On September 27th voters in Vaud will decide whether to cut cantonal income and wealth taxes by 12%. Business groups say the measure would ease the tax burden and bolster purchasing power. The cantonal government, left-wing parties and trade unions warn that it would blow a hole in the public finances.
The initiative is one of Vaud’s most fiercely contested cantonal votes in recent years. It was launched by three business organisations: the Vaud Employers’ Association, the Chamber of Real Estate and the Chamber of Commerce and Industry. In 2023 they collected more than 28,000 signatures, over twice the number required.
The campaign’s central claim is that Vaud taxes its residents too heavily compared with other cantons. Its backers argue that the canton can afford the cut if it restrains spending.
On the Federal Finance Administration’s standardised measure for individuals, Vaud’s tax burden is about 31% above the Swiss cantonal average. In the latest detailed comparison, published in 2025, Vaud scored 131 on an index where Switzerland as a whole equals 100, the highest figure of any canton.
Vaud’s own accounts suggest that the recent deterioration in its finances is chiefly a spending story rather than a revenue one. Tax receipts have continued to rise, but recurrent expenditure has risen faster, particularly since 2022. Supporters say the move would encourage greater public spending discipline.
The public-sector wage bill has increased by roughly CHF 500m over that period, reflecting a larger workforce, increases in salary scales and inflation-linked pay rises. Other pressures have come from refugee-related spending, especially for Ukrainians, whose integration into the labour market has been slower than initially hoped—by the end of 2025, only 36% of working-age Ukrainian refugees in Vaud who had arrived in 2022 were in work.
Health-insurance subsidies have been another important source of spending growth. Because eligibility is concentrated among lower- and middle-income households, much of the broader middle class receives little or no benefit from the scheme despite helping to finance it through taxation.
Supporters say the cut would make Vaud more attractive and, in particular, raise the disposable incomes of the middle class. They reject the suggestion that it amounts to a tax giveaway, describing it instead as a modest correction to an unusually heavy tax burden.
They also argue that the proposal is fair because every taxpayer would receive the same reduction in cantonal income and wealth tax. Municipal taxes would be unaffected.
The cantonal government and parliament oppose the initiative. The State Council points out that Vaud has already approved a gradual 7% reduction in income tax by 2027. Compared with that plan, it says the initiative would cost the canton an additional CHF 272m a year, forcing spending cuts or reductions in public services.
Left-wing parties and trade unions make a different objection: that the biggest gains would go to those with the highest incomes and largest fortunes. Because the tax system is progressive, richer taxpayers pay more tax in absolute terms and would therefore receive larger savings from a percentage cut. Critics also argue that the proposal would weaken the financing of public services at a time when the canton’s finances are already under pressure.
The Socialist Party and the Greens recommend a No vote. The Swiss People’s Party (SVP/UDC) and the Green Liberal Party support the initiative, while the Centre Party opposes it.
The PLR/FDP is split. Party delegates endorse the initiative, but a majority of its parliamentary group in the Grand Council voted against it.
A Yes vote would also have consequences beyond the headline 12% cut. The existing plan to reduce income tax by 7% would fall away and be replaced by a 12% cut. So too would a reform, adopted in 2024, of Vaud’s fiscal shield (bouclier fiscal) for wealthy taxpayers.
That shield limits combined cantonal and municipal income and wealth taxes to 60% of a defined measure of income, subject to certain conditions and floors. The 2024 reform made the mechanism more favourable for some wealthy taxpayers. If the 12% initiative passes, that reform would become void. For some people who currently benefit from the shield, the gain from the general tax cut could therefore be partly offset by a less favourable treatment of their wealth.
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