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IW-Analyse No. 133 3. December 2019 Martin Beznoska / Tobias Hentze / Susanna Kochskämper / Maximilian Stockhausen The Taxation of Spouses in Germany: The economic impact of different reform proposals

How can spouses be taxed both efficiently and fairly? It is not possible to formulate a universally valid solution to this question from a pure tax system point of view, because it depends on the underlying assumptions and norms.

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The economic impact of different reform proposals
IW-Analyse No. 133 3. December 2019 Martin Beznoska / Tobias Hentze / Susanna Kochskämper / Maximilian Stockhausen

The Taxation of Spouses in Germany: The economic impact of different reform proposals

IW-Analyse

Martin Beznoska / Tobias Hentze / Susanna Kochskämper / Maximilian Stockhausen German Economic Institute (IW) German Economic Institute (IW)

How can spouses be taxed both efficiently and fairly? It is not possible to formulate a universally valid solution to this question from a pure tax system point of view, because it depends on the underlying assumptions and norms.

What is striking in Germany is that fiscal and social legislation contain contradictory provisions. As amended in 2008, the law’s position on alimony suggests that a marriage’s secondary earner can become path dependent if, following the logic of income splitting, they are not, or only marginally, gainfully employed during the marriage. Simulations show the economic impact of different reform models. Limiting the present arrangement, for example, by allowing current spouses only the restricted degree of joint taxation applicable to alimony payments or by introducing individual taxation with a transferable basic tax allowance would limit the splitting effect and therefore particularly penalise marriages where one partner works only part-time or not at all. The work incentives for second earners, and thus especially for women, could only be gradually increased by switching to alternative forms of taxation without accompanying tax relief. For radical improvements, further measures would be necessary, for example relating to the supply of day care centre places and to mini-jobs and free joint-membership of the statutory health insurance system.

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The economic impact of different reform proposals
IW-Analyse No. 133 3. December 2019 Martin Beznoska / Tobias Hentze / Susanna Kochskämper / Maximilian Stockhausen

Martin Beznoska / Tobias Hentze / Susanna Kochskämper / Maximilian Stockhausen: Die Besteuerung von Ehepaaren in Deutschland – Ökonomische Effekte verschiedener Reformvorschläge

IW-Analyse

Martin Beznoska / Tobias Hentze / Susanna Kochskämper / Maximilian Stockhausen German Economic Institute (IW) German Economic Institute (IW)

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Reform of Personal Income Tax
IW-Policy Paper No. 5 30. June 2026 Martin Beznoska / Tobias Hentze

Reform of Personal Income Tax

Reforming personal income tax has been on the political agenda for years. Although bracket creep has largely been offset over the past ten years, the income tax schedule itself has not been structurally reformed.

Martin Beznoska / Tobias Hentze IW

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IW-Report No. 61 24. November 2025 Björn Kauder

Public spending in international comparison: Where does Germany stand in comparison to its neighboring regions?

Germany faces numerous political challenges. How these tasks are prioritized is reflected in spending policy. It is not without reason that the budget is often referred to as “politics cast in numbers.”

Björn Kauder IW

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