SPD and spouse splitting: at the expense of the middle class

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“Beneficiaries” of the splitting of the spouses are “mainly single-earner couples with high incomes”, says the draft of the SPD election program.

With the demand to abolish splitting, the party has rekindled a discussion that has been going on for years.

Income tax increases above a tax-free range with increasing income.

And not just in nominal terms, but also as a percentage - from 14 to up to 42 percent, the top tax rate.

This has to be paid from a taxable income of more than 57,918 euros.

For income over 274,612 euros, the wealthy tax applies at 45 percent.

Spouses can choose a joint assessment.

Then their taxable income is first added and then divided by two.

The respective income tax rate is applied to this half of the amount and the resulting income tax is doubled.

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What sounds complicated has a simple purpose: married couples with the same total income always face the same tax burden, regardless of how much the individual spouse earns.

It would be different without splitting.

Gert Wöllmann, tax advisor at the auditing and consulting company PricewaterhouseCoopers Germany, has calculated what this means for 2021 using a few examples.

According to this, a married couple with a taxable income of 90,000 euros pays 20,222 euros in taxes.

If both earn the same amount, i.e. 45,000 euros each, taxation would remain unchanged without spouse splitting.

For example, if one spouse earns 60,000 euros and the other 30,000, the tax burden would increase by 932 euros.

And the greater the difference in income, the higher the additional burden: in the example up to 9,834.13 euros.

The same applies to lower income.

For example, with a taxable income of 45,000 euros, the additional burden would amount to 4245 euros.

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The Federal Constitutional Court sees spouses splitting as appropriate taxation based on the basic legal protection of marriage and the economic efficiency of the spouses.

However, that does not mean that any other taxation is impossible.

However, it must meet the constitutional requirements.

In this respect, the Karlsruhe judges emphasize that the state has to refrain from anything in tax law that “damages or otherwise impairs the marriage”.

The legislature must “avoid regulations that are likely to interfere with the free decision of the spouses about their distribution of tasks in the marriage”.

This also includes “the decision whether a spouse wants to devote himself exclusively to the household and the upbringing of the children”.

Married couples must not be “pushed” to “shape their marriage in a certain way”.

The SPD's draft program only states that splitting should be omitted.

No other system is mentioned.

Just abolishing splitting would be unconstitutional because not even the subsistence level of an inactive spouse would remain tax-free.

Hopefully this is not what you want.

But that cannot be said for sure.

Upon request, the SPD announced that it “had to refer to the party congress on May 9”.

One can be curious.

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In its last government program, the party called for spouses to be able to transfer income shares of up to 20,000 euros for tax purposes instead of splitting.

For example, if one spouse earns 70,000 euros and the other 30,000, taxation would be based on 50,000 euros.

In this example, the tax burden would be just as high as with spouse splitting.

“There is an additional burden if the income difference is higher than 40,000 euros,” explains Gert Wöllmann.

Single-earner marriages would be most affected - not only for top wages, but also, for example, with an annual income of 50,000 euros.

It would also lead to additional burdens for many double earners, and not only if one spouse works part-time.

A large difference in wages can also result from different occupations alone.

"There will be no additional burden for a group, regardless of whether the spouse splitting is abolished without replacement or replaced by a transfer amount," adds Gert Wöllmann.

"Double earners whose taxable income is above the top tax rate or even the tax on the rich".

For example, a professor who is married to a top civil servant can calmly look forward to the SPD's decision - unlike a saleswoman with a skilled worker as a husband.

A (former?) Workers' party should think twice about that.

Arnd Diringer is a professor at the Ludwigsburg University of Applied Sciences.

He is the author of numerous publications on constitutional, civil and labor law.