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Traffic light is planning a tax revolution: two tax classes are to be abolished

2024-02-23T17:13:19.087Z

Highlights: Traffic light is planning a tax revolution: two tax classes are to be abolished. This would mean that the two tax brackets for married couples would disappear. The aim is to prevent spouses from being worse off overall as a result of the reform. It is still unclear when exactly the law might be available. However, Finance Minister Christian Lindner (FDP) is reportedly working on presenting it soon. The problem of mothers in particular working less or not at all for financial reasons was highlighted as a central challenge in the 2024 economic report.



As of: February 23, 2024, 6:00 p.m

By: Amy Walker

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According to a media report, the Federal Minister of Finance is planning a new law that will abolish two tax brackets.

That would have far-reaching consequences.

Berlin – The federal government wants to shortly present a legislative package that provides for the abolition of the two tax classes 3 and 5.

The Bild

newspaper reported on this on Thursday (February 22nd)

.

This would mean that the two tax brackets for married couples would disappear.

A reform of the tax classes was also announced in the traffic light coalition agreement.

After presenting this year's annual economic report, Federal Family Minister Lisa Paus (Greens) also announced in an interview with the

AFP

news agency that a planned reform of tax brackets would make work more worthwhile for married second earners.

Women mostly benefited from this.

The abolition of tax classes should not disadvantage married couples

By merging the two tax classes, the higher earner would in future receive less net of the gross, while the partner with a lower salary would then receive more.

Spouses who both earn equally well and fall into tax class 4 are not affected by the change.

According to

Bild

, the aim is to prevent spouses from being worse off overall as a result of the reform.

FDP financial expert Max Mordhorst told the newspaper: It is a top priority “that the bottom line is that the change does not lead to any additional burdens on married couples.”

It is still unclear when exactly the law might be available.

However, Finance Minister Christian Lindner (FDP) is reportedly working on presenting it soon.

However, there were already reports last year that the reform was imminent.

Christian Lindner (FDP), Federal Minister of Finance, speaks in the plenary session in the German Bundestag.

© picture alliance/dpa |

Serhat Kocak

The shortage of skilled workers should be eliminated

The problem of mothers in particular working less or not at all for financial reasons was highlighted as a central challenge in the 2024 economic report.

According to Family Minister Paus, the report shows that “the employment rate of women with children is one of the highest in Europe,” but 47.2 percent of women with children work part-time.

“While there is hardly any difference in the labor force participation of childless women and men, the average weekly working hours of working mothers is almost 28 hours per week, whereas for fathers it is 40.4 hours per week.”

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But women often want to work more than they can, emphasized Paus.

“This also has consequences when it comes to making a living through your own income, not only currently, but also when life circumstances change such as separation or divorce,” said Paus.

In order to change that, well-developed child care is also crucial.

In this context, Paus also highlighted the family start time - a project of her ministry that is still in departmental coordination due to unclear financing and is therefore still on hold.

The introduction of up to two weeks of paid special leave for the second parent after the birth of the child, agreed in the 2021 coalition agreement, is also intended to support “the regeneration of mothers after the birth of their child,” said Paus.

“This means that parents can set the course for a shared division of tasks at an early stage.”

With material from AFP

Source: merkur

All news articles on 2024-02-23

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