Open Letter Proposes Ehegattensplitting Reform with Limited “Realsplitting” and Child Benefit Payouts
Open letter on Ehegattensplitting reform ignites debate; authors propose a limited ‘Realsplitting’ and direct revenues to families through child benefits.
The publication of an open letter calling for an Ehegattensplitting reform has sparked a broad public debate, proposing a shift from full income splitting to a constrained “Realsplitting” model. The authors argue that the reform would preserve tax recognition of marriage while returning any additional revenue entirely to families through higher child benefits and increased child tax allowances. The proposal names a specific transfer cap and links the fiscal redesign to stronger incentives for second earners and more targeted support for families with children.
Open letter triggers responses across politics and academia
The letter drew swift reactions from scholars, politicians and family organizations, generating both support and criticism within hours of publication. Prominent economists and public finance experts backed the proposal’s intent to rebalance incentives, while some family associations and political figures warned of unintended distributional effects. The debate has centered on whether a reformed splitting mechanism can preserve the symbolic recognition of marriage without reproducing the full advantages of the current system.
Details of the proposed limited ‘Realsplitting’
Under the proposed Realsplitting, spouses could transfer up to 13,805 euros of taxable income from the higher- to the lower-earning partner for tax calculation purposes. That cap mirrors an existing maintenance-allowance threshold in current tax law, the authors say, and would limit the traditional splitting benefit rather than remove it entirely. Couples with income differences up to 27,610 euros would see no change in their tax outcome, while those with larger disparities would face a reduced splitting advantage.
How the plan would use the fiscal gains
The authors stipulate that any revenue raised by narrowing the splitting advantage must be recycled fully to families with children. The suggested channels are increases in monthly child benefits and higher child tax allowances, designed to reach households where children live. Framing the revenue recycling as a transfer to families aims to couple fiscal consolidation with explicit support for child-rearing and to make the reform politically and socially progressive.
Constitutional and legal questions addressed
Critics have questioned whether the proposal conflicts with constitutional protections that single out marriage and family for special safeguarding. The authors counter that the Basic Law requires equal treatment of marriage only in a comparative sense and does not prescribe a single tax mechanism to accomplish that goal. They point to legal interpretations that accept the current splitting model as constitutional but do not consider it the exclusive option, arguing the planned Realsplitting would sustain recognition of marital ties within tax policy.
Distributional concerns and exceptional cases
Opponents also warn that couples with identical household incomes could be taxed differently under the new rules if their internal income splits differ, potentially raising fairness objections. The proposal acknowledges this possibility but notes the design preserves transferability up to the cap to mitigate many such cases. For rare circumstances where care or maintenance needs exceed the cap—such as high long-term care costs—the authors suggest existing provisions for extraordinary burdens and documented special deductions could be used to address those outliers.
Childcare bottlenecks and the incentive argument
Some respondents argued tax incentives alone are insufficient while childcare supply remains constrained, limiting parents’ ability to expand paid work even if taxation becomes more favorable. The letter’s authors accept that childcare expansion is a parallel requirement and frame their tax proposal as complementary rather than a substitute. They stress that the Realsplitting would also strengthen incentives for second earners without young children, so the labor-market effects are not solely contingent on childcare capacity.
The three signatories of the letter—Nicola Fuchs‑Schündeln, Monika Schnitzer and Katharina Wrohlich—underscore the proposal’s combined aims: preserving a tax-based recognition of marriage, targeting resources to families with children, and improving work incentives for secondary earners. Their public intervention has transformed a technical fiscal debate into a broader conversation about the role of tax policy in family support and labor supply.
Legislators and stakeholders now face the task of weighing constitutional, distributional and practical considerations as the proposal moves from academic and policy circles into parliamentary debate. Lawmakers must assess the exact cap level, the modalities for returning revenue to families, and safeguards for exceptional hardship, while also considering complementary investments in childcare infrastructure.
As the discussion continues, the proposal’s authors and their critics agree on two points: any change to Ehegattensplitting will have measurable winners and losers, and the success of a reform will depend on careful calibration and parallel social policy measures to support families and labor market participation.
