Submitted by Thomas Kolbe

Faced with a rapidly worsening budget outlook, German Finance Minister Lars Klingbeil (SPD) believes he has finally found a fresh source of revenue. By scrapping the long-standing “marriage splitting” tax benefit—a system that allows couples to pool income and reduce their tax bill—he hopes to plug the ever-widening budget holes. It marks the preliminary climax of a tax hike debate designed less to fix Germany’s fiscal crisis than to relieve politicians from the pressure of implementing structural reforms.

In truth, this development comes as no surprise. The SPD has long sought to abolish marriage splitting. The measure is framed as a response to Germany’s structural deficit, which is projected to balloon to more than €170 billion by 2029—provided, of course, that the German economy does not sink even deeper into recession than it already has.

Ideology Masquerading as Fiscal Prudence

One must ask whether the recent public debate over inheritance tax hikes was nothing more than a test balloon, meant to measure how much additional burden the German population is willing to shoulder. Taken together, both initiatives—the higher inheritance tax and the abolition of marriage splitting—are perfectly complementary in the eyes of SPD ideologues. Both measures strike directly at a family and generational model regarded by the finance minister as “outdated” and now scheduled for fiscal liquidation.

The Social Democrats had long prepared themselves ideologically for this strike. And what else should one expect from a party that has, in large part, abandoned the classical family model—trading it in for identity-politics constituencies such as the transgender movement and other clientelist groups?

Klingbeil himself reveals what vision underlies this tax offensive: “Parental benefits should encourage men to take more responsibility in the family. Without those benefits for high-earning parents, it could once again become common for women to stay home. That would be a setback for equality,” he declared.

Beyond mere fiscal considerations, the SPD’s politicians are aiming for nothing less than the ideological reshaping of society. Through tax policy, they want to enforce a new societal model—one that strips citizens of real choice, stands in direct opposition to bourgeois traditions, and works against the civic foundations of the country.

DIW Provides “Scientific” Cover

And as always, whenever the state is on the hunt for new revenue streams, the Berlin-based German Institute for Economic Research (DIW) is close at hand. The economists around DIW president Marcel Fratzscher once again provide seemingly scientific cover. They calculate, down to the last decimal, how much the abolition of marriage splitting would bring into government coffers.

According to DIW, eliminating the system would generate additional tax revenues of €20 to €25 billion annually. This figure corresponds to the current shortfall created by the policy, since it primarily benefits couples with very unequal incomes—such as single-earner households. Voilà: the budget gap would be closed, at least temporarily. And all this without painful reforms, spending cuts, or coalition strife.

To DIW, marriage splitting is nothing more than a relic of patriarchy. But this view illustrates the real dilemma of publicly financed institutes: in case of doubt, they always bow to the prevailing ideology of the day, moving ever further away from their actual mission of neutral scientific analysis. In reality, it would be their duty to point out the blatant imbalances in Germany’s fiscal architecture—its bloated bureaucracy, its suffocating tax burden, and its overreaching state that strangles private enterprise.

Drowning in Revenue, Crying Poor

For the ongoing debate about higher taxes to occur against such a backdrop borders on the grotesque. Germany already operates with a state quota exceeding 50%. Federal revenues have soared in the last decade, rising from roughly €311 billion in 2015 to €440.6 billion in 2024—an increase of about 42%.

The trend is accelerating. In just the first half of 2025, €273.2 billion flowed into Berlin’s coffers, a jump of 5.5% compared to the previous year. Tax receipts, the largest component of revenue, climbed from €282 billion (2015) to €375 billion (2024). By August 2025 they had already reached €247.6 billion. The state is, quite literally, swimming in money.

Despite this, Berlin keeps inventing new taxes to soften coalition conflicts and delay reforms. For 2026, the government plans another hefty spending increase of about 6%, taking total federal outlays to roughly €530 billion. Meanwhile, the private economy is forecast to shrink by 4–5%. The political class in Berlin seems to have forgotten a simple truth: state revenues ultimately depend on a thriving private economy. Instead of cutting spending in a time of depression, Berlin doubles down on statism and redistribution.

A Blow to Social Cohesion

That the SPD is now preparing the largest tax increase since World War II—deliberately targeting the family, the bedrock of bourgeois society—will inevitably deepen Germany’s already fragile social fractures. The decisive question is whether the coalition partner, the CDU, will mount a robust defense and reject the plan.

So far, conservatives remain evasive. Back in May, CDU general secretary Carsten Linnemann dismissed an SPD proposal, stressing that marriage splitting must be preserved unless replaced by a broader “family splitting” model that also covers non-traditional households. In July, the CDU Women’s Union categorically rejected the SPD’s demand, underlining the high social value of supporting family structures.

Yet, as with so many issues, one never really knows where the CDU will stand in the end. If past experience is any guide, coalition loyalty may once again outweigh principle. In that case, Germany is heading toward its most consequential tax raid in generations—one that will weaken families, polarize society, and erode what remains of its economic backbone.

* * * 

About the author: Thomas Kolbe, a German graduate economist, has worked over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.