not all married couples have these options to the same extent (especially traders would have an advantage over employees), which in turn could be unconstitutional.
    • In all variants: 90% of married couples who are raising children or whose children have already left the home are affected. If, as is often the case in politics, one wishes to exclude such married couples from the tax increase by eliminating splitting, according to DIW, for example, variant 2c would result in an additional tax income of only € 0.1 billion. This would probably be less than the additional administrative effort.

Variant 3 (note: not examined by DIW) : Splitting as before, but capping the maximum splitting advantage to an amount below the maximum splitting advantage resulting from the income tax rate.

  • Problems: depending on the design, the same as in the previous versions, only limited to a smaller group of people, namely those for whom the cap is effective. First of all, the cap would have to be big enough to ensure that the subsistence level is not taxed, otherwise the problems of variant 1. For those couples who would be affected by the cap, the problems of variant 2 in their sub-variants ( depending on the design of the cap and its accompanying rules). The remaining additional tax revenue is again significantly lower compared to the calculations for variant 2, precisely because of the smaller group of people affected.

Transition to individual taxation

A possible transition from spouse splitting to individual taxation leads to the question of retroactive effect : Existing marriages (“old marriages”) were concluded in the trust that the marriage would be subject to joint taxation. The division of labor within the family also took place in the trust that it had no influence on the taxation of income. With the abolition of spouse splitting, couples who (sometimes decades ago) based their life planning on existing tax law are now in a worse position.

Legally, it is a so-called spurious retroactive effect . This is legally permitted, but when weighing interests and goods, taking into account the protection of legitimate expectations, basic rights and the meaning and purpose of the law, e.g. B. transitional arrangements to the person concerned Legitimate then grant if his legitimate expectation on the previous state of the law prevails.

This is partly supported by the parties who are in favor of abolishing the spouse splitting. The SPD wants to cancel splitting only for the “new marriages”, the Greens are calling for a ten-year transition process of melting away.

Every transitional regulation reduces the fiscal effect of an abolition and inevitably creates new delimitation problems and injustices.

Positions of parties

The CSU wants to stick to the spouse splitting. She believes that the constitution requires spouses to be split because of the special protection of marriage and the family .

The FDP also wants to stick to the splitting process. The FDP advocates  abolishing income tax class V.

The CDU is also in favor of maintaining the splitting of spouses; Since 2006, however, the party has been considering introducing more extensive family splitting, which should also apply to unmarried partnerships with children. This new structure is largely rejected by the CSU and FDP, because they see the splitting for spouses damaged in its effectiveness.

The SPD states in its "Progress Program", which was announced in January 2011 the will to abolish the spouse splitting. At the beginning of January 2012, party chairman Sigmar Gabriel declared that he wanted to quickly implement this abolition in the federal government after a victory in the 2013 general election. So far, no final position of the party has been known about how exactly the abolition should look. Inside the party is discussed z. B. a cap in the higher income groups (correspond to variant 3 above) or individual taxation with a transferable basic allowance (corresponding to sub-variant 2b above). For example, individual taxation with alimony deduction was proposed, in which alimony payments are offset. However, the SPD's candidate for chancellor, Peer Steinbrück, still defended spouse splitting as federal finance minister because the abolition of spouse splitting would mainly affect married couples with one earner and one or two children. But this is actually the part of society for which something should be done.

Bündnis 90 / Die Grünen want to use a model to implement the abolition of spouse splitting and individual taxation with a maximum transferable amount of € 10,000 (corresponding to sub-variant 2b above). According to another more recent model, Bündnis 90 / Die Grünen are planning to melt down the splitting of spouses and the splitting advantage is to be capped at 1500 euros.

The left is also in favor of abolishing the splitting of spouses, whereby the transferability of the basic allowances is to be maintained (corresponding to sub-variant 2b above).

The AfD would like to replace spouse splitting with family splitting, which takes the number of children into greater account in taxation.

