The long overdue abolition of the marriage penalty

"The (long overdue) abolition of the marriage penalty" - since the referendum of 28 February 2016, this expression is known to everyone. Its popularity has not suffered any decline since the lost vote and has been on everyone's lips again, especially since 10 April 2019.

The reason for this is the very first approval of a voting complaint by the Federal Supreme Court . In this article we pursue the question of whether the name «marriage penalty» is at all justified (marriage should not actually be a punishment) and what exactly the aim of the 2016 initiative was or is.

A topic for more than 30 years

As early as 1984, the highest court in this country declared that there was an inequality in the taxation of married couples compared to unmarried persons and described this inequality as a "marriage penalty". However, the judges in Lausanne have no authority to repeal a federal regulation on the basis of Article 190 of the Federal Constitution, and so the situation criticised by the Federal Supreme Court has remained in force until today. After more than 30 years, the Christian People's Party of Switzerland (CVP) dared to launch a parliamentary initiative for the abolition of this marriage penalty. But what exactly is meant by this expression "marriage penalty"?

The term "marriage penalty" was established by politicians to draw attention to the disadvantage of married couples and registered partners compared to cohabiting partners. However, there is no marriage penalty in the narrower sense. Just because a marriage is entered into does not result in a direct punishment or disadvantage of the spouses. The expression means two things. On the one hand, it is objected that the OASI pensions of married couples together may only amount to 150% (capping), which results in less pension credit for a married couple in contrast to an unmarried couple.

On the other hand, there is a legally unequal aggregation of income in the area of taxes. Based on Art. 9 of the Federal Law on Direct Federal Tax (DBG), this aggregation has a negative (increasing) effect on the progression and thus on the resulting higher percentage tax amount (than before the marriage) in the context of the tax assessment. This mainly affects double-earning spouses with an increased tax burden. The double-earner deduction for married couples introduced for this reason in 2008 reduces the unequal treatment, but does not make it disappear completely.

The CVP launches the initiative

On 5 November 2012, the CVP submitted the above-mentioned initiative "For marriage and family - against the marriage penalty" to the Federal Chancellery. The core of the initiative was the taxation of married couples as an economic community. In addition, married couples were to be treated equally to cohabiting couples in the determination of their AHV pensions (and thus enjoy two full individual pensions each). The CVP lived up to its party name with a third and final demand of the initiative: the establishment of marriage as a "permanent partnership between a man and a woman" in the Federal Constitution. Such a standardisation of marriage as a partnership between a man and a woman is currently in line with general practice in Switzerland, but at the same time it moves us further away from opening up marriage to homosexual couples.

In the context of the Federal Council's recommendations in the referendum booklet and the media releases, the Federal Council and the parliament rejected the bill with the following arguments: (1) enough measures had already been taken to mitigate the unequal tax treatment with a wide variety of deductions; (2) only 80,000 dual-earner couples with a higher income (from CHF 80,000 income without children and from CHF 120,000 with children) were affected by the unequal treatment; (3) within the framework of the pension restriction to 150% for married couples (capping), married couples would nevertheless benefit from a wide range of advantages over their entire lifetime, such as widows' and widowers' pensions, the widowers' supplement in AHV and IV as well as reduced contributions in accident insurance, military insurance and occupational benefits. If married couples were now awarded a full pension, this would result in an imbalance at the expense of cohabiting couples - not to mention the additional burden on the AHV of CHF 2 billion.

Overall, the Federal Council agreed with the tax aspect of the initiative text, but felt that the planned changes in social security law were obsolete. Parliament also identified with the need to adjust the taxation of married couples, which has been pending for 30 years. The main point of the parliament's displeasure, however, was another: the standardisation of marriage as a partnership between a man and a woman in the Federal Constitution was too much of a good thing. In the opinion of the parliamentarians, such a stipulation in the Federal Constitution would make the currently discussed opening of marriage for same-sex couples even more remote. This adherence to the outdated concept was rejected. The Federal Assembly felt the same way about the formulation of the taxation of married couples as an economic community: individual taxation as a possible solution to unequal treatment would thus be swept off the table.

Finally, the deadline came on 28 February 2016. With 50.8 % of the vote, the bill was rejected by the people, but supported by the cantons. In the Federal Council's subsequent media conference, it explained the following: The obligation of the Confederation to abolish the unequal taxation of married couples compared to cohabiting couples, which was declared by the Federal Supreme Court 30 years ago, was still an issue to be resolved.

A severe calculation error

Based on the media conference that took place after the vote, the Federal Council decided in spring 2018 with the dispatch of 21 March 2018 to amend the taxation of married couples and thus (partially) abolish the so-called "marriage penalty". Annual revenue shortfalls of CHF 1.15 billion would be the consequence of the abolition. The much-discussed individual taxation was not included in the dispatch due to delimitation difficulties, but a double calculation method was. In the first step, the procedure is the same as before, in which the incomes of the spouses are added together. In a second step, the same ratios are calculated in the same way as for cohabiting couples. The more favourable variant is charged to the spouses as an assessment.

