Last weekend several thousand people demonstrated in Munich against abortion and assisted suicide. One speaker described a supposed “culture of death” in Germany and cited the government’s plan to abolish “spousal tax splitting” as evidence.
The controversy raises the question of whether tax law belongs in debates about the sanctity of life — or whether the reaction is simply another example of populist outrage. Either way, the uproar over proposals to end spousal tax splitting is striking.
The debate was triggered by Lars Klingbeil, the Social Democratic Party (SPD) vice-chancellor and finance minister, who said he wants to abolish the joint taxation of spouses’ income, a system in place since 1958. Under that system, married couples (and, since 2013, civil partners) may choose joint assessment: the couple’s combined taxable income is halved, tax is calculated on that half, and then doubled. Because Germany’s tax rates rise with income, this benefits households where one partner — often a man — earns much more than the other.
For example, if one partner earns €60,000 and the other nothing, the couple is taxed as if each earned €30,000, saving nearly €5,800 a year compared with separate filings. The Finance Ministry estimates spousal splitting costs the state up to €25 billion annually.
Critics say the system discourages women’s employment, since a woman’s earnings can push the household into higher tax brackets. Klingbeil has argued the system is “out of step with the times” and reflects “a view of women and families that is completely at odds with my own.”
Surprisingly, Johannes Winkel, head of the CDU youth wing, has voiced similar concerns, saying policy should incentivize both partners to work and that tax relief should focus on married couples facing child-rearing hardships. By contrast, Chancellor Friedrich Merz has expressed skepticism, arguing that “marriage is a relationship based on shared income and mutual support” and that income in marriage should be treated jointly for tax purposes.
Germany’s female labor-force participation is high — about 74% — but roughly half of women work part-time. Klingbeil proposes replacing the current system with a more flexible scheme allowing partners to allocate tax-free income between them to minimize their joint tax bill. That would preserve some benefit but reduce the advantage tied to one high earner.
It remains uncertain whether Klingbeil can enact the change. Similar spousal tax benefits still exist in countries such as Poland, Luxembourg, Portugal and France.
This article was originally published in German.