Luxembourg has one of the between people living alone and couples who are married or in a registered partnership among OECD countries. And the country’s singles have more than once voiced their opposition to this policy.
A petition in 2019 reached 6,800 signatures, exceeding the 4,500 minimum required to prompt a debate in parliament with lawmakers and members of the government. The latter at the time had slated a tax reform for 2023.
“The introduction of a single fiscal table would avoid changes in tax class with which people are currently confronted in relation to their family situation (married, pacsed, divorced, deceased…),” finance minister (DP) said at the time.
However, the pandemic intervened, followed swiftly by the energy and cost-of-living crisis, which prompted massive government subsidy programmes, causing the state’s deficit and public debt to rise.
The government backtracked on its tax reform, promising some adjustments but no general overhaul.
A basic net salary calculator online shows that a gross wage of €5,000 per month results in a net salary of just under €3,600. For a person married without children, this rises to over €4,150. A single person with children receives €3,660.
Re-open the debate
A hopes to re-open the debate.
“A single person pays as much or more than a married couple. There is a form of injustice that deserves to be reconsidered and discussed again,” the petition author states, adding that inflation is causing an additional financial burden. “Reforming this tax to the equivalent of class 2 will allow class 1 to breathe a little.”
At the time of publication, the petition had reached 4,423 signatures with 39 days left to sign it.
Labour unions, the government and employer organisations are set to meet on Friday to discuss measures to ease the burden of inflation and the energy crisis on households. Forecaster Statec predicts three indexation payments, adjusting wages to inflation, this year.
However, the OGBL union has called for an adjustment of tax brackets with inflation as well to prevent this automatic adjustment being eaten up.
For a salary of €5,000 gross a month, the real increase in wages is 1.7% and not 2.5%, OGBL president Nora Back .
This came after finance minister (DP) had said her office would propose some tax relief for households after a better financial result for 2022 than expected for the state’s finances.
The OGBL called on the finance ministry to crunch the numbers and assess how much money is missing from people’s pockets because of the gap between indexation and taxation, demanding sustainable and retroactive relief.