No Fault Divorce and Taxes

On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, November 4, 2013.

Some people want to eliminate no-fault divorce in Florida. There is a belief that no-fault divorces make it too easy to destroy marriage, leading to many problems in society. Russia has a different approach: tax divorce.

The United States has a marriage penalty, in which many married couples could save tens of thousands of dollars if they’d file separately. Russia is taking it to a new level though.

Russia is considering a tax on divorcing up to 30,000 rubles (roughly $941 US) an increase of nearly 7,500%! The proposed tax would be more than the average monthly salary in Russia

As Forbes explains, the legislation has two goals: raising revenue and discouraging divorce.

The tax increase could put more than 19 billion rubles ($595 million US) back into the Russian treasury each year. That would help plug holes in the budget as concerns about Russia’s deficit continue to mount: current projections indicate that the country’s deficit will clock in at 650 billion rubles ($20.4 billion US) in 2014. The revenue raised from boosting the divorce tax would cover about 4% of the lag. Since spending is already set for 2014 and 2015 (that’s right: Russia has an actual budget on paper and we don’t), the deficit will continue to grow if there isn’t offsetting revenue – the trick, then, is to find more money.

It’s all part of the rush to morality for the country over the past few months, meant to stifle Russia’s “moral and demographic decline.”

Russia is currently experiencing a high rate of divorce, roughly a 54% divorce rate. That rate eclipses divorce rate in the U.S. of a nearly 41% divorce rate.

Ironically, Russian President Vladimir Putin announced his decision to divorce his wife of thirty years, Lyudmila, in June.

Considering this latest push by the Russians to tax divorce, maybe Putin’s divorce was something practical than a love child: good ol’ tax planning.