However, this good Swiss legislative process was suddenly shaken by bad news from the Federal Council on 15 June 2018. The Federal Council informed the electorate that an error had crept into the Federal Council's information in the voting booklet of 28 February 2016. Not only 80,000 dual-earner couples (as mentioned in the referendum booklet), but 454,000 married couples are affected by the currently applicable unlawful taxation. Two-earner couples with children were forgotten in the calculations of the referendum booklet. The Federal Tax Administration, commissioned by the Federal Council, made a serious miscalculation. Federal Councillor Ueli Maurer then initiated an external investigation. The legislative process for abolition was temporarily suspended.

The result of this external investigation names a calculation error as the cause and shows a questionable, even sobering picture. The Federal Tax Administration's offsetting is not an isolated case - the authority generally receives too little data. According to the expert, the Federal Tax Administration is not fully able to fulfil its political mandate with the data available today.

Based on these findings and the fact that the outcome of the referendum was extremely close, the CVP lodged an appeal with the Federal Supreme Court in June 2018. This is not the first time that the judges in Lausanne have had to judge political issues as a legal authority. Already in the vote on the CTR II, the court had to rule on the consequences of incorrect forecasts of tax losses. Forecasts - which by their very nature are already fraught with uncertainty - have so far mainly led to the denial of a repeat vote in the verdict of Switzerland's highest court.

The bar for approving a repeat of the ballot is extremely high. Declarations of invalidity presuppose that the defects discovered are of a considerable nature and could have actually affected the results of the vote. Legal certainty must also not be disregarded. Particularly in the case of the referendum complaint on the CTR II, a repetition was dispensed with for reasons of legal certainty, especially since economic actors had already made various dispositions on the basis of the Yes decision, which could only have been reversed with disproportionate effort in retrospect. It is obvious that today's case is different: On the one hand, the proposal was rejected at the ballot box - the legal situation is still unchanged. On the other hand, at the time, the CTR II was about forecasts, but with the "marriage penalty" it was about essential, effective (numerical) information.

The groundbreaking verdict- the story continues

7.5 years after the vote, the drumbeat. The judges in Lausanne declared the vote on the marriage penalty invalid by 4 votes to 1. The ruling of April 10, 2019 sets a precedent in the history of voting in Switzerland. According to Switzerland's highest court, the freedom to vote within the meaning of Art. 34 para. 2 of the Federal Constitution, including the requirement of transparency for voters, had been violated. The four judges who agreed concluded that the violations were capable of influencing the very close result of the vote. The seriousness of the irregularity due to the striking difference between the figures is an important factor here.

The story continues - just how?

What are the consequences of this decision from Lausanne? The Federal Supreme Court ruled that the vote was invalid and annulled it. The Federal Council was then required to decide what to do with the initiative or vote. In principle, there are two options in this case: On the one hand, the Federal Council can submit the referendum bill for parliamentary deliberation again, or it can immediately schedule a new vote with the same initiative text. In principle, both options have a real chance of the "marriage penalty" being abolished for good. In the first option, however, there would also be the possibility of finally deleting the hotly debated and controversial paragraph in the initiative text, which establishes marriage as a cohabitation between a man and a woman, which may promise a better chance of success in a new vote on the bill and, with the removal of an old societal braid, would not establish a new societal "division" with the narrow definition of marriage in the constitution. Shortly after the Federal Supreme Court ruling was published, the Federal Council was inclined to give preference to the latter option and put the proposal directly to the people. However, this was not to the CVP's liking, as the initiators are aware of the problems with the controversial definition of marriage. Thanks to lobbying, the Christian People's Party succeeded at the end of June when the Federal Council announced its decision to send the initiative back to parliament for discussion. To this end, the Federal Council issued a supplementary dispatch to Parliament in August 2019 ahead of the 2019 fall session. The reason for this decision by the executive is that another bill to abolish the marriage penalty is currently pending in parliament. This pending bill could, if Parliament so wishes, be developed into an indirect counter-proposal to the CVP initiative.

See also the article in the Aargauerzeitung from 22 June 2019

The decisive autumn session 2019

At least the Council of States gave the Federal Council a first damper on this issue in its first session in the 2019 autumn session and decided to reject the proposal by 25 to 18 votes for the submission of new proposals. It remains to be seen what the position of the National Council and the final verdict of the Council of States will be. By 27 September 2020 at the latest, however, the people will be confronted with a new vote - regardless of the precise content.


It is obvious that the last word has not yet been spoken in the matter of the "marriage penalty". A change in the tax treatment of married couples compared to cohabiting couples will come in the future. Be it with a new vote and its approval or by means of an independent amendment to the law by parliament. In all scenarios, however, we can only hope for a balanced solution that is fair for both married and cohabiting couples. Either way, however, it is clear that a referendum can never be repeated one-to-one. In view of the approved appeal, it remains to be seen how parliament will continue to debate the proposal and whether a counter-proposal will be sent to the ballot box. If parliament nevertheless decides in favour of an identical vote on the bill, the people would again be confronted with the three-layer initiative (taxes, Social Security and the concept of marriage). It would then become clear whether the people rejected the 2016 proposal with a view to the tax aspects or primarily, like the parliament, because of the controversial and narrow definition of marriage, which can be equated with a questionable exclusion of same-sex couples from marriage.

However, the Federal Supreme Court's decision of April 10, 2019 is to be welcomed and is correct from a legal perspective. In a sensitive matter, it has given priority to unhindered democratic decision-making over the usual restraint based on the separation of powers.