Reform of marriage & family taxation - Part 4: Abolition of the marriage penalty, the initial situation

Marriage and family taxation underwent several reforms in recent years. Now, discussions are again held about two reforms. The first addresses the tax consideration of third-party childcare costs, the second the abolition of the marriage penalty. However, both are controversial. Findea explains these plans in a four-part series of articles. Firstly, the respective situations will be presented before introducing the changes and the criticism. This fourth article deals with the changes intended to abolish the marriage penalty. Furthermore, the criticism of these measures will be discussed.

Changes

‍Although the alternative tax calculation was heavily criticized and rejected in 2013, the Federal Council continues to adhere to this model. It stipulates that the tax authority should not only perform the ordinary tax calculation for married couples. Additionally, a second calculation should be made which is based on the taxation of unmarried couples. The lower of the two tax amounts should then be assessed. This would likely result in reduced tax revenues of one billion francs.

‍Criticism

‍ The Conference of Cantonal Finance Directors (FDK) has been highly critical of this approach. They argue that with this model, the marriage penalty is only incompletely lifted and new unconstitutional discrepancies arise. Further, it would complicate the tax system. Most importantly, it would result in additional expenditures for the cantons, for which they have no capacity. Whether this plan now has better chances than four years ago is therefore questionable.

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