Spouse splitting slows professional activity - Foundation puts pressure on traffic light explorers

In terms of taxation, it is rewarded if one spouse earns significantly less than the other.

This creates false incentives for many.

Munich - Working is often not worth it enough for wives - given the shortage of skilled workers, it is urgently necessary to get them out of the "second earner trap", complain economic experts from the Ifo Institute and the Bertelsmann Foundation.

The foundation is therefore putting pressure on the traffic light coalition negotiations to reform the taxation of spouses and abolish tax-free mini-jobs - and is presenting specific sample calculations.

Following the suggestions, a full-time employee with an hourly wage of 20 euros would have 476 euros more in her pocket per year.

Income losers would be mini-jobbers who would have around 2000 euros less a year with an hourly wage of 20 euros.

But Bertelsmann expert Manuela Barisic said that the pandemic had clearly shown that mini-jobs in their current form were "the big losers" because they did not benefit from short-time working benefits and quickly lost their jobs.

In addition, in the current model, mini-jobbers in old age are often dependent on basic state security.

Barisic admitted to our newspaper that the abolition of mini-jobs would increase the risk of increased illegal work.

"To prevent this, the controls have to be expanded," said the expert.

Spouse splitting: Bertelsmann Foundation suggests “real splitting”

With the proposed reform, the contribution rate would initially be very low, would increase slowly - and full social insurance would not be reached until 1800 euros.

So far, second earners have had to pay income tax above the usual entry tax rate of 14 percent.

The reason is spouse splitting, in which a married couple is assessed together.

As a result, a second earner is usually subject to the same tax rate as the first earner.

In contrast, the foundation proposes a "real splitting" in which both spouses are assessed separately.

The husband, who often earns better, is likely to transfer an amount of EUR 13,805 - he is based on legal requirements such as maintenance obligations and divorce law - to the partner.

The Bertelsmann expert Barisic explained that the tax burden for the second earner could be reduced.

Explorations: Traffic light coalition would abolish spouse splitting

The previous spouse splitting pays off especially for couples where one earns a lot and the other significantly less.

But: “Work has to be worthwhile for everyone, especially for women and mothers,” according to the Bertelsmann experts.

The reform would be self-financing as more taxable jobs would be created, Barisic said.

According to the Bertelsmann Foundation, a combined reform of spouse splitting and mini-jobs could bring 124,000 people into "good" jobs.

Women in particular would benefit from this, as around 108,000 of these additional social security and taxable jobs could be found.

Three quarters of all employed wives currently have a lower income than their husbands.

At the traffic light coalition negotiations, the SPD, the Greens and the FDP largely agree that they want to abolish spouse splitting in its current form.