Rich people problem. See how singles are taxed and stop yelling
Long overdue.
People leaving the country? We’re nearly at 700k population and rapidly climbing to 1 million, so who is leaving?
I got married in Luxembourg this year and I REALLY enjoyed the married tax benefits, we got like an extra €3000 a month. It’s a shame they’re increasing it.
I mean let’s be honest why should a married couple pay less taxes than a couple who isn’t married?
The argument I hear often is that it promotes a financial incentive for people to have kids… But people who have kids get specific child tax credits, extra money for their children etc.
I find it utterly bizarre that he would say the advantage will be visible in case of a divorce.
I mean what kind of an argument is that?
Or that people don’t get married anymore today.
Well they CAN so if they chose not to why punish the ones who still want to get married?
Obviously it’s not the 60s anymore but couples also need to be able to give their child into daycare if we expect them to retun to work.
„So there are also advantages resulting from the reform?
Of course there are advantages. This applies, for example, in the event of a divorce. If this happens today, the tax class of the ex-spouse will change in the following years. This can sometimes be complicated to deal with. With individualisation, the tax system you are subject to remains the same before, during and after the marriage.
There could also be some changes. For example, a married couple where one spouse chooses to stay at home could be allowed to continue to pay contributions into the statutory pension system for that spouse. This would ensure that these years are taken into account when calculating the future pension.“
What does “splitting” mean?
Anyone who is married or partnered (tax class 2) currently has the right to being taxed under the so-called “splitting” procedure.
This means that the income of both spouses is added together and divided by two, with the tax rate being applied to half of the total income of the spouses. The resulting tax is then multiplied by two.
This technique makes it possible to benefit from lower tax brackets, which reduces the overall tax burden. This is particularly true if one of the two spouses earns significantly less than the other.
It would be interesting to see how the income levels are.
Because historically one spouse or partner earns less than the other.
While this is currently off set for married couples – again, people are free to get married – this will significantly change.
Maybe one partner would like to work only 50 or 60% and just because the kid is in daycare does not mean they are there all the time. If they are sick one needs to get them.
Not all jobs accept „irregular“ working styles so one parent usually picks a job that is less „horrible“ for work life balance.
They get paid less so the other spouse earns more. But now this will be punished and the one that earns more will not get the tax advantage for the ENTIRE family anymore.
If they do the tax reform without seriously thinking about how to support families Lux will be an empty country with only singles living here for 5-8 years and then leaving. At least for the private sector.
This new reform will finally bring some fairness. Why do single people have to pay such a high amount of taxes? Why married people get so many advantages? And sometimes, singles are not single by choice. Btw I’m on class 2.
They just simply do whatever they want to do. How much percentage of Luxembourg tax payers haven’t got a say in this and many other public affairs when it comes to vote? If you call this democracy, then Putin is the best President who always looks out for the best of their people.
Luxembourger will do anything but make a serious pension reform….
You need to look at the big picture
>Around 85% of taxpayers will be very interested in joining this new tax bracket. Individualisation offers them a more advantageous tax situation.
3 in every 5 households are couples.
This means that for a large portion of couples, the individualization will be more advantageous than the benefit of being in a couple today.
Married people have to pay it back at the end of year anyway 🤷♂️
>The current model, with its “splitting” mechanism, which mainly favours married couples with a single income, is a legacy from the 1960s
So the goal of the current government is to destroy the family model where the father works and the mother stays at home with the children. That’s not the first change they did for this. Before they removed the benefits for mothers who took care of their children till age 3 instead of leaving them in creche – I don’t remember what was the name of it. Then they decreased the benefits for families with many children, made it the same for every child. They target traditional families with children.
At the same time, they advocate increasing the retirement age and welcome illegal immigrants or refugees, saying that, suddenly, locals don’t want to have children, and we don’t have any other choice.
wouldn’t this make the housing market even worse?
for example, a couple with a child that *need* to rent a 2 bedroom apartment, can afford it because of the tax class 2 benefit if only one of then is working, or if they have 2 income streams. Now if there is no difference in income between single and couples, then the demand on 2+ bedroom apartments will increase, no?
A bit old news, but interesting nevertheless.
Disclaimer: I am married and think the advantages for married people are very unfair, that said:
I believe the minister is wrong thinking that most married people will run to get into the new individualized tax, I at least, unless the advantage is massive, will think it twice before going that way. Even if many married people don’t benefit a lot, because they earn similar salaries and the current brackets make it so that they basically pay the same or very similar, the current system is a very good “insurance” if one of the two loses their job. And when you are 50+ you cannot expect to find another job straight away.
I think the move can be very risky and a lot of people could get a big hit in case they lose their job
15 comments
Rich people problem. See how singles are taxed and stop yelling
Long overdue.
