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Published: 31 Jan, 2019

Research from Umeå creates more gender equal taxes in Europe

NEWS In a recent vote, the European Parliament adopted a new policy urging Member States to reform their taxation systems to become more gender equal. The policy decision is largely based on research findings from Umeå University, Sweden.

Umeå researchers Åsa Gunnarsson and Ulrike Spangenberg, together with Margit Schratzenstaller, from the Austrian research institute WIFO, could in a recent research paper show how European taxation systems creates inequalities between men and women. Through own research and through an overview of the research field, the study gives a general view of gender aspects in taxation at Member State and EU level.

- Tax policies are expected to be neutral, treating men and women equally. But in reality, they are discriminatory, due to gender differences in wealth and income. One example is the increased interest in Europe to introduce income taxes that promotes a higher tax scale on labour income and a lower tax on capital income. As European women have a much smaller share of income from capital, the tax systems risk to accentuate income inequalities, says Åsa Gunnarsson, Professor in Tax Law at Umeå University.

The study has had an impact on the European Parliament to take action against gender discriminatory tax systems. The recently adopted policy puts pressure on the Member States to alter their systems into more gender equal alternatives.

Urging Member States to introduce individual taxation

One main point of the research study was to show what negative impact joint taxation has on encouraging women's employment and economic independence, and that individual taxation is crucial for the ambition to achieve tax fairness for women. Of the current EU Member States, only Sweden and Finland have fully individualised income tax systems.

- The European Commission consider it to be a great challenge for Europe to get women to work to a larger extent. This is an economic and labour market policy issue, but also an equality policy issue. Both our study as well as previous research shows that joint taxation obstructs the process of encouraging the secondary earner, which normally is the woman, to work more. In the new policy, the European Parliament urge all Member States to introduce progressively individual taxation systems, while ensuring that all financial and other benefits linked to parenthood in current joint taxation systems are fully preserved. Tax systems should no longer be based on the assumption that households pool and share their funds equally, and this is a great step towards economic independence for women in Europe, Åsa Gunnarsson continues.

To secure gender equal taxation systems, the EU Parliament has recommended that all Member States should carry out gender audits of fiscal policies, as well as regular impact assessments of these policies from a gender equality perspective.

Download the research paper Gender equality and taxation in the European Union
The paper was requested by the European Paraliament's Committee on Women's Rights and Gender Equality and commissioned by the Policy Department for Citizens Rights and Constitutional Affairs.

See the policy decision here

For more information, please contact:
Åsa Gunnarsson, Professor in Tax Law, Umeå University, Sweden
Phone: +46 90 786 5931
E-mail: asa.gunnarsson@umu.se