Schwyz Canton conducts a vote on rejecting personal income taxation
In a significant development, the Swiss government council, led by Finance Director Herbert Huwiler (SVP), has announced its shared goal of abolishing the marriage penalty. This penalty, as it stands, results in a higher tax bill for couples when assessed jointly, compared to separate assessment.
The federal proposal, approved in June, is an indirect counter-proposal to the FDP Women's tax fairness initiative. However, the specifics of the tax changes under this proposal are not detailed in this paragraph.
The proposal aims to switch from couple to individual taxation, a move that, according to Huwiler, would result in a significant additional burden for couples. If implemented, the federal proposal would require couples to file two tax returns.
The cantons in the East and Central Switzerland that have not yet made a decision on the cantonal referendum to reach the required eight cantons include Uri (UR), Nidwalden (NW), and Appenzell Ausserrhoden (AR) where parliamentary decisions are still pending. The cantonal referendum has already been launched by six cantons: Wallis, Obwalden, St. Gallen, Thurgau, Appenzell Innerrhoden, and an unspecified seventh.
The switch from couple to individual taxation is intended to promote the equality of men and women, and individual taxation is also seen as a step towards a fairer tax system. However, the government council is accused of exaggerating the negative consequences of the cantonal referendum.
In the cantonal council of Schwyz, FDP, GLP, SP, and Greens were against the cantonal referendum. If couples are assessed separately, the Schwyz authorities would have to process an additional 35,000 tax returns. Today's taxation is based on an outdated family image, according to the opposition in the cantonal council of Schwyz.
Interestingly, the cantons themselves have already abolished the marriage penalty, according to Huwiler. The proposed federal solution significantly affects the cantons, requiring extensive rebuilding of their tax systems. However, the impacts of the proposal on the financial situation of the cantons are not mentioned in this paragraph.
The cantons must launch the cantonal referendum by eight cantons to occur. For the referendum to be successful, it would need approval from both the people and the cantons. This development promises to be a significant change in the Swiss tax system, and the outcome of the referendum will be closely watched.
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