Individuals should get more tax breaks

On February 28, the people will vote on the so-called marriage penalty. For some couples it is steep. Most of them, however, benefit from a marriage for tax purposes. We show what applies to which income.

Cohabitation or marriage? Very few couples make this decision based on taxes. However, depending on your income, getting married can have a significant impact on your tax bill. Take, for example, the rather rare case of a couple from Zurich, where both the partner and the partner earn 350,000 francs per year. If they marry, they will pay 8,000 francs more in taxes every year for that alone. Quite different if the partner also earns CHF 350,000, but the partner only earns 39,000. In this case, the couple saves 5400 francs a year thanks to the marriage.

And what about you? Are you punished or rewarded for getting married? Calculating this is not entirely trivial. But the Federal Tax Administration did it based on data from 2011. Both the federal government and the cantons of Zurich and Bern assure that the knowledge gained from this is still valid. We have graphed them here:

 

If you like your Gross income on the X-axis and that of your partner on the Y-axis, you can immediately see whether you are being fined (red) or rewarded (green) for getting married. The graphics of other cantons including the tax administration report can be found here. For various income levels, you can use the following interactive graphics to compare in which cantons the marriage and how it affects taxes. The income taxes of the canton, municipality and church are taken into account.

As a rule, the less a couple earns, the more likely a marriage will pay off - thanks to deductions and a cheaper married tariff. In the case of high incomes, on the other hand, the effect of progression dominates, since the incomes of married couples are added together. As a result, they have to be taxed at a higher rate.

A second basic rule is: the more different the incomes of both partners, the better they fare with the marriage. This is most extreme when only one earns. Then you should definitely get married. On the other hand, the more similar the wages of the two partners, the more likely a marriage penalty will be imposed. Viewed across the board, married couples usually get off better than cohabiting couples.

The marriage penalty, which the CVP wants to abolish with its popular initiative, is therefore much less common than the cohabitation penalty. Nevertheless, mostly only the marriage penalty is mentioned. As early as 1984, the Federal Supreme Court ruled that it was unconstitutional to incriminate married couples by more than 10 percent. The cantons have adapted their tax laws to this.

According to the tax administration's report, only the cantons of Aargau, Vaud and Valais violate the judicial requirement for certain incomes. As a result of the ruling, the federal government has also introduced new deductions and thus reduced the number of discriminated married couples by two thirds. With around 80,000 couples, however, the Swiss Confederation is still acting unconstitutionally - sometimes blatantly. If both partners earn 125,000 francs, for example, they have to pay over 80 percent more federal tax after marriage.

The marriage penalty in the canton of Zurich is less extreme than with the federal government. Compared to other cantons, however, it is relatively pronounced. If both spouses earn the same amount, they drive worse in Zurich than in a cohabiting relationship with a total income of CHF 90,000. In Bern, this is only the case from around CHF 200,000.

All of this applies to couples without children. The Federal Tax Administration only carried out the calculations for them, there Cohabiting couples with children are relatively rare. However, they are often doing very well in terms of taxation. On the one hand, cohabiting couples with children - for example in the canton of Zurich - benefit from the cheaper married tariff, which also applies to single-parent families. On the other hand, they are not subject to the effect of progression because the incomes of the two partners are not added. When starting a family, however, tax considerations are rarely in the foreground.

Few of them think about the consequences for the AHV when they get married - although the effects are considerable. After all, a married couple only receives an AHV pension of no more than 3525 francs per month. This corresponds to 150 percent of a maximum individual pension. A cohabiting couple, on the other hand, comes to 4700 francs with two maximum individual pensions. At first glance, this looks like a marriage penalty.

But a closer look shows that married couples do better at the AHV than cohabiting couples. If, for example, the partner dies, the surviving spouse has the prospect of a survivor's pension. She receives one if she has children at the time of the death of her husband or is at least 45 years old and has been married for five years. A cohabiting partner, on the other hand, goes away empty-handed. Married partners who earn nothing are also exempt from the obligation to pay AHV contributions. The only condition is that your spouse pays at least 960 francs per year. In the case of a cohabiting couple, on the other hand, both partners must make the necessary contributions in order to receive a maximum pension.

In total, the privileges of the married with the AHV amount to 2.8 billion francs annually - with savings of 2 billion due to the capped pension. The bottom line is that the cohabiting couples subsidize the married couple with CHF 800 million a year.

The married couple also have an advantage when it comes to inheriting. This is because spouses are exempt from inheritance tax in all cantons. In six cantons (GR, NW, OW, SZ, UR and ZG) this also applies to cohabiting couples. In all other cantons, the tax authorities reach the unmarried - often with the highest tariff.

If both partners don't earn a lot, getting married usually pays off. At least financially. Conclusion

Keywords: voting, marriage, taxes
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