Who benefits from the tax allowance for education, upbringing and training?
The current short expert report commissioned by the AWO Bundesverband e.V. sheds light on the distributional effects of the tax allowances for children. In particular, the allowance for care, education and training costs (BEA) currently favours high-income households more than low-income families. The study analyses how halving the CEA or reducing it to 300 euros would affect different groups of households.
The results show that up to 3.48 billion euros could be freed up by reducing the BEA allowance. These funds could be used to provide targeted support to low-income families, thereby reducing the regressive distribution in favour of wealthy households. The study is an important contribution to the debate on fairer tax relief for families with children.
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