Decisions of the Swiss Voters and the Majority of the Cantons on March 4, 2018

by Thomas Fleiner

The sovereign decided on this Sunday on two crucial decisions, with regard to the Swiss constitution: The turnout of this vote was 54.1%. This turnout is exceptionally high for Switzerland, because the discussions mainly on the decision of the sovereign with regard to radio and television were strongly emotional. The first decision concerns a federal decision of the Swiss parliament about the financial order of Switzerland (Article196 cipher 13, 14 par 1 and 15 of the Constitution). The sovereign adopted this first decision by a majority of 84,1%; all cantons adopted this decision of the Parliament; however, the sovereign rejected the second popular initiative by a majority of  71,6% against 28.4%.  No canton adopted this popular initiative. The Parliament and the Federal Council recommend to the sovereign to accept this federal decision of the Parliament (Article 140 a. of the Constitution). The second much more controversial issue is a popular initiative for the abolishment of the so-called compulsory fees on radio and television (public service). With regard to this popular initiative, the Federal Council and the Parliament recommended to the sovereign to reject this initiative concerning compulsory fees (Article 93 par two to six, and Article 197 par 12 par three to six of the temporary arrangement of the Federal Constitution).

The first of these two issues establishes and enables the constitutional financial order of Switzerland with the necessary constitutional competences. Besides the cantonal fiscal revenues, also the federation can levy a tax on the income and on corporate profit, the so-called direct federal tax. The federation has the competence to levy only a value-added tax and a tax of the income of taxpayers. The income tax and the value-added tax are the most important sources for the income of the federation. Since several years, those taxes guarantee a stable federal budget. The Federal Constitution did always limit the federal competences to levy taxes. The time limit of these competences has historical reasons. The federation could cover its budget until the First World War almost only with customs. The competence to levy taxes remained traditionally within the competences of the cantons. The federation levied only taxes in time of crises in order to manage those crises with extraordinary spending. In general, the federation established these taxes with emergency law. On May 11 1958, the sovereign replaced the federal constitution within a constitutional amendment concerning the sales tax with a value added tax. This constitutional amendment was a compromise. On one side, one had to limit the doubt that these new competences of the federation would limit the cantonal capacities to levy taxes. On the other side, one had to impede that the people expected the federation will levy too high taxes. After World War II, the federation had to take over new duties. For these duties of the federation, new incomes and taxes of the federation were necessary. With the time limit, one could guarantee that the Parliament and the sovereign could decide regularly on the financial order of Switzerland.  The sovereign has thus to decide all several years on the Constitution and its financial order. Accordingly, Switzerland has to decide on the Constitution and the financial order of Switzerland. The last time the sovereign extended the value added tax and the direct income tax. With regard to these taxes, the federation will have no more competence to levy those taxes. The former financial order of Switzerland came into force in 2007 and ends 2021 according to Article 128 and 130 of the Constitution. The acceptance of the sovereign will enable the federation to prolong its competence that is, to levy an income tax as well as a value added tax for some 15 years until 2035. This income of the federation is necessary to cover all constitutional duties of the Confederation. This proposal changes also a temporary amendment on a needless tax on ale. This tax on ale went, into force on with a new legislation on July 1 2007. As the income budget of the federation is indispensable to execute its duties, the Parliament and the federal Council recommended to the sovereign to accept this proposal including the federal decision.

The Parliament and the Federal Council recommended to the sovereign to reject second issue, which is a popular initiative concerning the abolishment of compulsory fees for television and radio services and private services. The main argument of the initiators of this proposed constitutional amendment are as follows: According to the Constitution, a compulsory sales tax would enlarge each household with an additional 451 Francs per year. A compulsory fee is unnecessary and an illegal guardianship for the citizens by the state. An abolishment of this compulsory sales tax would relieve specially households with low salaries with an additional income. It would also enlarge the freedom of choice for any household with regard to radio and television programs. An abolishment of this compulsory sales tax would boost the Swiss economy with some additional 1.37 billion. This would create additional working places and encourage investments for the Swiss economy. An abolishment of those compulsory fees (1.37 billion) would be fruitful for the entire Swiss economic system. The enormous waste with regard of this incredible spending capacity of 1.37 billion Swiss francs would be at disposition for the Swiss economy. Such economical boost would create working places and freedom for new investment. Such abolishment of the compulsory fees would also discharge enterprises, which will have higher income and fewer taxes. The federal council argues that it is necessary to guarantee all four linguistic regions in Switzerland a comprehensive information on politics, culture and sport. The federation levies these compulsory fees for its radio and television services. These earnings benefit the association of the Swiss radio and television service (SRG) as well as local and regional television services. In a diverse Switzerland with many minorities, it is impossible to finance countrywide qualitative, good in content diverse programs. Citizens seem to agree for diverse reasons that a sophisticated program should be in the interest of minorities. Such initiative would mainly strike edge regions of Switzerland. Switzerland as one country with many minorities has to hold its different linguistic and minority regions thoroughly together. For all these reasons, the Parliament and the Federal Council recommend the sovereign to reject this initiative.

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