While, in most countries of the Organization for Economic Co-operation and Development (OECD), each individual is taxed on his own income, it is the rule of taxation by fiscal household that prevails in France for couples. married and civil union. Under the marital quotient, they are allocated two shares and their income is aggregated to be taxed together. The same level of taxation therefore applies to everyone’s individual income.
If the spouses have comparable incomes, the tax payable by the couple is the same as if they were taxed separately. On the other hand, if there is a large income gap between the two members of the couple, being taxed together usually allows them to pay less tax than if they were taxed separately.
The savings they make is all the more important as their income is unequal. It grows with the level of household resources, because unlike the family quotient, whose tax benefit is capped at 1,570 euros per year for each additional half-share related to the children, the benefit of the marital quotient is not not capped.
The other side of the coin? “This mechanism leads to over-taxation of the spouse who has the lowest income, since it will suffer the marginal rate of the best-paid spouse. Given the inequalities in income, this is the woman in the majority of cases. Taxation by household has a deterrent effect on female employment and encourages unequal couples to remain so ”, underlines Lise Chatain, lecturer at the Faculty of Law and Political Science of Montpellier.
74% of married couples pool all of their resources, but only 59% of couples where both spouses are active and 30% of PACS couples
The implementation of the withholding tax at the beginning of 2019, with the individualization of the tax collection method, amplifies this phenomenon, since each member of the couple is subject by default to the same tax rate, that of his tax household. . Consequence: the one who is the least well paid ends up with a “net payable” after deduction at source lower than that which he would have received if it had been taxed separately.
Which is not really a problem for couples who put everything in common. But this is far from the reality of couples today: if 74% of married couples pool all of their resources, this proportion is only 59% in couples where both spouses are active and 30% for PACS couples (” The pooling of income in couples ”in Insee first).
You have 46.91% of this article to read. The rest is for subscribers only.