Nearly two-thirds of Swiss voters have rejected an initiative to tax passive income — possibly including all capital gains — at 150 percent of the rate normally applicable to an individual taxpayer's income.
Nearly two-thirds of Swiss voters have rejected an initiative to tax passive income — possibly including all capital gains — at 150 percent of the rate normally applicable to an individual taxpayer's income.
Just under 65 percent of voters and all 26 cantons voted against the measure September 26. The Swiss Socialist Youth Party, which proposed the initiative, said it was needed because tax breaks for the richest 1 percent have led to a record level of inequality in recent years.
Initiatives are put to a vote in Switzerland if at least 100,000 voters sign a petition supporting the proposed measure. If the initiative involves a constitutional issue, it must be approved by majorities of those casting ballots and of the country’s 26 cantons.
Finance Minister Ueli Maurer reportedly told a news conference that the vote demonstrated that a majority of Swiss voters are content with the existing tax regime. The Swiss Broadcasting Corp. quoted Maurer as saying that the combination of progressive income tax rates, wealth tax, and social security benefits is "obviously sufficient to prevent a further opening of the gap between the rich and the less well-off."
The Swiss Bankers Association, which campaigned against the initiative, welcomed the result, saying it would have hurt many small- and medium-size companies, start-ups, small investors, and homeowners. “As the Federal Council explained in the run-up to the referendum, the heavier taxation of income from invested capital would have detracted from Switzerland’s international appeal as a business location and reduced incentives to save, both of which are key drivers of the Swiss economy,” the association said September 26. “The rejection of the initiative can be seen as a sign that Switzerland’s population has faith in its existing tax system. One of the main reasons cited for voting against the initiative was the fact that its wording was open to interpretation, making the impact on the economy and society . . . hard to gauge.”