Fiscal federalism

Fiscal federalism concerns how a federal state raises revenue, assigns expenditure responsibilities and reduces disparities between regions. In Switzerland, Confederation, cantons and communes all have important fiscal roles, with cantonal tax autonomy balanced by harmonisation, intergovernmental transfers and financial equalisation. The system aims to match decision-making, financing and accountability while preserving local diversity and competition. Legal and policy issues include double burdens, tax competition, earmarked grants, task financing, equalisation formulas and the democratic control of public budgets.