Constitutional evaluation

Whether and to what extent it would be constitutionally permissible to restrict spouse splitting is controversial. This applies in particular to regulations which mean that the total tax burden in individual cases depends on the distribution of income in the marriage.

The Federal Constitutional Court has consistently ruled that taxation based on performance is a constitutional necessity and has decided several times that the splitting of spouses achieves this goal because it treats marriage as a tax unit regardless of the matrimonial division of responsibilities. The last decision on this so far was made in 1982 (BVerfGE 61, 319 CI4.a → Tax Splitting  III ). The court assumes that spouses living together form a community of acquisition and consumption in which one spouse shares half of the income and burdens of the other. The splitting thus ties in with the economic reality of the intact average marriage, in which a transfer of tax efficiency takes place between the partners.

According to the judgment, splitting the spouses “avoids the unconstitutional disadvantage of the marriage in which both partners are employed in the case of joint assessment without splitting [...], and also excludes the risk of disadvantage for housewife or housewife marriage in the case of a separate assessment . The court sees a further reason for the constitutionality of the splitting of the spouses in the fact that "a special recognition of the wife's task as housewife and mother is connected with it". Overall, "the splitting of the spouses is not an arbitrarily changeable tax 'concession', but - without prejudice to the legislature's more detailed structuring power - one of the protection requirement of Article 6, Paragraph 1 of the Basic Law and the economic efficiency of the married couple ( Article 3, Paragraph 1 of the Basic Law) oriented, appropriate taxation. ”This procedure“ also avoids that married couples with middle and lower incomes in the progression zone, especially employees, are disadvantaged compared to married couples with high incomes, especially traders and freelancers. ”The latter could“ - whereupon as early as 1958 and 1974 in the legislative process and recently again by the federal government, it was rightly pointed out [...] - by contractually dividing their total income, reducing the tax progression with the same effect as with the splitting of spouses, which is not possible for the majority of employees. "

The court has not ruled out that other tax structures could also meet the constitutional requirements, such as family splitting . Against this background, proponents of a restriction speak of the legislature having a wide scope for design (→  Status Positivus ). Opponents consider any tax preferential treatment or disadvantage of a certain internal distribution of income to be unconstitutional.

According to the DIW, a restriction of the considerable splitting advantage for married couples with high income differences can be justified if the political model focuses on the economic independence and autonomy of the spouses.

Justifications and criticism

Arguments for spouse splitting

The following main arguments are given for spousal splitting:

  1. First of all, the general principle of all splitting procedures , taxation based on performance, speaks in favor of splitting . This becomes relevant as soon as one regards marriage as a community whose efficiency can or should only be assessed as a unit. Since it is precisely this view (marriage as a taxable benefit community) that is prescribed by the Basic Law according to the judgment of the Federal Constitutional Court , every constitutional tax system must ensure that all married couples with the same total income are subject to the same taxation, regardless of the internal income distribution. Without splitting, this goal would be missed because of the tax progression, so some married couples would be taxed too high. The splitting therefore does not represent a tax advantage, but the compensation of a disadvantage that is unconstitutional per se: in fact a massive tax punishment for income differences in the marriage, which would have an impact without splitting. This is all the less tolerable since - beyond all political equality efforts - only a few spouses can achieve complete equality of income. This is often an illusion, for example if a partner has a lower level of education or health restrictions, or if he spends time caring for third parties (e.g. small or disabled children, frail parents). The core goals of marriage would also often conflict with the goal of such equality, especially the goal of a common household if the professional careers of both partners cannot be optimally realized in the same place.
  2. The spouse splitting also takes into account the legal obligation of the spouses to pay for each other financially and, if necessary, to provide each other with maintenance . For example, people do not receive any basic security benefits such as unemployment benefit II or social benefit according to SGB II or social assistance according to SGB XII if the spouse can pay for their provision. An abolition of the splitting of spouses and a complete transition to the individual principle would consequently also have to eliminate these consequences of the marital solidarity obligation, whereby spouses of high earners could still receive social benefits.
  3. Capping the splitting of spouses without an accompanying increase in child-related transfer payments would primarily burden married couples with children, while in married couples without children, both partners are usually employed and therefore have roughly the same income. Indirectly, spouse splitting also serves the constitutionally prescribed protection of the family (not just marriage).

