Tax planning of married couples and intra-household income inequality

• 成果类型: Article
• 署名作者: Buettner, Thiess; Erbe, Katharina; Grimm, Veronika
• 署名单位: University of Erlangen Nuremberg; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2019.104048
• 发表日期: 2019
• 关键词: Tax planning; Tax avoidance; tax arbitrage; married couples; Separate taxation; Family decision making; Gender differences; payroll tax; Individual tax returns

摘要

This paper examines tax planning of married couples under separate taxation. It shows that concerns about the intra-household income distribution prevent couples from minimizing tax payments. The empirical analysis exploits a specific feature of the German tax system, which allows married couples to save taxes by deviating from the default symmetric payroll-tax treatment and assigning favorable tax treatment to the primary earner and unfavorable tax treatment to the secondary earner. Based on a representative random sample of individual tax files, we find that a couple is less likely to choose the tax-minimizing treatment if tax planning is associated with a larger decline of the net-of-tax income of the secondary earner. This applies regardless of whether the husband or the wife is the main earner. However, couples where the wife is the main earner are generally more reluctant to assign the more favorable tax treatment to the wife. (C) 2019 Elsevier B.V. All rights reserved.