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Why we have to campaign to end Ehegattensplitting (& better things we could do with the extra cash!)

Germany is one of just a handful of countries around the world where - since 1958 - couples have been able to declare their income jointly as a way to save taxes - we all know this as “Ehegattensplitting.” It lowers the tax bill of a couple overall - but it also disincentivises the family’s lower earner from working more if that extra income then pushes the couple into a higher tax bracket together.

We put a poll asking our participants about this on our app everyone agreed that it needs to be abolished. As journalist Christoph Sackmann writes in Focus Online: “It’s outdated, coming from a time when the classic roles of the career-husband and the housewife raising children applied."

Also interesting to read this analysis by Canada’s Institute for Research on Public Policy (IRPP) advising the Canadian government on the same topic [see ] : "Gender equity turns out to be a more vital criterion for assessing income splitting than for most tax policy problems,” they write. "The choice of tax unit has major potential effects on the well-being and autonomy of married and cohabiting women. Joint taxation or the splitting of labour income would reinforce women’s traditional roles of staying at home, and work disincentives for a couple’s second earner.”

So - we think it should be done away with! And - if you were to ask me, I would suggest that the government use those tax savings to incentivise the second caregiver to take parental leave too - like in Canada, where full parental leave pay is only disbursed if both caregivers take parental leave, encouraging both parents to become full caregivers right at the beginning of their children’s lives and making for more equality later on.

What do you think? Would you still advocate for it to be abolished, even if that meant a tax hike for you personally? Where would you want the state to spend the extra money?

We would love to know your thoughts!

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