14 Oct 2025
Political scientist Laura Seelkopf explains how tax laws are discriminatory and what consequences the practice of splitting income taxation between married couples has for society.
Laura Seelkopf, Professor of International Comparative Public Policy, investigates how tax systems lead to the unequal treatment of people. In this interview, she explains the impact this has on Germany.
In a recent article for the Journal of European Public Policy, you wrote that tax systems put women at a disadvantage. Why is that?
Laura Seelkopf: There are two ways in which the state can discriminate via the tax system: directly and indirectly. Direct discrimination happens when women are not allowed to contact the revenue authorities directly, for example. That was the case in Germany as late as the 1980s. Indirect discrimination is when women and men are not named separately in the wording of the law, and thus officially enjoy equal treatment, but when women bear a higher tax rate due to their sociocultural position.
In countries like Germany, where married couples are assessed jointly (a practice known as income taxation splitting), married women have a higher average tax rate than unmarried women.Laura Seelkopf, Professor of International Comparative Public Policy
Can you give an example of what that looks like in practice?
You see it very clearly in income tax. In countries like Germany, where married couples are assessed jointly (a practice known as income taxation splitting), married women have a higher average tax rate than unmarried women. In Germany and Belgium, this discrimination against women is the highest anywhere in Europe.
How does this effect come about?
Where income tax is split, the couple’s income is assessed jointly. The tax rate is reduced for the main earner with the higher income – usually the husband – but raised for the wife, the secondary earner. Overall, that is good for the couple. But that is not to say that the situation of the individuals improves.
Where the splitting rule applies, the couple is regarded as a household. The assumption is that what happens within the household is none of the government’s business. If both earn similar incomes, there is no effect. But woe betide them if not. The problem is that, in very many cases, couples who enjoy the benefit of income tax splitting do not share that benefit equally between themselves. One consequence is that, in the event of a divorce, women are in danger of falling into poverty. That is because they have worked less than they might have done if they had been taxed in a different way.
Why do women work less because of income tax splitting?
Let’s take a woman who wants to start working again after parental leave: She will obviously think about how much money she will earn and how much tax she will pay. If she is unmarried, she will not have to pay any tax to start with, because the first 12,000 euros or so are tax-free. After that, the tax rate increases progressively. In contrast, the effective tax rate for a married woman begins where that of her husband ends. In other words, she has to pay tax right from the start, and that at a considerably higher rate than if she were not married. Under certain circumstances, it may not be worth her while going to work, as a 2017 simulation by Alexander Bick and Nicola Fuchs-Schündeln shows.
If income tax splitting for married couples were abolished, as was done in Sweden in the 1970s, for example, women would begin to work much more – either by taking up work at all or by working significantly more hours. Interestingly, higher earning men did not stop working despite the now higher effective tax rates. So, we see that the social norm for men is to work full-time. That is why they react much less to tax (dis-)incentives than women do.Laura Seelkopf, Professor of International Comparative Public Policy
So, income tax splitting for married couples can have serious disadvantages for women. But does it also have consequences for society?
Of course it does. On average, women are just as well educated as men. Their potential productivity is equally high. Both receive free education at schools and universities. In Germany, there is a labor shortage that, for demographic reasons, is going to get worse. But the tax system still keeps many women from working more. In conjunction with employers’ reluctance to put women who work part-time in management positions, this leads to a situation where, as a society, we force very well-educated people out of the labor market entirely or force them to be less productive than they could be. Less work gets done and economic growth is lower as a result. There are estimates suggesting that equal [tax] treatment of women would boost economic growth by 0.6 percentage points per year. It follows that this kind of gender discrimination harms not only women, but everybody.
If income tax splitting for married couples were abolished, as was done in Sweden in the 1970s, for example, women would begin to work much more – either by taking up work at all or by working significantly more hours. Interestingly, higher earning men did not stop working despite the now higher effective tax rates. So, we see that the social norm for men is to work full-time. That is why they react much less to tax (dis-)incentives than women do.
Because of this effect, renowned economists have suggested that, given the same income level, women should on average pay a lower tax rate than men because the latter react less forcefully. In reality, the opposite happens because we in Germany assess both husbands and wives jointly for tax purposes.
