Red squirrel characters have a history in the public information game. Older UK readers may recall Tufty, who taught children about road safety in the 1970s. His chum, Willy Weasel, regularly got knocked down by passing cars but clever Tufty always remembered to look both ways.

Now comes Savvy Squirrel, who, with backing from the chancellor and a multi-year lump of advertising spend from the financial services industry, will try “to drive a step-change in how investing is understood, discussed and adopted”, as the blurb puts it. In translation: don’t squirrel everything away in a boring cash Isa but try taking an investment risk or two if you value your long-term financial health.

As with preventing road traffic accidents, the cause is noble. Every study on long-term financial returns reaches the same conclusion: inflation is the investor’s enemy and there is a cost to holding cash for long periods.

One statistical bible is the Equity Gilt Study published by Barclays, and a few numbers demonstrate the point. From 2004 to 2024, cash generated a return of minus 40.5% in real terms (meaning after inflation and including interest paid). By contrast, a conventional diversified portfolio comprising 60% UK equities and 40% gilts increased by 21.6% in real terms. A missed opportunity of 62.1 percentage points is enormous

Rachel Reeves’s interest in promoting the virtues of investment lies not only in helping savers but in greasing the wheels of the capital markets. Fair enough: a healthy economy needs a healthy stock market, including one that makes it easy for retail investors to participate. It is slightly ridiculous that the colossal sum of £610bn is estimated to be sitting in cash savings in the UK; it can’t all be rainy-day money or cash parked awaiting a house purchase.

Many Americans famously follow the stock markets closely and discuss their 401(k) pensions savings plans but, even by European standards, the UK’s retail investment culture lags. Sweden has popularised investment with tax-breaks and other changes. Even supposedly cautious Germans are less inhibited. So, yes, one can applaud the ambition behind the campaign.

But here’s the doubt: it all feels terribly tame.

One can imagine an alternative launch in which Reeves tried to create a buzz by cutting stamp duty on share purchases. There are good reasons to adopt that policy anyway, as argued here many times, but a cut now would grab attention. True, rules for banks and investment firms on giving “targeted guidance” are being loosened to allow more useful advice alongside the “capital at risk” warnings. Yet the current news flow in Isa-land is about HMRC’s pernickety interpretation of the tax treatment of cash held within stocks and shares account. That just creates bad vibes in the wings.

Meanwhile, the campaign’s goals read as wishy-washy. It’s all about “helping people build confidence over time”, apparently. Well, OK, that’s what the market research suggests, but “creating more opportunities for everyday conversations” is limp when, in the outside world, teenagers are trading crypto on their phones and the world is awash with smart apps. The intended audience can surely handle more directness.

As for the squirrel, it may get lost in the forest of meerkats and other CGI creatures deployed by financial services firms. For a campaign that is supposed to be doing something distinctly different, why go with a character which, on first glance, looks generic?

Back in the pre-smartphone 1970s, there was a certain shock value for the average five-year-old in seeing Willie Weasel lying injured in the road. At least the message about bad consequences was clear and memorable. One wishes the Savvy campaign well, but one fears a conversational squirrel may struggle to be heard.

Last weekend, several thousand people took to the streets in Munich to demonstrate against abortion and assisted suicide. One speaker made an extremely dramatic plea against what he called the “culture of death” that has allegedly taken hold in Germany. One sign of this, the speaker argued, was that the government is planning to abolish a regulation known as “spousal tax splitting.”

Is tax law really relevant to deep philosophical debates on the sanctity of life? It is even a matter of life and death at all? Surely we needn’t go that far? In any case, the intense political uproar surrounding the new debate on whether to abolish spousal tax splitting is notable, even by today’s standards of populist outrage.

An advantage for couples with widely divergent incomes

The row was sparked by Germany’s vice chancellor and finance minister, Lars Klingbeil, of the center-left Social Democratic Party (SPD), who said he wanted to abolish and replace the joint taxation of spouses’ income, a system that has been in place since 1958.

How exactly does spousal tax splitting work? In Germany, married couples (and since 2013, couples in civil partnerships), can choose to have their income assessed jointly by the tax authorities.

It means that the taxable income for both spouses together is halved – as if both partners had each earned an equal half of the income. Their tax liability is then determined by simply doubling the income tax due on one half.

As people who earn more pay higher taxes in Germany, this system benefits couples where one partner (and often this is still the man) earns significantly more than the other (in practice often the woman).

Costs of up to €25 billion per year

If for example one partner earns €60,000 ($70,512) a year and the other partner earns nothing, the couple will be taxed as if they earned €30,000 each. In this example, the couple would save nearly €5,800 in taxes per year compared to the amount they would owe if both partners filed their taxes separately. According to the Finance Ministry, spousal tax splitting costs the government a total of up to €25 billion annually.

Some critics have long viewed splitting as a tool to keep women out of the labor market, because the more a woman earns, the larger her tax burden becomes. Klingbeil seems to agree, arguing on ARD television in late March that the system was “out of step with the times.” The spousal splitting system reflects “a view of women and families that is completely at odds with my own,” he said.

Chancellor Merz said to be in favor of splitting

On Monday of this week, Klingbeil got some surprising support on this from Johannes Winkel, head of the youth wing of the conservative Christian Democratic Union (CDU).

“Given the demographic reality, the government should create incentives to ensure that both partners in a relationship are employed,” Winkel told the Funke Media Group. “In the future, tax relief should primarily be granted to married couples when they are facing hardships related to raising children.”

But the chancellor is a vocal skeptic of the proposal. “I am not convinced by the claim that joint filing for married couples discourages women from working,” Friedrich Merz said at a conference organized by the Frankfurter Allgemeine Zeitung newspaper. “Marriage is a relationship based on shared income and mutual support. And in a marriage, income must be treated as a joint income for tax purposes, not separately.”

Klingbeil’s alternative plan

At around 74%, the labor force participation rate for women in Germany is one of the highest in Europe, but half of them work part-time.

Klingbeil’s idea is to replace the existing system with a more flexible approach: Both partners would be able to distribute tax-free income among themselves in such a way that it minimizes their tax liability. This would allow the couple to continue enjoying a tax advantage, albeit not to the same extent as before. And whether one partner earns more than the other would become less important.

However, it remains to be seen whether Klingbeil will be able to push through his proposal. Aside from Germany, similar regulations offering tax benefits to couples exist in Poland, Luxembourg, Portugal and France.

This article was originally written in German.

The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.

Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.

In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.

But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”

“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.

But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”

The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .

Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”

The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.

“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.

The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.

The office was created in 2014 to provide Council members with expert advice on fiscal issues.

For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.

Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.

Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.

The office was further required to produce activity reports quarterly, not just annually.

Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.

Two years ago, a bizarre standoff developed in the office.

Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.

The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.

“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.

Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.

Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.