Family-Based Tax and Transfer System – Issues for Income Tax and Other Public Policies

Abstract

In France, married couples or couples in civil partnerships must declare their resources jointly and are allocated two tax units. This tax system, referred to as the marital quotient, represents a financial package of around 10 billion euros. Using the Ines microsimulation model, we simulate three reforms of this system: an individualisation of taxation, a reduction of marital quotient to 1.5 tax units while allowing married couples/couples in civil partnerships to opt for individual taxation and, finally, the capping of the marital quotient at the same level as the family quotient. Individualisation results in the highest tax gain (around 7 billion), compared with 3.8 billion when the marital quotient is reduced to 1.5 tax units and 3 billion with the marital quotient cap. With these reforms, 46%, 45% and 7% of couples lose out, respectively. The median losses correspond to 1.5%, 1.3% and 2.6% of the disposable income of the households concerned, respectively. Finally, 60%, 64% and 83% of the losses are in the last three standard of living deciles, respectively.

Not a single meaning: Definition and evolution of singlehood in France and the United States

“…In line with this thesis, several authors have stressed that singles have more harsh living conditions than married individuals, especially in terms of their economic situation. In both France and in the United States, single individuals often pay a higher income tax than married couples (Alm et al, 2002; Carbonnier, 2021), and a recent study observed a different treatment between the two groups by the US Social Security system (Groneck & Wallenius, 2021). Inequality has also been observed within private enterprises in which being married allows men to earn more than their single peers by simple reputation (Antonovics & Town, 2004).…”