Some of the super-rich who would have to pay the tax have reacted in horror. Business magnate Peter Spuhler, one of Switzerland’s richest people with an estimated wealth of four billion francs, calls the initiative a “blatant act of confiscation”. Spuhler, who is chairman of the board of directors of train manufacturer Stadler Rail, even warned in a newspaper interview that he would emigrate to Austria, where there is no national inheritance tax. In Switzerland, his eventual heirs would have to fork out at least 1.5 billion francs in inheritance tax if voters approved the initiative. Absurd, says Spuhler. “Look at my bank balance and you would be surprised. Nearly all of my wealth is invested in my companies and in other smaller firms.” He would have to sell his businesses to pay the tax. In the worst case, these would end up in the hands of foreign investors. Such fears are unfounded, say those who champion the initiative. Mirjam Hostetmann countered his remarks, pointing out that it would be possible to pay the tax in instalments or take out loans to cover the bill.
Economist Volker Grossmann, who is a professor of economics at the University of Fribourg, disagrees that taking on new debt is problematic for family companies, provided business is going well. “The economic impact has been completely exaggerated,” he told the tabloid newspaper “Blick”. Taxes are not the only criterion for a location’s attractiveness – Switzerland also has other benefits. Grossmann calls inheritance tax “the least painful tax of all”, because inheritors don’t earn the assets bequeathed to them but are simply in the fortuitous position of having been born into wealth.
A repeat of 2015?
The Federal Council and the conservative majority in parliament flatly reject the initiative. They say it would make Switzerland less attractive as a domicile for wealthy individuals, not least given that the rich already contribute a lot to public finances through wealth tax. One per cent of taxpayers pay over five billion francs, or nearly 40 per cent of direct federal tax revenue.
The initiative would affect around 2,900 taxpayers, who own total assets worth 560 billion francs – or 20 per cent of all taxable wealth in Switzerland.
The SP and the Greens are the only parties supporting the initiative, arguing that the gap between rich and poor is growing. Given the political balance of power, it would be astonishing if the proposal were to be approved at the ballot box. According to a poll conducted in August 2024 by the free newspaper “20 Minuten”, 58 per cent of voters are against the initiative. No updated poll was ready at the time of our editorial deadline.
Ten years ago, a left-wing initiative to introduce inheritance tax at federal level was clearly rejected, with 71 per cent saying no. The aim back then was to charge 20 per cent tax on estates worth two million francs and upwards – to help fund the state pension. The new scheme would now target the super-rich.
Comments