Face-to-face: Tax cuts in Geneva?

The law on personal taxation (LPP) proposes to reduce cantonal and municipal income tax for all taxpayers. Those in favor of the reduction want to “restore purchasing power to Genevans”. Opponents denounce a decline which mainly benefits higher incomes. Entry into force is planned for 2025. The financial impact is estimated at 326 million francs for the canton and around 108 million francs for the municipalities.

A tax cut for purchasing power

On Sunday, we will vote on a proposed income tax cut. The reform provides for a reduction varying from 11.3% for medium and low incomes to 5.4% for the highest. It will strengthen the purchasing power of the canton’s population.

Geneva stands out for its very high level of taxation, particularly in comparison with other cantons. Indeed, with a maximum tax rate of around 45%, Geneva is among the cantons which tax the most, the Swiss average being around 33%.

This tax burden mainly affects the middle class, often excluded from social assistance and public subsidies (such as LAMal subsidies or housing assistance). It is therefore essential to grant them significant tax relief, because it is they who bear a significant part of the tax burden. But be careful, let the opponents of this project rest assured, Geneva will not become a tax haven for all that, the highest income classes will always remain the most taxed in Switzerland despite this reduction.

Although the implementation of this reform would result in a theoretical loss of tax revenue estimated at around 326 million francs for the canton and 108 million for the municipalities, the Council of State stressed that this reduction could be offset by a positive development tax revenues in the years to come.

Let us remember, between 2003 and 2021, tax revenues increased by 88%, while the population only grew by 17%. This positive trend suggests that a more attractive tax system could, in fact, stimulate the local economy and state resources.

The middle class in Geneva is today suffocated by increasing costs: high rents, constantly increasing health insurance premiums, etc.

Taxation is one of the only levers of action on which the authorities can act to restore purchasing power to households. Without tax relief, middle-class households will continue to face increasing pressure, threatening their quality of life and their ability to actively participate in the local economy.

Indeed, the proposed tax reform is both fair, necessary and beneficial for the entire canton. It supports the middle class, restores purchasing power to households and stimulates the local economy by strengthening Geneva’s tax competitiveness.

In these times of budget surpluses, it is not only possible, but also urgent, to redistribute part of these gains to improve the quality of life of Genevans, while consolidating the economic future of the canton.

Tax cut? Too many gray areas!

The outcome of the November 24 vote has become uncertain since we learned through the press that cantonal tax forecasts were plummeting. Added to a bill that is already misleading and hastily processed is the opacity of tax forecasts that have been drastically revised downwards.

What confidence can we have in the figures manipulated by the Minister of Finance, Madame Fontanet? The latter contradicts itself from month to month, and continues to tell us that everything is going well in the best of all possible worlds, while the figures say precisely the opposite. At the precise moment when the voting envelopes arrive, Madame Fontanet continues to maintain a strange silence on the risks looming over the 2025 budget.

We will have understood that the PLR ​​wants to fulfill its electoral promise at all costs to reduce public finances, even if it means twisting democracy. Since the start of the botched processing of the bill misleadingly titled “Strengthening purchasing power and tax revenues” in 5 small sessions of the Tax Commission between February and March 2024, it has not been possible to obtain figures more recent than 2021, nor the detail concerning the more than 70 million which would be lost only on withholding tax in the event of acceptance of this bill. 70 million tax gift for cross-border workers!

The MCG which supports such a measure seems to have no concern about betraying its voters and sacrificing benefits to Genevans to please the richest, including border residents.

The right-wing majority, confusing haste with precipitation, has expressed its desire to bring this law into force at all costs, leading to a drop in benefits and tax revenues on January 1, 2025, even if it means also crushing the municipalities. The latter will suffer the full brunt of a tax loss of 108 million francs which is added to the 326 million tax losses for the Canton.

To this already hefty addition, it will be necessary to add some 305 million more which the Council of State hardly talks about. Don’t throw any more away! The argument of the president of the PLR ​​to defend this operation? Affirm that “even Qatar, with 53 billion for 2.7 million inhabitants, or 19,600 francs per inhabitant, has a per capita budget lower than that of the Canton of Geneva.”

Taking Qatar as a model of society, we must dare! This shows the extent to which a certain elite is disconnected from the needs of the population, the increase in precariousness, and the need for the greatest number to count on a State which provides fundamental services and redistributes wealth.

There is no reason why people who have worked all their lives to build Geneva and guarantee its prosperity should see the aid and benefits to which they are entitled reduced; no reason for families to be given access to a nursery place because of the shenanigans of the right.

And if the PLR ​​wants to Qatarize Geneva by driving out the middle class, we have the power to oppose it. A NO in the ballot boxes on November 24 will allow this law to be overturned, which definitely has too many gray areas within it.

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