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Taxation of Couples and Marital Status – Simulation of Three Reforms of the Marital Quotient in France
[Imposition des couples et statut marital -Simulation de trois réformes du quotient conjugal en France]

Author

Listed:
  • Guillaume Allegre
  • Hélène Périvier
  • Muriel Pucci

    (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne)

Abstract

In France, married couples or couples in civil partnerships must declare their resources jointly and are allocated two tax unit. 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 euros, 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.

Suggested Citation

  • Guillaume Allegre & Hélène Périvier & Muriel Pucci, 2021. "Taxation of Couples and Marital Status – Simulation of Three Reforms of the Marital Quotient in France [Imposition des couples et statut marital -Simulation de trois réformes du quotient conjugal e," Post-Print halshs-03201795, HAL.
  • Handle: RePEc:hal:journl:halshs-03201795
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03201795
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    References listed on IDEAS

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    1. Thomas F. Crossley & Sung-Hee Jeon, 2007. "Joint Taxation and the Labour Supply of Married Women: Evidence from the Canadian Tax Reform of 1988," Fiscal Studies, Institute for Fiscal Studies, vol. 28(3), pages 343-365, September.
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    Cited by:

    1. Clément Carbonnier, 2021. "Family-Based Tax and Transfer System – Issues for Income Tax and Other Public Policies," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 526-527, pages 41-48.
    2. Mathias André & Antoine Sireyjol, 2021. "Redistributive Effects of the Taxation of Couples and Families: A Microsimulation Study of Income Tax," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 526-527, pages 21-39.

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    More about this item

    Keywords

    income tax; marital quotient; microsimulation; impôt sur le revenu; quotient conjugal;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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