Tax reform: Abolition of tax classes 3 and 5 planned

Tax reform: Abolition of tax classes 3 and 5 planned

The federal government plans to abolish the current tax classes 3 and 5 in order to classify married couples uniformly in tax class 4 in the future. This change could have significant implications, particularly for spouses where one partner earns significantly more than the other. By merging the two tax brackets, the higher-earning partner would receive less net income, while the lower-income partner would keep more money.

Tax brackets 3 and 5 were originally introduced to give married couples more disposable income each month, even if this often led to additional tax payments. However, this constellation often led to a power imbalance within the family, particularly with one partner bearing the majority of the tax burden. The abolition of these tax brackets aims to increase incentives to work, especially for women.

The effects of the abolition of tax brackets on married couples can be illustrated using examples. This shows that the total tax revenue does not change, but the temporal distribution of payments is influenced. This can result in married couples finding themselves with a smaller budget each month, even if the overall tax burden remains the same.

With regard to women, the Wage Tax Assistance Association in Bavaria emphasizes the importance of the change in the law, as women are more often classified in tax class 5 and are therefore financially disadvantaged. This structural inequality can have a negative impact on women's financial situation over the course of their lives, particularly in relation to pensions and poverty in old age. The abolition of tax classes 3 and 5 could therefore have long-term effects on financial equality for women.