As Switzerland approved same-sex marriage, the Swiss also largely rejected a vague draft bill to tax rich people.
Every quarter, Swiss citizens can vote on laws to be implemented in the country. On September 26, Switzerland voted for and approved the “Marriage for all” initiative, making it one of the last European countries to legalize same-sex marriages.
But the Swiss electorate also voted about another proposition of law, a federal popular initiative called “Reduce tax on salaries, tax capital fairly.”
And all districts of Switzerland rejected it, with 65% of votes against the text. It accounts for 1.8 million votes against and 987,000 votes in favor of the proposed tax scheme.
Despite the defeat, the Young Socialist party, which submitted the law, wanted to remain optimistic as “for weeks, we managed to bring up inequities and fiscal justice at the center of public debate,” they tweeted after the results.
The initiative was also referred to as 99% and aimed at taxing revenue coming from capital and assets more than revenue from work. If passed, capital income above a certain amount would have a heavier weight — a 1.5 multiplier — when calculating taxes.
But the text was vague. It didn’t define a threshold to apply the law, the assembly would have been charged to define it, nor did it clearly specify which revenue was considered coming from capital.
Switzerland, an average country in wealth gap scores
The federal assembly, which holds Switzerland’s legislative power, and the federal council called for voting against the initiative. If passed, the initiative would have been enforced despite their opinion.
They considered capital revenue was already heavily taxed. They also claimed it would negatively affect their economy, reduce the incentive to spare and argued the country already had a rather good redistribution of wealth.
Based on the Gini Index, Switzerland ranks at the 65th position for wealth equality, positioning it in the first half of countries.
According to the annual Global wealth report released by Credit Suisse in June 2021, total household wealth in the world grew the most in Switzerland with more than $50,000 US gain in a year.
Swiss rarely approve federal popular initiatives
It is the third initiative from the Young Socialist Party that Swiss citizens have rejected in 8 years.
In 2013, the Young Socialists wanted salaries from the top management of companies not to exceed 12 times the wage of the lowest-paid employees. In 2016, they issued another initiative about speculation on food prices.
The population has historically rejected initiatives proposing to tax rich people in Switzerland. Moreover, the population usually approves only 10% of the popular initiatives presented to them.
The Young Socialists party also plans to propose another law that would consist in capping people’s assets to CHF 100 million (US $108 million) and invest the surplus to fight climate change.
