Marriage penalty Narrow majority in the National Council in favor of individual taxation

Switzerland has been fighting for individual taxation for 25 years. Now a fundamental decision has been made. On Wednesday, the National Council voted 98 to 93 in favor of individual taxation.

Keystone-SDA

26.09.2024, 09:09

SDA

Every person in Switzerland should submit their own tax return and pay their own taxes, regardless of their marital status. A narrow majority in the National Council is in favor of this. It approved a bill on individual taxation as an indirect counter-proposal to a popular initiative by the FDP Women.

In the National Council, the lines were clear from the outset and the votes were close. It backed the law on individual taxation by 98 votes to 93 with one abstention. The Federal Council had presented it on behalf of Parliament. The SP, FDP, Greens and GLP voted in favor. The SVP and the Center Party voted against.

No decision yet on the slogan

The law is the indirect counter-proposal to the tax justice initiative "for individual taxation regardless of marital status" submitted by the FDP women. The Council will not decide on the slogan until the parliamentary deliberations on the counter-proposal have been completed.

Five alternative concepts to the proposal were debated in the National Council. They were all rejected. The Council followed the proposal of the committee majority.

Currently, married couples and same-sex couples living in a registered partnership are taxed jointly in Switzerland. If both people are gainfully employed, they sometimes have to pay higher taxes than cohabiting couples with separate assessments due to progression.

The proponents of individual taxation in the National Council are not only hoping to abolish the marriage penalty. They also want second earners to take on more jobs in view of the shortage of skilled workers. Individual taxation should make married second earners, mostly women, more financially independent.

Marriage as an economic community

The minority wanted to maintain the understanding of marriage as an economic community. It also warned of the great effort involved in changing the system, both for the authorities and for taxpayers. This is because not only the federal government, but also the cantons and communes should tax individually.

The child deduction is to be increased from the current CHF 6,700 to CHF 12,000. The Federal Council expects the changeover to result in around one billion francs less in direct federal tax each year. The Left and the GLP wanted to limit these losses, but were unsuccessful.

Franziska Ryser (Greens/SG) wanted a reform without a reduction in revenue. The GLP wanted to limit the losses to a maximum of CHF 500 million. Katja Christ (GLP/BS) requested a correspondingly higher progression for ten years as a transitional solution. After that, the Federal Council's model should be adopted.

No inclusion of the daycare proposal

The SP, on the other hand, wanted to use the opportunity for a proposal to promote the potential workforce and genuine equality, as Cédric Wermuth (SP/AG) said. He called for childcare to be included in the bill: "Childcare outside the family will be much more decisive in promoting gainful employment." The SP minority motion did not stand a chance either.

The SVP and the center party wanted to maintain marriage as an economic community. "We are creating a system here that would solve a problem, but would introduce a new tax penalty for around 600,000 single-earner couples," said Leo Müller (center/LU).

The SVP unsuccessfully proposed a full and a partial splitting model with two minority motions. Both motions were rejected despite the support of the Center Party. The Center Party submitted its own initiative to abolish the marriage penalty.

The proposal by the Center Party to leave the implementation of the bill to the Federal Council was rejected. The majority wanted to give the cantons a transitional period of six years for implementation.

Criticism from the cantons

The bill now goes to the Council of States. The view of the cantons, which will have to change their tax assessment systems and prepare for around 1.7 million additional tax returns, is likely to play a greater role there than in the National Council.

During the consultation process, the Conference of Cantonal Finance Directors (FDK) criticized the bill. The marriage penalty had been corrected at cantonal level, it said. In addition, most cantons prefer the joint assessment of married couples. According to Finance Minister Karin Keller-Sutter, it is not clear how much the change will cost the cantons. The extent to which the cantons will have to adjust their rates and deductions remains to be seen.