Fighting over tax breaks and family role models

Staying at home with the children or working outside the household? Family role models are once again in the public focus Keystone

A proposal by the rightwing Swiss People’s Party to grant tax breaks for families that do not use daycare facilities is facing opposition from political parties, the business community and women’s groups. The issue comes to a nationwide vote on November 24.

This content was published on October 9, 2013 minutes

The promoters of a fiscal reduction for stay-at-home parents say their initiative is aimed at doing away with a discriminatory tax system and putting all families on par.

No specific amount is mentioned in the initiative text. Current regulations covering childcare allow an annual reduction of CHF10,000 ($11,094) per child from the taxable income.

“Those who do not need a place for their children in a nursery do not create additional costs for the state. They even pay more taxes because they cannot claim a discount for out-of family daycare services,” says senator Hannes Germann.

His People’s Party colleague, Verena Herzog, who took up a seat in the House of Representatives in March, says the initiative seeks to address a serious issue for a society which can no longer rely on traditional family values.

“Teachers and apprentice masters often have to take the role of parents, which puts an additional burden on their shoulders,” Herzog says.

She insists there is nothing wrong in women with professional diplomas or an academic education staying at home to look after their children. Instead mothers could consider the option of returning to their jobs once the children are older.

Herzog also warns of too much stress for mothers who try to combine work and family life.

“It is important to have a broad public discussion on the issue at stake and we hope to convince voters of our ideas,” she says.

Family matters

The initiative by the rightwing Swiss People’s Party is one of three proposals designed to ease the tax burdens of families.

The centre-right Christian Democrats collected enough signatures for two proposals: one to make the child allowance tax free and the other to boost the tax status of married couples.

In March 2013, voters narrowly rejected a constitutional amendment to improve conditions for parents wishing to combine work and family. The parliament-sponsored proposal was aimed at increasing childcare options, including nurseries.

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Old role models

However, support from other political parties and the business community appears to be rather limited.

The political centre-left and a number of members of the centre-right have come out against the initiative.

A women’s committee from across most of the political spectrum describes the conservative proposal as a step backwards in history.

“The People’s Party wants to set in stone the family role model of the past century with a housewife and a man as the breadwinner,” the women’s alliance group says.

The committee is concerned that the initiative will make life harder for those families which rely on nurseries and other daycare facilities.

The key players of the business community, the Association of Small- and Medium-sized Enterprises and Economiesuisse, the Swiss Business Federation have also come out against it.

“The initiative concerns the compatibility of job and family. It discourages households from seeking two incomes,” says Roberto Colonello, deputy spokesman for Economiesuisse.

The potential of the person who stays at home would not be used, despite a costly investment into his or her professional training and a shortage of experts on the job market, he adds.

Hans-Ulrich Bigler, director of the SME umbrella group, for his part argues that approval of the initiative would lead to an important drop in revenue for the state. The shortfall is estimated at CHF390 million annually.

Ballot box issues

Besides the proposals to grant tax breaks for families raising their children at home there are two other issues at stake.

One is an initiative by the young Socialists to reduce salary gaps within a company, capping top wages at 12 times the lowest salary.

Also on the ballot sheet is a proposal to throw out a parliamentary decision to increase the annual fee for the use of Swiss motorways, also referred to as “vignette” car stickers.

Numerous votes and elections are also scheduled at a cantonal and local level on November 24.

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Taxing logic

Opponents also point out that the initiative is incompatible with the present Swiss tax system.

“It is as if people who work at home and cannot benefit from an official tax discount for commuters were to claim a special tax break,” says Lucrezia Meier-Schatz, director of the Pro Familia organisation.

The lobby group warns that approval of the initiative would inevitably result in discrimination against certain families, saying single-income families needed other forms of tax benefits.

Meier-Schatz, a parliamentarian for the centre-right Christian Democrats, makes no bones about her anger over the stance of her party.

The Christian Democratic leadership and a majority of the parliamentary group has come out in favour of the initiative, despite initial opposition. However, four weeks ahead of the vote, the party rank and file eventually came out against, defying the top brass. 

The Christian Democrats which champion family issues have collected enough signatures for plans of their own to alleviate the tax burden for married couples and for a tax-free child allowance and education benefits.

The proposals are still to be discussed in parliament before the government sets a date for a nationwide vote.

Unfair advantage

For its part, the government calls for a rejection of the latest People’s Party initiative, saying approval would again give unfair advantage to families that favour a traditional family model.

A legal amendment in 2011 scrapped a preferential tax status for families that do not rely on childcare facilities.

During a parliamentary debate earlier this year, Finance Minister Eveline Widmer-Schlumpf argued that going back to the old tax rules was tantamount to boosting one family model over the other.

“There are many families who do not have a choice whether to live on the income of one or two parents. They need both parents to work because they would not be able to make ends meet,” she told the House of Representatives.

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