Merkel plays it safe on tax breaks for gay couples

Tomorrow’s news today: in early summer, judges at Germany’s highest court in Karlsruhe will dismiss as unconstitutional 55-year-old tax privileges for married couples.

After the verdict is announced, German chancellor Angela Merkel will welcome the ruling and promise legislation. Just not too soon.

With a general election looming in September, the Karlsruhe ruling creates a taxing dilemma for the German leader. At stake is the “special protection of the state” extended to marriage and the family under article six of Germany’s post-war Basic Law.

Since 1958 this has been reflected in “spousal splitting”, a tax code rule allowing married couples to pool their incomes and then halve them for tax purposes. The greater a couple’s income difference, the greater the combined tax saving.

This has come under pressure in recent years, particularly since Germany introduced civil partnerships for same-sex couples in 2001. Gay couples enjoy many of the rights and privileges of married couples, but not in adoption and tax law.

But in a series of rulings the Karlsruhe court has dismissed as unconstitutional one legal restriction after another for gay couples. Last month the court extended additional adoption laws to gay couples. The “spousal split” tax breaks for married couples are next for the chop.

“I’m no fan of the spousal split but, for me, this case is about the principle of equal treatment before the law,” said accountant Stephan Wolsdorfer, one half of the couple whose complaint Karlsruhe is considering.

Inopportune time

The ruling will come at an inopportune time for Angela Merkel. Since becoming leader of the Christian Democratic Union in 2000, the pragmatic leader has nudged the traditionally right-wing party into the political centre, scooping up floating voters and binning many cornerstones of party tradition in the process.

Military service has been abolished, nuclear energy mothballed and, in their stead, the CDU has embraced previously unthinkable positions like support for a quasi-minimum wage and childcare for all.

Six years ago the CDU’s new political programme redefined its view of family as “where parents take long-term responsibility for children”. Moving from theory to practice, however, is proving to be a political can of worms.

Critics of the “spousal split” say it subsidises a model of life from 1958 – one breadwinner and married life with children – and has little to do with today’s reality where two-thirds of German women work and a third of children are born out of wedlock. In modern Germany, say critics of the status quo, marriage is a subset rather than a synonym for family.

“The annoying thing in the debate is how family and marriage are mixed up and mentioned in the same breath though they are two different things,” said Wolsdorfer.

Now this hotly fought debate has reached the CDU. Alarmed traditionalists see marriage under attack, its special constitutional protection being undermined.

Reformers say they want to give privileged status to all family forms and reform tax privileges to reflect their original purpose: subsidising the expense of raising children, regardless of parents’ marital status or sexual orientation.