Will the richest residents of tax haven Switzerland soon have to pay 50 percent inheritance and gift tax on their millions? That question hangs in the air on Sunday during a national referendum. Based on the most recent polls, it seems unlikely that the tax plan will win a majority of votes, but there has been intense debate since the plan was introduced three years ago.
The proposal was conceived in 2022 by the Young Swiss Socialists (JUSO), the independent youth wing of the Socialist Party. To raise more money for spending on climate policy, they proposed imposing an inheritance and gift tax of 50 percent on assets above 50 million Swiss francs (more than 53 million euros). Inheritance tax only exists at canton and municipal level in Switzerland, and amounts to a maximum of 3.5 percent above an exempt sum. Unlike JUSO’s tax plan, spouses and immediate family members are usually excluded.
The tax applies to around 2,500 households in Switzerland and should raise around 4 billion Swiss francs (4.3 billion euros). That money can be used to achieve the Swiss climate goals, according to the Young Socialists. According to them, it is the rich who are responsible for the most emissions. “In Switzerland, a super-rich person produces more CO in just a few hours2emissions than an average person in their entire life,” it says the initiative text. In addition, the richest Swiss and the fossil fuel lobby are blocking climate measures, JUSO chairman Mirjam Hostetmann writes by email. “With our referendum we are addressing the core of the problem: those who are most responsible for the climate crisis and benefit most from it must finally do their fair share.”
‘Initiative for a Future’
At the beginning of March 2024, JUSO had obtained the necessary hundred thousand votes to organize a referendum. The vote on the ‘Initiative for a Future’ will take place this time. The plan has been making waves in Switzerland for years, which is known for its favorable tax rules. Peter Spuhler, owner of train and tram builder Stadler Rail and one of the richest people in the country, has repeatedly said that JUSO’s initiative forces him to move. “It would be a disaster for Switzerland if the plan is adopted.”
In Switzerland, a super-rich person produces more CO in just a few hours2emissions than an average person in their entire life
Spuhler says that under JUSO’s plan, his descendants would have to pay 1.5 to 2 billion francs, but that much of that money is tied up in his many companies. In doing so, he touches on a concern that many residents have, from billionaires to owners of family businesses. What if their company has to be sold to cover the inheritance tax? “It is no surprise that the billionaires are against the referendum,” says Hostetmann. “But the fears they sow about family businesses are unfounded.” According to her, family businesses are “structurally not affected by the tax exemption of up to 50 million Swiss francs, as very few companies have assets even close to this amount.”
If a majority of Swiss people vote in favor of the initiative, the tax will take effect immediately. Although the latest polls show that only a quarter of Swiss support the proposal, banker Philip Rochat told the British business newspaper Financial Times that several people have chosen not to wait for the vote and to move as a precaution. According tomanaging partner At private bank Lombard Odier, foreign customers have also decided not to move to Switzerland because of the “extremely harmful” proposal. Minister of Finance and Federal President of Switzerland Karin Keller-Sutter also said last month that “the initiative significantly increases Switzerland’s attractiveness for high-net-worth individuals.” [zou] reduce.” The government advised its citizens to vote against.
JUSO takes into account that the initiative will indeed be rejected on Sunday, but says it is satisfied that the proposal has made such a difference in Switzerland and has convinced young people. “Regardless of the final outcome, the referendum has succeeded in putting social justice and climate policy at the center of the public discussion,” says Hostetmann.
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