People leaving the country? We’re nearly at 700k population and rapidly climbing to 1 million, so who is leaving?
I got married in Luxembourg this year and I REALLY enjoyed the married tax benefits, we got like an extra €3000 a month. It’s a shame they’re increasing it.
I mean let’s be honest why should a married couple pay less taxes than a couple who isn’t married?
The argument I hear often is that it promotes a financial incentive for people to have kids… But people who have kids get specific child tax credits, extra money for their children etc.
I find it utterly bizarre that he would say the advantage will be visible in case of a divorce.
I mean what kind of an argument is that?
Or that people don’t get married anymore today.
Well they CAN so if they chose not to why punish the ones who still want to get married?
Obviously it’s not the 60s anymore but couples also need to be able to give their child into daycare if we expect them to retun to work.
„So there are also advantages resulting from the reform?
Of course there are advantages. This applies, for example, in the event of a divorce. If this happens today, the tax class of the ex-spouse will change in the following years. This can sometimes be complicated to deal with. With individualisation, the tax system you are subject to remains the same before, during and after the marriage.
There could also be some changes. For example, a married couple where one spouse chooses to stay at home could be allowed to continue to pay contributions into the statutory pension system for that spouse. This would ensure that these years are taken into account when calculating the future pension.“
What does “splitting” mean?
Anyone who is married or partnered (tax class 2) currently has the right to being taxed under the so-called “splitting” procedure.
This means that the income of both spouses is added together and divided by two, with the tax rate being applied to half of the total income of the spouses. The resulting tax is then multiplied by two.
This technique makes it possible to benefit from lower tax brackets, which reduces the overall tax burden. This is particularly true if one of the two spouses earns significantly less than the other.
It would be interesting to see how the income levels are.
Because historically one spouse or partner earns less than the other.
While this is currently off set for married couples – again, people are free to get married – this will significantly change.
Maybe one partner would like to work only 50 or 60% and just because the kid is in daycare does not mean they are there all the time. If they are sick one needs to get them.
Not all jobs accept „irregular“ working styles so one parent usually picks a job that is less „horrible“ for work life balance.
They get paid less so the other spouse earns more. But now this will be punished and the one that earns more will not get the tax advantage for the ENTIRE family anymore.
If they do the tax reform without seriously thinking about how to support families Lux will be an empty country with only singles living here for 5-8 years and then leaving. At least for the private sector.
This new reform will finally bring some fairness. Why do single people have to pay such a high amount of taxes? Why married people get so many advantages? And sometimes, singles are not single by choice. Btw I’m on class 2.
They just simply do whatever they want to do. How much percentage of Luxembourg tax payers haven’t got a say in this and many other public affairs when it comes to vote? If you call this democracy, then Putin is the best President who always looks out for the best of their people.
Luxembourger will do anything but make a serious pension reform….
You need to look at the big picture
>Around 85% of taxpayers will be very interested in joining this new tax bracket. Individualisation offers them a more advantageous tax situation.
3 in every 5 households are couples.
This means that for a large portion of couples, the individualization will be more advantageous than the benefit of being in a couple today.
Married people have to pay it back at the end of year anyway 🤷♂️
>The current model, with its “splitting” mechanism, which mainly favours married couples with a single income, is a legacy from the 1960s
So the goal of the current government is to destroy the family model where the father works and the mother stays at home with the children. That’s not the first change they did for this. Before they removed the benefits for mothers who took care of their children till age 3 instead of leaving them in creche – I don’t remember what was the name of it. Then they decreased the benefits for families with many children, made it the same for every child. They target traditional families with children.
At the same time, they advocate increasing the retirement age and welcome illegal immigrants or refugees, saying that, suddenly, locals don’t want to have children, and we don’t have any other choice.
wouldn’t this make the housing market even worse?
for example, a couple with a child that *need* to rent a 2 bedroom apartment, can afford it because of the tax class 2 benefit if only one of then is working, or if they have 2 income streams. Now if there is no difference in income between single and couples, then the demand on 2+ bedroom apartments will increase, no?
A bit old news, but interesting nevertheless.
Disclaimer: I am married and think the advantages for married people are very unfair, that said:
I believe the minister is wrong thinking that most married people will run to get into the new individualized tax, I at least, unless the advantage is massive, will think it twice before going that way. Even if many married people don’t benefit a lot, because they earn similar salaries and the current brackets make it so that they basically pay the same or very similar, the current system is a very good “insurance” if one of the two loses their job. And when you are 50+ you cannot expect to find another job straight away.
I think the move can be very risky and a lot of people could get a big hit in case they lose their job
looking forward to lower it for single people 😆
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