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SPD Push to Scrap Spousal Income Splitting Puts German Tax Break Under Fresh Scrutiny

Analysts put potential revenue near €20 billion, with the headline €20,000 benefit limited to very high earners.

Overview

  • The SPD is calling for full abolition of Ehegattensplitting, while the CDU/CSU seeks to keep it, leaving the issue unresolved for now.
  • DIW notes the maximum annual saving of €19,247 applies only at roughly €556,000 in taxable income with a large single-earner gap.
  • Typical households see far smaller effects, with examples showing about €2,700, €850 or €300 in yearly savings depending on income splits.
  • Coverage highlights exaggerated claims of sweeping €20,000 losses for most couples, which economists say do not reflect common situations.
  • Policy options under discussion include capping the benefit, a transferable basic allowance, or family-based splitting backed by the Thuringian CDU, with DIW modeling indicating modest gains in female labor participation under individual taxation.