Vaud State Council presents plan to strengthen purchasing power
Published: Tuesday, Sep 24th 2024, 14:10
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The Vaud State Council wants to strengthen the purchasing power of the population with various tax breaks and an increase in child allowances. This package is intended to counteract the initiative of the business community, which is calling for a 12% tax cut.
State Councillors Christelle Luisier, Rebecca Ruiz and Valérie Dittli appeared before the press on Tuesday to explain that the government "firmly" rejects this popular initiative, which was launched in spring 2023. The initiative may seem tempting. However, it would result in annual tax losses of CHF 530 to 550 million, which would be unsustainable for the state budget.
Instead, the State Council would like to continue to gradually reduce cantonal income tax. Following the 3.5 percent reduction that came into force this year, annual reductions of 0.5 percent are planned until the end of the legislative period in 2027, i.e. a total of five percent. A five percent reduction in wealth tax is also planned, again in several stages.
Various simplifications are also planned in the area of inheritances and gifts, for example by increasing the tax thresholds for direct descendants. In addition, taxation on the transfer of companies within the family is to be improved.
Almost a billion more in your wallet
The cantonal government also announced an increase in child allowances. These are to rise from CHF 300 to CHF 322 per month and child from 2025, while the allowance for young people in education is to be increased from CHF 400 to CHF 425.
The package of measures will bring relief of almost one billion francs. The State Council has calculated that the people of Vaud should have around CHF 921 million more money in their wallets over the entire period 2023-2027.
The plan now goes to the Grand Council for consultation. It serves as an indirect counter-proposal to the 12% initiative launched by the Vaud Employers' Association, the Vaud Chamber of Commerce and Industry and the Vaud Chamber of Real Estate. The three umbrella organizations reiterated on Tuesday that the state of Vaud has "not a revenue problem, but an expenditure problem". They are of the opinion that their initiative "remains the only instrument that can relieve the burden on Vaud taxpayers".
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