Economists call for reform of spousal splitting in favor of families

According to the economists, the resulting additional revenue should be fully redirected to families. Child benefit and the child allowance would increase by around 22 percent. Specifically, the monthly child benefit per child would rise from 259 euros to 316 euros. Couples with children would be relieved by an average of 585 euros per year.

What specifically should change

The researchers primarily justify their initiative by the demographic change and the growing shortage of skilled workers in Germany. They argue that the existing splitting primarily benefits partnerships where the man earns a lot and the woman earns little or nothing. This reduces the incentive for the lower-earning partner – usually the woman – to take up or expand employment.

Nicola Fuchs-Schündeln explained: "In view of demographic change, we must better utilize the earning potential of the many well-educated women in Germany." She added: "And if you want more people to expand their working hours, you have to ensure that it is also financially worthwhile."

Justification: Skilled labor shortage and earning potential

Simulations by the signatory researchers suggest that the reform could create around 49,000 additional full-time jobs because taking up or expanding employment would be more worthwhile for the secondary earner. Single parents would also benefit, as child benefit and the child allowance would increase, and the income situation of the remaining parent would no longer be combined with a fictitious partner for tax purposes.

In the open letter, the economists explicitly emphasize that the reform is not an attack on marriage: "Such a reform would not be an attack on marriage and family. On the contrary: it would reduce the protection of marriage to its core and strengthen families with children more effectively." They formulate their guiding principle as: "Protect marriage, strengthen families, increase work incentives."

Political context: SPD and Union

Politically, the proposal is an attempt to outline a compromise between the coalition partners. The SPD wants to limit spousal splitting for new marriages and introduce real splitting. The CDU/CSU, on the other hand, insists on tax-related spousal support. The researchers see the cap as a middle ground that should accommodate both sides.

The German Council of Economic Experts had already pointed out the disincentives of the existing splitting in previous statements. Fuest and Fratzscher had also spoken out in favor of reforms that strengthen employment incentives in the past. With the joint letter, the heads of the most important German economic research institutes are now increasing the pressure on the government to address the reform in the current legislative period.

It remains unclear so far how the federal government will react to the letter. The Ministry of Finance had not yet issued a statement. However, observers interpret the initiative as a signal that scientific expertise is gaining weight in the ongoing debate on tax, family, and labor market policy.