As of: February 26, 2024, 2:13 p.m
By: Amy Walker
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Press
Split
The traffic light government is planning a major reform of tax classes.
Women in particular should be better off in order to increase incentives to work.
Berlin – Finance Minister Christian Lindner (FDP) is reportedly planning a law that would provide for the abolition of two tax classes.
Specifically, it is about abolishing tax classes 3 and 5, which currently apply to married couples.
Instead, married couples should both be classified in tax class 4 in the future.
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.
Tax class 4 for all married couples: This is the traffic light plan
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.
The idea behind tax classes 3 and 5 was originally that the family would have more monthly income available overall, even if an additional payment was often due every year.
The higher earner is classified in tax class 3 and therefore pays very few taxes, while the lower earner (often a woman) pays very high taxes and thus takes on virtually the entire tax burden.
But even if the family has more money overall, it creates a power imbalance.
And it is more difficult for women to go back to work after the birth of a child, for example, because they contribute less to the family net.
Married couples receive better tax treatment - but this often has disadvantages for women.
The traffic lights now want to be improved.
© IMAGO/BEAUTIFUL SPORTS/Hahne
From an economic perspective, this makes little sense, especially in times of skilled labor shortages.
That's why the traffic light government wants to make adjustments here - and increase work incentives, especially for women.
How this can specifically affect families' wallets can be seen from this table:
Payroll tax calculation in the different tax classes
Gross salary |
Tax class III |
Tax class V |
Tax class IV |
|---|---|---|---|
2,000 euros |
0 euros |
322.41 euros |
110.91 euros |
2,500 euros |
0 euros |
491.58 euros |
208.41 euros |
3,000 euros |
60.50 euros |
643.83 euros |
317.08 euros |
3,500 euros |
142.66 euros |
803.50 euros |
432.75 euros |
4,000 euros |
239.33 euros |
972.25 euros |
555.58 euros |
4,500 euros |
340.16 euros |
1,141.41 euros |
685.41 euros |
5,000 euros |
444.50 euros |
1,310.58 euros |
822.25 euros |
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According to the FDP, the aim of the reform is to prevent spouses from having less money overall per month.
Details are still pending.
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 Lisa Paus (Greens), 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.”
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 childcare 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