Financing the 13th AHV: payroll taxes or VAT? -News


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Economist Marius Brülhart on the pros and cons of financing options for the 13th AHV pension.

The Federal Council proposes two options for financing the 13th AHV: either only through higher wage taxes – or with a mixture of wage taxes and a higher VAT. From the perspective of an economic expert, which option is better? “There are pros and cons for both options,” says Marius Brülhart, an economist at the University of Lausanne.

Financing via salary percentages: According to the economics professor, the redistribution has a double effect with this form of financing, because higher incomes are burdened more heavily than middle and low incomes. But: The younger generations are burdened much more; The older ones, who don’t work more or less long until they retire, work less or not at all. Critics see generational injustice here.

Financing via VAT: Here, all age groups help finance the 13th AHV pension – including pensioners. The disadvantage: an increase in VAT hits middle and low incomes harder. Because if goods and services cost more, the burden on wealthy people is less than on people who have to pay more attention to their money.

Federal Council wants to reduce the federal share of AHV


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To finance the 13th AHV pension, wage contributions and, if necessary, VAT should be increased – but additional tax money from the federal budget should not be used for this. The Federal Council wants to reduce its share of financing if the pension increases. The federal contribution would remain the same with a higher pension, but proportionately less money would flow from the federal treasury into the AHV pot.

“Politically, it’s a bit of a trick,” says economist Marius Brülhart. During the voting campaign, the opposition warned that the 13th AHV pension would place further strain on the already strained federal budget. “Now the Federal Council is stealing its own punch by saying: We won’t pay for the 13th AHV pension.”

The economist’s conclusion: Brülhart makes it clear that from an economic perspective it is not possible to say objectively which type of financing would be better. «Both have advantages and disadvantages. A mix of higher wage information and a higher VAT might not be such a bad solution after all.” In principle, Brülhart welcomes the fact that the Federal Council is presenting concrete implementation proposals just a few weeks after the vote. “The people want this 13th AHV pension – and the Federal Council assumes that it could be fully financed.” This is “honest and honest” from the state government and an expression of sound financial management.

Shared response to implementation suggestions


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The unions and the SP want to finance the 13th AHV pension exclusively through wage taxes, which the civil parties and employers’ associations expressly reject because it would be at the expense of those in employment. On the left, there is great skepticism about a higher VAT because it would place an excessive burden on people with low incomes.

The pressure for reform remains: The financing of pension provision will continue to concern politicians. The Federal Council should develop proposals for the next major AHV reform by the end of 2026. Brülhart estimates that the question has become all the more urgent due to the acceptance of the popular initiative for a 13th AHV pension: “That’s why I think it’s fair to say that the 13th AHV should be fully financed from day one.” This is an expression of healthy household management.

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The economist concludes that the pressure on the AHV to reform exists anyway – and would not be further fueled by the full counter-financing of the 13th AHV pension.

Keystone/Ennio Leanza

The future of the AHV: There are currently various proposals on the table as to how the AHV can be secured in the long term – including the model “Lifetime working time”. The idea: If you start working earlier, you should retire earlier. Such a model would be interesting for Brülhart. And: It is also inevitable that the retirement age will become an issue again – this simply results from demographic developments.

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