ABSTRACT
The very first constraint on fiscal policy-making which emerges form the Swiss federalist structure is one which may also be observed in Belgium, Canada or Germany and in other federal countries: the share of the central government's budget is often too small, or residua. In Switzerland, the cantons have their own constitution and independent power over their budget. The main constraint on the federal government's ability to raise or to lower taxes arises from the fact that all taxes in Switzerland are fixed by law, and therefore are subject to referenda. The federal government has the power to act unilaterally, though on a provisional basis, through urgency decrees. Equalisation in financial capacity is still, in Switzerland, a major public and political debate, polarising opinions in often very divergent lines in terms of political philosophy. In Switzerland, tax policies are discouraged, among other things because of federal relations.
