Merkel's party divided on gay couple tax law

Chancellor Angela Merkel faces a dilemma over tax perks for gay couples at today’s conference of her ruling Christian Democratic Union (CDU).

Delegates in Hanover are set to re-elect her as leader for a 13th year, but the German leader is caught between the progressive and conservative fronts in a proxy war.

The progressives want to extend to German gay couples tax perks reserved for married heterosexual couples. Of particular interest is the tax-saving “spousal split” rule, whereby a couple’s earnings are pooled and divided in two to calculate each spouse’s taxable income. A dozen CDU progressives, backed by many younger leaders in the party, believe extending this right to gay couples in registered partnerships would help reverse a collapse in CDU support in urban areas.

Christian traditions

But their progressive proposal has attracted the ire of CDU conservatives, dismayed for years by Dr Merkel’s push to the political centre. This, they complain, has sacrificed the CDU’s conservative identity and Christian traditions.

In retaliation, the conservatives have drafted an alternative motion expressing “respect for those who realise their lives in a different form of partnership”. They speak out against intolerance and discrimination, but demand a retention of tax privileges for married couples.

Aware that a change might be the final straw for her long-suffering conservatives, Dr Merkel has come out in favour of preserving the status quo on fiscal privileges.

Avoid blow-up

The German leader is anxious for a show of unity rather than a blow-up at the last party conference before the 2013 general election. However she knows a constitutional court ruling on these tax perks is coming possibly next year.

The German constitution guarantees “particular protection of the state” to family and marriage. But in recent rulings the court used another constitutional right – equality before the law – to close several gaps left between Germany’s 2001 same-sex partnership Bill and marriage.

The court struck out allowance privileges for heterosexual civil servants over gay colleagues and overturned pension tax laws that distinguished between gay and married couples. The court said it could not see how marriage would be downgraded by extending fiscal privileges to those in other kinds of committed relationships. It also questioned fiscal privileges for married couples without children.

Thomas de Maiziere, federal defence minister and a Merkel confidant, conceded the existing tax system was unlikely to survive the court ruling.