Criticism of the pro arguments

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Critics object that a legal political or constitutional assessment of the splitting of spouses in isolated form is imperfect. The legislative reflex to unequal treatment through joint assessment of spouses had led to a tax tradition since the 1950s. Conversely, it cannot be concluded from the constitutionality of splitting that there are no other constitutional possible solutions. This applies above all if the tax and duty system is changed in other ways at the same time. The splitting of spouses is also independent of the number of children and no longer does justice to the realities of life in many families today. Therefore, many couples - especially with children - would look for the financially most favorable arrangement, whereby the splitting of the spouses is not always in the foreground and does not offer the only advantage. On the other hand, socially weak families would be disadvantaged.

Arguments for the expansion of splitting

Childless marriages benefit from spouse splitting just as much as marriages with children. However, the “single-earning marriage” model (with maximum splitting advantage) occurs more often the more children have to be cared for in a family. Conversely, in addition to the traditional family of married parents with children, there are other forms of coexistence between adults with children, such as single parents.

In particular, the possibility of family splitting, such as is used in France, is discussed. Article 6, Paragraph 1 of the Basic Law places not only marriage but also the family under the special protection of the state; therefore dependent children would have to be included in the benefit community, regardless of the existence of a marriage.

Representatives of the life style policy also demand comprehensive equality, even for marriage-like communities, regardless of whether there are children.

Arguments for reducing or abolishing the splitting of spouses

In 2014, the results of the Prognos study commissioned by the Federal Ministry of Economics and the Ministry of Family Affairs in 2009 became known, according to which spouse splitting and non-contributory co-insurance in health insurance alleviate the burden on families in the short term, but do not strengthen the economic situation of families in the long term because they have a negative effect on working life affect the mothers.

Other objections from opponents of spouse splitting are:

  1. Childless married couples also benefited from splitting; the splitting advantage should actually only benefit children.
  2. The effect of splitting in comparison with an unmarried couple is greater the further the income of the two spouses is apart, due to the tax progression. It is greatest when one of the spouses has no income at all. According to the criticism, this has the effect that taking up work beyond marginal employment is hardly worthwhile for one spouse if the other spouse earns well. In reality, this leads to non-participation in the labor market and to an ever greater loss of qualifications for the (income) weaker partner, thus, with increasing time, to his permanent exclusion from work, ultimately to dependence on the better-earning partner. Stefan Bach ( DIW ): The state is thus promoting a housewife marriage that no longer conforms to the social norm , which represents a considerable personal risk for women because, in the event of a divorce, they are often left without gainful employment and pensions.
  3. Incidentally, any effect of tax law that favors or stabilizes unequal role models is an obstacle to equality. From the perspective of gender mainstreaming , the splitting of spouses should therefore be reassessed.
  4. The splitting, in combination with certain social security regulations (with the partner's non-contributory family co- insurance , with the individual and non-family-related contribution assessment limit in health, long-term care, pension and unemployment insurance, as well as the preferential treatment of mini-jobs ) results in on the same gross family income, those married couples who share work and family responsibilities more or less equally would be more heavily burdened by the sum of taxes and duties than single-earner or additional-earner couples. In this way, egalitarian-oriented couples would be financially worse off because of the way they work.
  5. The assumption that in practice half the transfer of tax capacity between the partners takes place in marriage has not been proven, since processes of negotiating the division of labor and money between partners have only been scientifically investigated to a limited extent; In particular, there is a legal right to pocket money during the marriage . The splitting also is true of marriages that separate property have agreed. However, the principles of the Constitutional Court did not apply to these marriages.

