One declaration per married couple? This should be over soon. In the federal law on individual taxation, the Federal Council is discussing two variants for married couples with only one main income or a small second income: In one case, married couples who would have to pay more taxes as a result of the reform would be relieved by a deduction of a maximum of 14,500 francs, not the others.
Support measures are also planned for taxpayers with children. The child allowance will be increased from the current CHF 6,500 to CHF 9,000 per child. A deduction of CHF 6,000 is planned for single persons and single parents, because, for example, households of at least two adults have lower housing costs.
Most should pay less
With individual taxation, the majority of people should be exempt from direct federal taxes – especially married couples with an even distribution of income and numerous retired couples. The Federal Council currently expects a drop in turnover of one billion Swiss francs. About CHF 800 million of this is attributable to the Confederation and about CHF 200 million to the cantons.
Under the plans of the Federal Council, individual taxation is planned at all levels of government. The cantons should therefore implement the reform at cantonal and municipal level. It is still unclear how this will affect the tax burden.
Up to 47,000 additional full-time jobs
The federal government expects positive employment effects, as it will become more attractive, especially for married second earners, to work more. The introduction of individual taxation at all levels of government could lead to 47,000 full-time jobs, the Federal Council writes.
Today, married couples and same-sex couples living in a registered partnership in Switzerland are taxed together. If both persons are employed, they must pay higher taxes due to the progression than cohabitants with two separate assessments.
As a result, many women reduce their paid employment or do without for tax reasons. The proponents of individual taxation are convinced that this was accompanied by career stoppages, financial dependence and poverty in old age. It is about equality between men and women in tax law and breaking through traditional role models.
Marriage penalty is unconstitutional
Individual taxes and the abolition of the marriage penalty have been political concerns for years. As early as 1984, the Federal Supreme Court ruled that tax discrimination against married and registered couples as compared to cohabiting couples was unconstitutional.
In 2016, voters narrowly rejected the popular initiative of the then CVP “For marriage and family – against the marriage penalty”. Because the federal government had presented false numbers, the federal court later ruled that the vote should be overturned.
The now proposed individual taxation law should be seen as an indirect counter-proposal to the FDP initiative for tax justice for women. The Bundesrat recommends rejecting the initiative because the legislative work is well advanced. Cantons, political parties and organizations have until March 16, 2023 to respond to the draft. (SDA/sf)