Council of States recommends rejection of the Fairness Initiative on the marriage penalty

Erich Ettlin, a Mitte Party councilor from Obwalden, pointed out that the people have not yet been able to decide which model they prefer. He said: "The people have not been able to decide which model of taxation for married couples – joint or individual – they prefer, said Erich Ettlin from Obwalden, for example."

From the perspective of proponents, individual taxation creates new disadvantages, especially for traditional families with only one income. Mitte Party Chairman Philipp Matthias Bregy emphasized that while the people said yes to abolishing the marriage penalty, they did not say yes to a specific model: "The people said yes to abolishing the marriage penalty – but not to a model."

The FDP, whose initiative for individual taxation worked towards the March decision, defended the result of the popular vote. FDP councilor Martin Schmid from Graubünden said: "The people knew all the arguments. Even if a decision is not to my liking, I accept it." He spoke of an "intellectually interesting" tension between two popular decisions and added: "However, we should accept the popular decision from March. That is why I am voting no out of conviction."

Narrow recommendation to the cantons and the people

Should the Fairness Initiative be adopted, the Federal Council would have to introduce an alternative tax calculation for married couples within three years to eliminate the marriage penalty. However, this alternative calculation would only apply at the federal level, while individual taxation would come into effect in the cantons independently from 2032.

The Council of States warned of the legal incompatibility of both popular mandates. FDP councilor Andrea Caroni described a simultaneous yes to both initiatives as an "impossible situation." According to SP finance politician Eva Herzog, a popular decision cannot be "undone." She also pointed out that the cantons could provide for deductions for one-income married couples when implementing individual taxation.

GLP National Councilor Tiana Angelina Moser expressed surprise at the Mitte Party's initiative: "I am a little surprised by their clarity about what a family is in this country." She argued that individual taxation reflects the diversity of current family structures.

Scenarios in case of adoption and rejection

Both the National Council and the Federal Council reject the Fairness Initiative. The Mitte faction and the SVP, however, voted in favor in the Council of States. The initiative is expected to go to a popular vote in November.

The debate on abolishing the marriage penalty has occupied the Federal Palace for decades. With the combination of the Fairness Initiative and the already decided individual taxation, two popular mandates are now facing each other, which would fundamentally reorganize tax law.

Should the Fairness Initiative be rejected, the shift to individual taxation will be considered definitively decided. If adopted, Parliament would have to quickly repeal the Individual Taxation Act so that the cantons have clarity on whether they need to adjust their tax laws for 2032.

Reactions from the factions

Mitte councilor Pirmin Bischof argued that one cannot bring "both worlds" to a vote at the same time. The Mitte initiative creates no new discrimination and recognizes different life models, he said. Andrea Gmür-Schönenberger (Mitte/LU) explained that anyone who wants a change regarding the marriage penalty has no other choice but to vote in favor of the initiative.

Opponents of the Mitte Initiative conceded that the new individual taxation law might still require adjustments in individual points, such as child deductions. The discussion on this is likely to continue in view of the popular vote in November.