Criticism of the contra arguments

  • To 1: The splitting of spouses has nothing to do with children. It is an effect of the constitutional protection of marriage, which, regardless of children, also includes the right to determine the distribution of income between the partners without state control and to make appropriate decisions (e.g. to take part in a job-related change of residence of the main earner, too with professional disadvantages for the partner). In addition, the child benefit serves as financial support for each individual child. Since splitting is actually only a compensation for disadvantages, it cannot be qualified and used as a means of promoting families or children. In truth, it is precisely the disadvantage of one-earning marriage, which begins without splitting, the actual goal of the opponents, in order to favor the politically desired higher-earning marriage and to pursue “gender mainstreaming”.
  • Regarding 2: Every increase in income of the non-employed spouse is worthwhile (in the case of splitting) just like a corresponding increase in income for the main earner. The lower-earning spouse is no more hindered from increasing their income than the higher-earning spouse. Without splitting, on the other hand, an increase in income would be subsidized for the spouse with less income, but punished for the spouse with higher income. In addition, the negative labor market effects of a constitutional reform of the splitting of spouses, estimated in the current empirical studies, are low or even questioned.
  • Re 3: “Gender mainstreaming” should not lead to unconstitutional interference by the state in shaping the marital partnership. The state should advocate equality in the public sector, but never impose this political goal on private life and override individual freedom of choice.
  • To 4: The allegedly higher total burden from taxes and social contributions does not exist, or only in the form of the advantages of mini-jobs. In particular, the social security contributions are completely independent of whether they are deducted half of the total income for both partners or fully deducted from one. There is also an advantage if the income of a spouse exceeds the contribution assessment limits and thus an increase in income for the partner with a poorer income means an increase e.g. B. the health insurance contributions and not with high earners, but this is a social law problem, which is also superimposed by generally different rules for compulsory health or pension insurance.
  • To 5: Half of the transfer between the spouses is made a norm and even an obligation elsewhere by the legislature. According to this argument, the obligation of the spouses to “adequately support the family”, as laid down in Section 1360, amounts to half the transfer, which is particularly evident in the provisions on family law gains compensation and inheritance law for spouses. All of this also applies to a large extent to the separation of property . Any injustices that arise are taken into account accordingly. In the case of a divorce , the pension entitlements acquired during the marriage are in principle divided equally.
  • General: Practically all counter-arguments would also apply if splitting was converted to individual taxation with a transferable basic allowance or real splitting (see above, variants 2 and 3 for restricting splitting). According to these models, the tax deductions for the partner taking up work are also subject to an increased tax rate for their additional earnings, as the amount transferred leads to a tax progression for the partner who accepts the tax exemption. This reduces the tax incentive for the partner to take up work, similar to a splitting system. Only the size of the effect is lower, and even that only with higher incomes.

Other countries

In addition to Germany, only Luxembourg and Poland have spouse splitting for income tax. France and Portugal go beyond that with family splitting.

There is no spouse splitting in any other EU country. In these countries, spouses are taxed individually or receive limited tax breaks. However, there are a number of EU countries where a proportional tax rate applies. In the case of a proportional tariff, a splitting procedure would not lead to a change in tax liability given the income level and distribution in the marriage. Austria , the United Kingdom , Sweden , the Netherlands and Spain have abolished spouse splitting in favor of individual taxation. In Austria, the (spouse) partner maintenance is taken into account for tax purposes within the framework of individual taxation, in that family-related deductions (single-earner tax credit, single parent tax credit, child tax credit) apply.

In some cantons of Switzerland , in addition to full splitting , there is a partial splitting in which the total income is not divided by two as in the case of spouse splitting, but by a low splitting divisor, for example from 1.6 to 1.9 (Swiss Federal Tax Act). Married people may pay much higher taxes than two single people ( see: marriage penalty ).

