This paper summarizes and analyzes a 1999 report by the Swiss federal government and the cantons (Conseil fédéral 1999), which presents the planned reform of the equalization system in Switzerland. I argue that this reform is the result of hard work by both levels of government, and that it proposes ideal solutions to reform Swiss federalism in terms of economic rationality, but I doubt that such an extensive reform can be successfully implemented within the Swiss political context.