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RWI Study: Abolishing Spouse Splitting Could Motivate Hundreds of Thousands to Get Jobs

2021-06-26T13:35:42.194Z


According to a study, the abolition of spouse splitting could boost economic growth in Germany. However, poorer couples who depend on it could suffer.


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Symbol picture family: The single-earner model has been subsidized for tax purposes since 1958

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Julian Stratenschulte / dpa

The abolition of spouse splitting and a change in taxation to an individual assessment of the spouses could lead to more than half a million additional full-time employees with the same tax revenue, according to a study by the Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI).

The supply of labor could increase and more people could become employed.

Such a reform of tax law, called for by the SPD, the Greens and the Left, with reference to equal opportunities for married couples, however, also leads to financial losses for many population groups.

In the event of the abolition of splitting, the disposable income for the majority of couples with unequal incomes will fall, especially for lower, "financially vulnerable groups," according to the study.

According to RWI, this should be taken into account in economic policy, for example by increasing child benefit and the child allowance.

"Spouse splitting is not negotiable for the Union"

"Our study shows that abolishing the splitting of spouses could have a very positive effect on employment and gender equality in Germany," said RWI financial scientist Robin Jessen of the "Handelsblatt", which first reported on the study.

Overall, the gross domestic product could rise by up to 1.5 percent on a one-off basis, which in turn would reduce national debt.

The spouse splitting introduced in 1958, in which large differences in salaries between the partners are taken into account for tax purposes, benefit families who live a traditional role distribution - with a main breadwinner.

For example, it can be financially worthwhile for a spouse to earn little or no money.

According to critics, this is a disincentive.

According to experts, women in particular, who often also take on childcare in relationships, often remain in a part-time job or in a mini-job - or do not work at all.

This in turn leads to lower pension entitlements in old age.

While left-wing parties want to abolish or at least reduce spouse splitting after the federal elections, the FDP and Union are sticking to the advantages for jointly assessed spouses according to previous plans.

The Union's financial policy spokeswoman, Antje Tillmann, told the Handelsblatt: “For the Union, spouse splitting is non-negotiable.”

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Source: spiegel

All business articles on 2021-06-26

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