Possibility of increase in tax threshold

With cantonal finances currently looking not as bad as expected, the government has more room to manoeuvre when it comes to cutbacks. However, despite this, the tax threshold is likely to be increased, albeit for a temporary period only.

With the improved financial climate, the government has decided not to press ahead with a number of planned cutbacks in a number of areas. For example, in education, older teachers employed by the canton will still be able to benefit from a reduction in the number of lessons they teach without having their salary reduced accordingly. Furthermore, it has been decided private schools in the canton will still benefit from a subsidy. Reneging on these two cutbacks will mean CHF 1,365 million will still be spent in these areas. In the area of social affairs, some CHF 370,000 will still go to benefit families where a parent is unemployed. As to fiscal matters, it has been decided, for example, not to proceed with an amendment which would have led to the well-off paying an additional CHF 18 million into the cantonal coffers.

Nevertheless, through its “2020 Finances” project, the canton still aims to be able to eliminate any deficit by this year (2020). Without having to seek approval from the parliament, the government has been able to introduce no fewer than 385 measures, meaning savings of CHF 42 million, the target being a reduction of a further CHF 50 million. This is where the cantonal parliament will have a say on 24 other cost-cutting measures, one of which involves an increase in the tax threshold from 82% to 86% in the years 2020 and 2021, this latter measure alone bringing in CHF 32 million per year. Thereafter the government would look at the figures again and then consider whether this higher-level tax threshold should be maintained, lowered, or done away with completely.
 
In further reference to where any remaining cutbacks should be made, Heinz Tännler, the cantonal director of finance (photograph), said “it was not that a cube of sugar should be handed to all parties on the political spectrum, but that a bridge over which all involved would be able to walk”, and urged parliament to support this increase in the tax threshold “otherwise it would be tantamount to saying it had no interest in changing the current state of affairs”. Naturally, it was only to be expected that the parties on the Right were against any tax increases at all.
 
As to the finances for the current year, Tännler expressed his confidence that these would be positive.