Economie et Statistique / Economics and Statistics n° 526-527 - 2021Varia

Economie et Statistique / Economics and Statistics
Paru le : Paru le 07/10/2021
Guillaume Allègre, Hélène Périvier et Muriel Pucci
Economie et Statistique / Economics and Statistics - October 2021
Consulter

Taxation of Couples and Marital Status – Simulation of Three Reforms of the Marital Quotient in France

Guillaume Allègre, Hélène Périvier et Muriel Pucci

Economie et Statistique / Economics and Statistics

No 526-527

Paru le : 07/10/2021

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.

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Citation: Allègre, G., Périvier, H. & Pucci, M. (2021). Taxation of Couples and Marital Status – Simulation of Three Reforms of the Marital Quotient in France. Economie et Statistique / Economics and Statistics, 526-527, 3–20 (First published online: 30 March 2021). doi:10.24187/ecostat.2021.526d.2050