The German Social Democratic Party (SPD) has seized upon a recent initiative by Family Minister Karin Prien (CDU), intensifying pressure on their coalition partners, the CDU and CSU, to reconsider the long-standing practice of income splitting for married couples. SPD General Secretary Tim Klüssendorf stated that a “courageous” and collaborative effort is needed within the governing coalition to develop a new framework that reflects the evolving realities of modern families.
The SPD has consistently advocated for a departure from the current system, arguing that it perpetuates outdated perceptions of gender roles and disproportionately disadvantages women. The current income splitting model, where the combined income of married couples is taxed as if each partner earned half, frequently delivers significant tax relief for high-income earners. However, this often places a heavier tax burden on women, who statistically earn less than their spouses, rendering their extra work financially less rewarding.
Family Minister Prien echoed the need for reform, acknowledging in a recent interview that the system should evolve to be more adaptable to diverse family structures. She expressed a desire for greater political courage, adding that the tax code should not be used to enforce specific lifestyles.
Despite acknowledging the need for change, the CDU and CSU’s commitment to the existing system remains a significant hurdle. Their published program explicitly defends income splitting, although it proposes a greater emphasis on children’s tax benefits, including aligning children’s exemptions with parental rates and increasing child allowance. The lack of any mention of a reform within the existing coalition agreement further complicates the potential for change.
The SPD’s push highlights a growing political tension within the German government. While the need to modernize the tax system and address gender inequalities is increasingly recognized, navigating the deeply entrenched political support for income splitting and adhering to pre-existing coalition agreements present formidable challenges. The debate also exposes a wider discussion about the role of the state in shaping family structures and the potential for tax policy to exacerbate or mitigate existing societal inequalities.