Reform of marriage & family taxation – Part 3: Abolition of the marriage penalty, the initial situation

Marriage and family taxation underwent several reforms in recent years. Now, two more reforms are being discussed again. The first addresses the tax consideration of third-party child care costs, the latter the abolition of the marriage penalty. However, both are contentious. Findea explains these projects in a four-part series of articles. First, the respective initial situations are presented, before the changes and the criticism are introduced. This third article presents the initial situation against which the abolition of the marriage penalty is planned.

Initial situation

‍The marriage penalty describes the fact that under the same conditions, married couples sometimes pay more taxes than cohabiting couples. The Federal Court decided that if married couples pay 10% more taxes than cohabiting couples, this is unconstitutional. Immediate measures have been in place since 2008 to lift this state, but they only eliminate part of the marriage penalty. Since then, the Federal Council owes a constitutionally compliant solution. Therefore, the Federal Council proposed the "alternative tax calculation". However, this proposal was rejected in the spring of 2013, and the project was subsequently suspended on a provisional basis. On February 28, 2016, the popular initiative "For Marriage and Family - Against the Marriage Penalty" was narrowly rejected with 50.8% of the votes. Therefore, on August 31, 2016, the Federal Council decided to instruct the Federal Tax Administration to draft a proposal for the model "Multi-rate with alternative tax calculation". With this variant, Switzerland is taking its own path compared to Europe. Across Europe, the majority leans towards individual taxation for married couples. In 2016, the National Council also expressed majority support for the individual taxation model with the Motion 16.3006.

‍Private tax returns made easy – with Taxea.ch

‍You can easily create your private tax declaration using our tax app taxea. Learn more about taxea here www.taxea.ch