Why the wealthy are leaving Switzerland

Home to an estimated 110 billionaires and even more multi-millionaires, Switzerland is in danger of losing a large part of its population. The ultra-rich are preparing to flee the country in fear of a new tax proposal. 

Yes to the tax

The JUSO (The Socialist Youth), under the Social Democratic Party, are determined to impose a law for a 50 per cent inheritance tax on all residents whose assets exceed 50 million francs (€7 million).

The Vice President of JUSO, Melanie Rufi stated to the Press that the rich should be held “responsible” for climate change, as they  “contribute enormously to the destruction of the climate through their investments and consumer behaviour.”

The Party has now collected 109, 988 signatures (from the 100,000 required) and submitted them to the Federal Chancellery for verification in March this year.

The Socialist Youth have estimated that the tax would generate 6 billion francs (€914,694,103) in income for both the government and Swiss residents. “With the initiative for the future, we are ensuring socially fair financing of climate protection,” said the Party´s Vice President.

No to the tax

While the left of the Swiss parliament is fully in support of the initiative, MPs from other parties are concerned about the consequences on the local economy.

“Switzerland clearly needs wealthy people, as more than 50 per cent of the tax revenue comes from the super rich,” said Elisabeth Schneider-Schneiter, the representative of the Centre Party. “If we drive out individuals with strong fiscal capacity through radical laws, finances will ultimately have to come from the middle class.”

According to Michele Blöchliger, an MP from Nidwalden; a region inhabited by the Swiss wealthy, “the first departures have already taken place.” MP, Erns Stocker from Zurich also stated to the local Press that the wealthy individuals are now already “planning to move.”

The head of the large Swiss company, Stadler Rail, Peter Spuhler expressed that the tax would cause “gigantic damage” to Switzerland, losing its high position in the world of global business.

He estimated that he alone would have to pay between 1,5 and 2 billion francs (up to €304,898,034) and stated to be fleeing from Switzerland “at least temporarily before the vote” and would stay abroad should the initiative be approved.

What will it take?

To become the law, the initiative has to go through numerous stages. Initially, a parliamentary consultation and recommendation will be held, which are likely to last at least until the year 2025. Therefore, the decision will not be made until 2026, and even then it would require the support of the majority.

Despite this, many of the Swiss wealthy are already moving abroad, as Norwegians who have fled to Switzerland in fear of their country´s high taxes are preparing to find a new country, welcoming to the ultra-rich.