Just in time for “Tax Day,” we have a posting on . . . taxation! How original! Today we are taking on the so-called “marriage penalty” that kicks in when people get hitched, specifically, what has been going on in Switzerland. It hasn’t been getting a lot of (or any) play on this side of the pond, but the Swiss are “equalizing” what people have become accustomed to calling “genders.”
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| "How fat am I?" |
Editorial/grammatical comment: evidently using the word “sexes” these days is somehow inappropriate; we no longer have females and males (sexes) but feminines, masculines, neuters, and whatever else something thinks up (genders). And what about referring to a single individual as “they”? As Gabriel Iglesias said when someone asked if he would prefer to be referred to as “they”: “Just how fat am I?!?!?”
Anyway, the Swiss have decided to get rid of the “wedding” or “marriage” penalty which can result in married couples paying thousands of francs (CHF — not the euro) more in taxes. Beginning in 2032, everyone will be taxed as an individual, regardless of marital status. As described in an article in The Financial Times,
[G]overnment estimates suggest the reform could add 60,000 people to the workforce and lift GDP by about 1 percent, even though it would reduce tax revenue.
There are objections, of course. Single-income households could face higher bills and administrative complexity might rise. And there is a residual suspicion of reforms that seem to import foreign norms into a system that prides itself on independence. (“The Price of Marriage in Switzerland” by Mercedes Ruehl, Outlook Europe, The Financial Times, 04/14/26, p. 18.)
Of course, you doubtless noticed all the shoulda-coulda-wouldas in this quote. The change could add people to the workforce, single-income households could face higher [tax?] bills, and administrative complexity might rise. All very frightening, no doubt, but that is still no excuse for continuing to impose a “marriage penalty” at a time when marriage and fertility rates in the CH are falling. As AI responded to the query, “Is the marriage rate in Switzerland declining?” —
Yes, the marriage rate in Switzerland is declining. In 2024, there were 36,800 marriages, marking a 2.6% drop from 2023 and reaching the lowest level since 1981, excluding pandemic years. Marriage is increasingly seen as only one of many relationship models, and formal weddings are losing popularity alongside a plummeting birth rate. (Google Search’s “Gemini large language model”)
This, despite residual hysteria from the peak of the “ZPG” (Zero Population Growth) movement in the early 1970s, is not what many people would call a Good Thing. If Switzerland (or any other country) is trying to encourage people to get married and have children, penalizing them for doing so may not be the best way to go.
Further, although we see merit in taxing people individually rather than as a couple if the latter means an increased tax burden, there is another aspect to consider: that increased burden on single-income households and the loss of the increased exemption. There is, however, a simple solution, although it might not be particularly easy: adopt the Economic Democracy Act (EDA).
The reasoning is simple. There is a very strong “pro-family” orientation in the proposed tax and monetary reforms of the EDA, although that was not really the intent. This is because among the proposed reforms is an innovation which we believe to be unique: allow families to aggregate income and exemptions for tax purposes and — to that extent — be “taxed as a family” instead of as a group of individuals.
For example, let us assume Country X has a “marriage penalty” in its tax code, where individual non-dependents are allowed to exempt 10,000 pazoozas of income from taxation, but a typical married couple with two children is only allowed to exempt 15,000 pazoozas of income if filing jointly. Their two children don’t get any exemption at all if they don’t work for pay, and only a 2,000 pazooza deduction for each child as a dependent.
That means the couple can deduct or exempt 19,000 pazoozas from aggregate income, where if they were not married and had no children, they would get deductions and exemptions of 20,000 pazoozas — and not have child-rearing expenses. That’s a pretty strong argument against getting married and having children.
But what if families could aggregate income, exemptions, and deductions for tax purposes, and the exemptions were enough to live on, say, 50,000 pazoozas for non-dependents and 25,000 pazoozas for dependents? That would mean an aggregate exemption from income of 150,000 pazoozas for the family as a whole, whether they have income or not. Adding a flat rate tax determined by an accepted budget and the country’s tax system for individuals would be greatly simplified and far more just.
If the annual median family income for Country X was 150,000 pazoozas, maybe half the country would pay no tax — and the country would save enormous amounts of time and money by not having to redistribute or rebate by taxing people who couldn’t afford it in the first place, which necessitates government having to give it back after taking it away.
That, frankly, was the original idea behind the income tax in the United States. It was never intended that most people would pay any income tax at all. The original exemption was set far above the median income. According to AI (Google Search’s “Gemini large language model”),
In 1913, the average annual wage for employees in industry, trade, and transportation was approximately $1,083. While a specific median income figure from that year is not widely cited in government data, the average income for most U.S. workers was often estimated to be under $1,000, with many earning between $200 and $400, while a typical professional salary might be around $2,000–$5,000.
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| The income tax was a populist triumph |
And the exemption? Asking AI again, this was the answer:
In 1913, the first permanent federal income tax authorized by the 16th Amendment provided a generous personal exemption of $3,000 for single individuals and $4,000 for married couples. These exemptions . . . meant less than 1% of the population paid income tax, which began at a 1% rate.
We should perhaps consider the wisdom of the EDA for reform of the tax system . . . among other things.
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