Minister unveils tax break plan for families
The Local · 20 Jun 2013, 14:59
Published: 20 Jun 2013 14:59 GMT+02:00
Under the present system, married couples can choose to combine their salaries and then divide the total by two, so that each person pays tax on the couple's average income. This particularly benefits couples where one person earns considerably more, as it means the bigger earner can avoid a higher tax bracket.
Critics have pointed out that the system discriminates against non-married couples and stems from a time when being a married couple presupposed having children, at whom the tax breaks were aimed.
Schröder said that while the present system would not be scrapped, it would be amended so that couples with children would benefit more. Families with married parents and children would have most advantages, she said. In addition, child benefit would be increased and there would be more day care places provided.
But Social Democrat chancellor candidate Peer Steinbrück criticized the scheme as too expensive, as well as unfair. "We can't afford it, and it only strengthens the imbalances that we have under the current system," he said, adding "It's a benefit for the highest earners, while those on low salaries are clearly at a disadvantage."
Although Germany invests heavily in family-friendly policies, the birth rate remains stubbornly low while the population ages. The birth rate has hovered between 1.24 and 1.45 children per woman since 1975.