In the United States jointly assessed married couples pay up to a taxable annual income of 142,700 dollars (tariff 2012), regardless of the distribution of the marital income on both partners in the federal income tax exactly the same amount of tax as two singles with each hälftigen taxable income. In other words, the average tax rate up to this limit is always just as high as the average tax rate for half of the single income. In this respect, federal income tax is equivalent to spouse splitting up to a marriage income of $ 142,700. Beyond this limit, the average tax rate for married couples assessed together is slightly higher (e.g. 21.89% for married incomes of $ 200,000) than the average tax rate for half single income (21.46% for single income of $ 100,000).

literature

  • Ralf Maiterth and Malte Chirvi: Spouse splitting from the perspective of tax science. Tax and Economy 1/2015, pp. 19–32.
  • Maria Wersig : The long shadow of housewife marriage. On the resistance to reform of the spouse splitting. Opladen, Berlin, Toronto, 2013, ISBN 978-3847400851 .
  • Franziska Vollmer: The splitting of spouses: A constitutional study of the income taxation of married couples. Nomos Verlagsgesellschaft, Baden-Baden 1998, ISBN 3-7890-5682-0 .

Web links

Wiktionary: spouse splitting  - explanations of meanings, word origins, synonyms, translations

Legal Internet publications by the Humboldt University in Berlin on the subject of marriage splitting:

On the requirement of gender mainstreaming, cf. also:

Individual evidence

  1. ↑ BVerfG judgment of January 17, 1957 - 1 BvL 4/54
  2. ↑ a b c d Maria Wersig 2013: The long shadow of housewife marriage. On the resistance to reform of the spouse splitting. Opladen, Berlin, Toronto, pp. 106ff
  3. ^ A b Maria Wersig 2013: The long shadow of housewife marriage. On the resistance to reform of the spouse splitting. Opladen, Berlin, Toronto, p. 113
  4. ↑ BVerfG judgment of January 17, 1957 - 1 BvL 4/54
  5. ↑ Maria Wersig 2013: The long shadow of housewife marriage. On the resistance to reform of the spouse splitting. Opladen, Berlin, Toronto, p. 138
  6. ↑ Maria Wersig 2013: The long shadow of housewife marriage. On the resistance to reform of the spouse splitting. Opladen, Berlin, Toronto, pp. 133f
  7. ^ A b Maria Wersig 2013: The long shadow of housewife marriage. On the resistance to reform of the spouse splitting. Opladen, Berlin, Toronto, p. 155
  8. ↑ BVerfG judgment of May 7, 2013 - 2 BvR 909/06
  9. ↑ Annual income tax statistics - Fachserie 14 series 7.1.1 - 2008, page 10, "Excursion" (PDF)
  10. ↑ BVerfG, judgment of October 7, 2003 - 1 BvR 246/93 - , on the consideration of tax advantages from the spouse splitting when assessing the maintenance to be paid to the former spouse .
  11. ↑ OLG Oldenburg, judgment of March 7, 2006 - 12 UF 154/05 - ( Memento of January 5, 2016 in the Internet Archive )
  12. ↑ BGH, press release of September 17, 2008
  13. ↑ a b c Stefan Bach, Hermann Buslei: Fiscal Effects of a Reform of Spouse Taxation (PDF file; 190 kB), weekly report of DIW Berlin 22/03.
  14. ↑ a b Stefan Bach, Johannes Geyer, Peter Haan, Katharina Wrohlich: Reform of the splitting of spouses: only pure individual taxation increases the incentives to buy significantly (PDF file; 624 kB), DIW weekly report 44/22.
  15. ↑ From spouse splitting to partnership tariff , FAZ of May 3, 2013, p. 13.
  16. ↑ Carl-Ludwig Thiele : FDP calls for family-friendly tax policy ( Memento of the original from October 7, 2005 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF), August 5, 2005  @1@ 2Template: Webachiv / IABot / www.liberale.de
  17. ↑ FDP: Application: Abolish tax class V - reorganize wage tax deduction / printed matter 16/3649 (PDF file; 50 kB), German Bundestag, November 29, 2006
  18. ↑ Johannes Singhammer : Spouse splitting is indispensable ( Memento of the original from September 27, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , June 14, 2006  @1@ 2Template: Webachiv / IABot / www.cdu.de
  19. ↑ WAZ: SPD wants to overturn spouse splitting
  20. ↑ Family politicians want to abolish spouse splitting , Spiegel Online
  21. ↑ Simone Schmollack: spouse splitting versus individual control: Ten percent more for the state. In: taz.de. 2012, accessed January 25, 2018 .
  22. ↑ Steinbrück defends spouse splitting , Handelsblatt dated June 17, 2006.
  23. ↑ Christine Scheel: Individual Taxation. June 1, 2006, accessed November 27, 2015 .
  24. ↑ Green cover for spouse splitting , Tagesspiegel Online
  25. ↑ Andreas Schuster: How should more money get into the coffers? - On dealing with the PDS tax concept ( Memento from December 8, 2015 in the Internet Archive ) , February 2005
  26. ↑ AfD relieves high earners and tears a hole in the budget , April 25, 2016
  27. ↑ Ralf Maiterth and Malte Chirvi: The splitting of spouses from the perspective of tax science. Tax and Economy 1/2015, pp. 21–25.
  28. ↑ a b BVerfGE 61, 319 CI4.a .
  29. ^ Background paper on the current discussion about reforming the taxation of marriage and family. (No longer available online.) In: www.djb.de. June 27, 2006, archived from the original on May 21, 2015 ; Retrieved September 6, 2009 (opinion of June 27, 2006).
  30. ↑ See, for example, Christine Hohmann-Dennhardt in an interview with
    Felix Berth: Interview - “The legislature has scope” , Süddeutsche Zeitung , June 20, 2006, p. 8.
  31. ↑ See for example Paul Kirchhof , former constitutional judge, on Deutschlandradio , broadcast on August 23, 2008.
  32. ↑ Landtag des Saarlandes, answer to the question by the MPs Cornelia Hoffmann-Bethscheider (SPD), Taxation of Family Households, printed matter 13/1916 of June 2, 2008
  33. ↑ Schulemann, Olaf, family taxation and splitting, proposed changes on the test stand, ed. from the Karl-Bräuer-Institute of the Federation of Taxpayers eV, November 2007, p. 16 ff.
  34. ↑ http://www.tagesspiegel.de/politik/reform-der-familienfoerderung-grundsicherung-fuer-kinder-statt-ehegattensplitting/14795700.html
  35. ↑ Dyrk Scherff: And that should be fair? In: FAZ.net . February 1, 2016, accessed October 13, 2018 .
  36. ↑ Dorothea Siems: Bad grades for spouse splitting. Die Welt, January 23, 2013, accessed January 24, 2014 .
  37. ↑ Debate: Spouse Splitting . bpb.de. September 20, 2017. Retrieved January 25, 2019.
  38. ↑ macro: marriage bonus before the end? In: macro . March 10, 2017, accessed December 26, 2018 .
  39. ↑ Marriage bonus before the end? Controversial spouse splitting. In: 3sat. Retrieved December 26, 2018 .
  40. ↑ BVerfGE 61, 319.
  41. ↑ Ralf Maiterth and Malte Chirvi: The splitting of spouses from the perspective of tax science. Tax and Economy 1/2015, pp. 21–25.
  42. ↑ Malte Chirvi: Do women work less because of the splitting of spouses? An empirical study for Germany , July 2019
  43. ↑ Welt N24, How does the divorce affect you financially? , May 25, 2010
  44. ^ Government of Poland: The European Job Network
  45. ↑ Autoridade Tributaria e Aduaneira Tax System in Portugal ( Memento of 12 May 2013, Internet Archive ) (PDF; 689 kB)
  46. ↑ Frankfurter Rundschau: We need a policy that promotes all children ( Memento from December 2, 2008 in the Internet Archive )
  47. ^ German Taxpayers Institute: Building blocks for a reform of the tax system
  48. ↑ Hans Böckler Foundation: Spouses splitting makes paid work unattractive for women
  49. ^ Federal Tax Brackets March 13, 2012