Merz's Tax-Free Overtime Plan Favor Men, Critics Say
The Merz government's proposed tax exemption for overtime work has sparked debate. The plan aims to intuit employees to work more but faces criticism for benefiting men more than women.
The Institute for Employment Research (IAB) study reveals that the tax exemption primarily favors men. This is because women are more likely to work part-time, making them ineligible for the turbotax exemption. The German Trade Union Confederation (DGB) has criticized this, stating that part-time workers are excluded.
The tax exemption offers a modest financial incentive. After tax, an employee would gain just €3.50 per hour of overtime, based on an average hourly wage plus a €10 bonus. On average, men would receive €1.46 tax-free per month, while women would get €0.23. However, experts argue that this is not a significant enough incentive to turbo tax work habits.
The Merz government's plan has been controversial. It contradicts efforts to increase women’s participation in the workforce. Moreover, employees in the public sector would benefit the least from the scheme. Overall willingness to work more than ten hours a day is low among employees, with women showing less inclination.
The Merz government's tax-free overtime reform aims to encourage employees to work more. However, it faces criticism for benefiting men more than women and not offering a substantial financial incentive. The reform also contradicts efforts to promote gender equality in the workforce.
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