This article first appeared on RTL.de
Actually, it is one of the biggest projects of the traffic light government: the reorganization of the tax classes. The topic was largely forgotten due to the Ukraine war and the energy crisis, but work is continuing on it – with consequences for millions of taxpayers.
We remember what the governing parties laid down in the coalition agreement: “In the course of improved digital interaction between taxpayers and the tax authorities, we will transfer the combination of tax classes 3 and 5 to the factor method of tax class 4, which can then be used easily and unbureaucratically and creates more fairness.”
This is intended to avoid the higher taxation in class 5 and to achieve a fair distribution of the tax burden. This applies above all to spouse splitting.
Because the marriage splitting has been criticized for years. “The marriage splitting comes from a time when one worked and one looked after the children at home and did the household chores. That is no longer the standard life model today and is not at all appropriate,” explains Finanztip editor-in-chief Hermann-Josef Tenhagen in an interview RTL the current situation.
The combination of tax classes 3 and 5 is the only way for married couples to benefit from spouse splitting: the joint taxable income of a married couple or a registered civil partnership is divided by two (“split”). If one partner earns significantly more than the other, then the bottom line is that the couple has a tax advantage.
The problem with spouse splitting: The partner with the higher income receives a significantly higher net income in tax class 3, while the partner with the already lower income in tax class 5 receives a significantly lower net income. And usually in a marriage it is the woman. As a result, many women lose the financial incentive to go to work.
Family Minister Lisa Paus (Greens) wants to “distribute the wage tax burden more fairly between spouses” with the redesign of tax classes 3 and 5.
But whether tax classes 3 and 5 will actually be completely abolished remains to be seen.
Because the truth also includes: The factor method of tax class 4, which is mentioned in the coalition agreement, is extremely unpopular with taxpayers. Only 0.6 percent of those entitled to apply use this procedure, and it is not even recommended by most tax consultants.
Not without reason: “The factor procedure for the tax class combination 4/4 for married people is neither effective nor economical. It misses the goals pursued by the legislature to promote equality,” writes the Federal Court of Auditors. He even recommends doing away with the factor method and examining how the goals pursued with it can be achieved in a different way.
And that’s exactly what’s happening. But no matter what the new tax classes will look like – there will definitely be noticeable changes for millions of Germans.