The idea of an efficient tax system would be to levy taxes without influencing our life decisions.Laura Seelkopf, Professor of International Comparative Public Policy
29 Sept 2025
Why do we not simply abolish income tax splitting for married couples?
Since the 1980s, there have been several proposals to reform the income tax system. All these reforms failed – probably because they run counter to the interests of high-earning couples and of the main earners in these couples. Why is that? Because income tax splitting primarily helps couples with a wide earnings discrepancy and the higher the main earner’s income is. Politically, that is a very hot potato.
One frequent argument against the abolition of income tax splitting is what is referred to as the protection of legitimate expectation. This is the notion that abolition would punish couples who have opted for the traditional family model, in part because of the tax system, and that they have adapted to this system. This step was taken in divorce law, however. For all women, including those who lived for years in the traditional family model, it was decided in 2008 that, in the event of a divorce, they would no longer have a right to part of their former partner’s salary, and that they would soon have to go out to work again, even with relatively small children. The argument around the protection of legitimate expectation should apply either to everyone or to no one, not just to high-earning husbands.
Income tax splitting for married couples has also applied to homosexual couples since 2013. What effects does this ruling have?
One ifo Institute paper shows that homosexual couples adapt to income tax splitting just as heterosexual couples do, and that the secondary earner works less. Accordingly, the tax system does not only reflect a social norm, it has real effects in and of itself: It creates a situation where individuals suddenly change their behavior within a partnership because one has been designated the main earner and the other the secondary earner. In contrast, the idea of an efficient tax system would be to levy taxes without influencing our life decisions.
The tax system was developed for a society in which the-man-as-main-earner is the predominant model. But our society is no longer like that.Laura Seelkopf, Professor of International Comparative Public Policy
Are there other examples of indirect discrimination apart from income tax splitting?
Income tax and the possibilities surrounding what can be tax-deductible create a similar situation. The commuter allowance, the journey to work, is fully tax-deductible. Men are the primary beneficiaries. On average, they travel further to work than women, in part because more of them work full-time and are the main earners. On the other hand, childcare costs are an example of a cost that is not fully tax-deductible. Yet a lack of childcare is one of the main obstacles preventing women from being able to work at all or for longer hours. Here again, we see that the tax system was developed for a society in which the-man-as-main-earner is the predominant model. But our society is no longer like that.
Our society has also changed in that menstruation is talked about more openly, which in part fueled vigorous debate of the tampon tax.
Yes, what is known as the tampon tax was a very vivid example of indirect discrimination. It was reformed in Germany in 2019. The background to this decision was that a lower rate of value-added tax is imposed on certain products such as bread, for example. For a very long time, however, tampons and other menstrual products were – and still are, in many countries – taxed at the normal rate of VAT. That is not the case with for instance Viagra and condoms.
Other issues are less conspicuous and cannot be politicized to the same extent. One reason why indirect gender discrimination in the tax system is so well hidden is that its impact is exerted via sociocultural positions in society. Another factor is that most of the examples I have cited so far are very Western. Income tax in particular is much less important in many parts of the world, where governments fund themselves more via taxes on consumption. That said, most of the people affected by gender discrimination, including that in the tax system, live outside of mature democracies. Whatever the case, a lot of research still needs to be done.
Laura Seelkopf is Professor of International Comparative Public Policy at LMU’s Geschwister Scholl Institute. As part of the project “Gendered Political Economy of Taxation”, she is seeking to explain why gender discrimination persists to such an extent in the tax system. She is also working on a systematic analysis of what tax reforms have taken place in which countries and what factors lead to greater gender equality within the tax system.
Laura Seelkopf: Invisible, but taxed: Gender, Power, and the Tax State. In: Journal of European Public Policy 2025. DOI: 10.1080/13501763.2025.2491755
More publications:
Anne Kingma and Anneleen Vandeplas: The Macro-Economic Benefits of Gender Equality. In: Economic Brief 071 European Commission 2022
Alexander Bick and Nicola Fuchs-Schündeln: Quantifying the desincentive effects of joint taxation on married women’s labor supply. In: American Economic Review 2017
Elena Herold, Leonie Koch and Carina Neisser: Disentangling Gender Norms and Tax Incentives: Analyzing Joint Taxation among Same-Sex Couples. Conference Paper. Ifo Institute