The Income Splitting Method: Is it Good for Both Marriage Partners?
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Matthias Wrede
Abstract
This paper analyzes how deviating from individual taxation affects married couples. The focus is on time allocation, on investment in family-specific human capital and on distribution of income within the family. Two insights are discussed in detail. First, the distribution of tax-reduction gains due to the income splitting system depends on whether the family has been started or not. After marriage, joint taxation increases redistribution among family members. Second, although joint taxation reduces the tax burden of the family, it might harm the marriage partner that is more productive in household production provided that potential marriage partners foresee the effects of joint filing on the time allocation within the family.
© 2019 by Walter de Gruyter Berlin/Boston
Articles in the same Issue
- Can Insider Power Affect Employment?
- Pension Reform, Capital Markets and the Rate of Return
- Supply-Side Economics of Germany’s Year 2000 Tax Reform: A Quantitative Assessment
- The Income Splitting Method: Is it Good for Both Marriage Partners?
- The Effect of Communication Media on Cooperation
- Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining
Articles in the same Issue
- Can Insider Power Affect Employment?
- Pension Reform, Capital Markets and the Rate of Return
- Supply-Side Economics of Germany’s Year 2000 Tax Reform: A Quantitative Assessment
- The Income Splitting Method: Is it Good for Both Marriage Partners?
- The Effect of Communication Media on Cooperation
- Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining
