Switzerland is witnessing a heated debate over proposed reforms to its federal taxation system that would end the so-called “marriage penalty,” a rule under which dual-income married couples are often taxed more heavily than unmarried couples.
Background and Reform Proposal
Earlier this summer, the Swiss parliament narrowly approved a bill to replace the current joint taxation model with a system of individual taxation, where each adult would be taxed separately regardless of marital status.
Under the existing system, the income of the second earner — usually the wife — is combined with the spouse’s income and taxed at a higher marginal rate. Critics argue that this discourages women from entering or remaining in the workforce and perpetuates traditional family roles.
Advocates of the reform say the changes would align Switzerland with most OECD countries, including the UK, Australia, and many EU states. Government estimates suggest the policy could bring an additional 60,000 people into the workforce and increase GDP by around 1 per cent, though it would also reduce tax revenues.
Opposition and Family Values Debate
A conservative alliance — comprising the right-wing Swiss People’s Party (SVP), the Centre Party, and evangelical groups — is mobilising to block the law through a national referendum. They argue that the reform disadvantages single-income families, undermines stay-at-home parenting, and would place a heavy administrative burden on tax authorities, who may have to process up to 1.7 million extra returns.
The dispute has highlighted broader questions about family models and state incentives. “The debate seems at first a very technical discussion over tax,” noted Thomas Hug, a tax partner at Deloitte. “But it reflects wide differences of opinion and very emotional beliefs on how the family must be organised.”
Historical Context
Switzerland only granted women the right to vote in 1971. While female participation in the labour force is high at 80.4 per cent — above the OECD average — only 60 per cent of Swiss women work full-time, compared with 78 per cent across the OECD. For men, the full-time rate is above 90 per cent.
The Swiss Supreme Court had ruled in 1984 that unequal tax treatment of married and unmarried couples was unconstitutional. Despite this, past reform efforts have failed, including a 2016 referendum that rejected similar changes.
Practical and Social Implications
The current taxation model has led to cases of “fake marriages” and even “tax divorces.” Some couples choose not to legally register their unions to avoid higher taxes, while others separate formally at retirement to reduce pension tax burdens.
Critics of the status quo argue that this system creates dilemmas for dual-income households. One couple reported an additional tax burden of up to SFr40,000 per year, leading them to abandon the idea of legal marriage.
Next Steps
The proposed law is likely to face a public vote. Even if opponents fail to gather the 50,000 signatures required for a referendum, cantonal finance committees in Solothurn and Aargau are preparing to invoke a constitutional mechanism allowing eight cantons to force a nationwide ballot.
Opponents also note that many cantons have already introduced measures to reduce the marriage penalty, such as second-earner deductions or partial income splitting. Supporters counter that only a federal reform can ensure fairness across the country.
Outlook
Supporters of the bill, such as National Council member Bettina Balmer, frame the reform as a matter of equality and modernisation. According to government figures, half of Swiss households would benefit from the changes, 36 per cent would see no difference, and 14 per cent would be worse off.
Balmer dismissed fears of added bureaucracy: “By this argument women shouldn’t have been given the vote.”
The outcome of the debate will not only shape Switzerland’s tax policy but also signal how the country balances economic efficiency with deeply rooted views on family life.
