On March 12, the voters in Canton Basel-Stadt went to the polls to vote on the acceptance of a new tax package that will relieve the population by CHF 112 million per year in taxes, as compared to 2022. This new tax package, which was accepted by 84.39% of the voters, will benefit everyone in Stadt Basel, Riehen, and Bettingen from the tax cuts—including people of all income levels and assets, families, couples without children, and individuals.

The trigger for this tax package was a community initiative in Riehen that demanded an increase in the child deduction for minors and young people who are in training. The Basel-Stadt Government Council (Regierungsrat) and Grand Council (Grossrat) considered the initiative to be sensible, but noted that it would only affect some taxpayers—especially families with children. A counter-proposal was therefore drawn up that would relieve all taxpayers. This proposal was accepted by the Grand Council with 77 votes for and 15 against, in September 2022. The details of the tax package are as follows:

• Income tax rate: The lower, middle, and upper tax rates each decrease by 0.75 percentage points.
• Insurance deduction: The tax deduction for health insurance premiums will be increased. In addition, all people who receive premium reductions can now claim the full premium deduction. 
• Higher deductions: The social deduction (free allowance) increases by CHF 400 for individuals, CHF 700 for single parents, and CHF 800 for married couples and cohabiting couples.
• Child deductions: The tax package takes up the demand from the community initiative and increases the child deduction. In addition, the deduction for costs that arise from third-party care for children (eg, at day-care centers) will be increased.
• Wealth taxes: The tax package reduces the number of tariff levels and lowers tax rates. The system that higher assets are taxed more heavily than lower ones will be retained.
• Support deduction: A range of CHF 500-5,500 will be introduced for the support deduction. This means that support payments that are below the previous minimum of CHF 5,500 are also deductible.

Opponents of the tax package argued that the top earners and wealthy would benefit more than people with low or no income. They also felt that there would be less money in the canton’s coffers for urgently needed investments in climate protection, social housing, and good childcare facilities. Therefore, they initiated a referendum against the Grand Council’s decision, which was brought to a vote on March 12.

The Grand Council argued that it was time to ease the tax burden on the population. The canton has had large surpluses over the past 15 years. They argued that the measures in the tax package are balanced such that all sections of the population will benefit from it. Especially in times of rising prices, tax relief for the population is important and makes sense. The various measures increase purchasing power and promote the compatibility of family and career. Furthermore, the tax cut is an important piece of the puzzle to maintain and improve the canton’s attractiveness, both for the population and for businesses. Basel-Stadt still will not become a low-tax canton, but together with the other location factors, this tax relief will make it a little more attractive.

The Grand Council considers the canton’s financial situation healthy and solid. The canton has reduced debts by several billion francs and has been generating large surpluses for years. The rating agency Standard & Poor awarded the canton the highest credit rating “AAA” again in 2022. The implementation of the present tax package was already taken into account in the assessment, indicating that there is financial leeway for the tax package and important investments. Of the 42.18% of eligible voters that took part in Sunday’s vote, 83.29% of voters in Stadt Basel, 90.28% in Riehen, and 95.33% in Bettingen voted to accept the Grand Council’s new tax package.

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