Defeat for the promoters was in the air, but the scale of the rejection is greater than expected. In Switzerland, the proposal for a super-tax on the inheritance of the wealthy was overwhelmingly rejected in a popular vote. 78.3% of voters said no to the Socialist Youth initiative, only 21.7% said yes, with a national turnout of 42.9%. The full title of the initiative was ‘For a fairly financed social climate policy (initiative for the future)’, so the aspect of higher taxation for the wealthiest was combined with that of financing environmental policies, to which the newly found resources should go, according to the initiators. Indeed, a large part of the Swiss Greens supported the Young Socialists’ proposal.
The proposal
The idea was that inheritances and gifts in excess of CHF 50 million would be taxed at 50%. For example, on an inheritance or gift of 200 million francs, 50 million would have remained tax-exempt while of the other 150 million francs 75 million would have gone to the Confederation and the cantons and the same amount to the heirs or donors. In essence, of the 200 million, 75 million would have gone to the Confederation and the cantons and a total of 125 million (the 50 exempt plus another 75) to the heirs.
Also noteworthy is the involvement of the federal government in the proposal; in Swiss federalism, the federal government does not intervene in the issue and instead it is the cantons that set the rules on inheritance and gift taxes, which are far from the level proposed in this vote.
Exodus risk
But one of the strongest arguments of the majority of the government and parliament, both of which were against the initiative, was the risk of an exodus of some of the wealthy resident in Switzerland to other, more fiscally attractive shores. Shifting a portion of the wealthy to other countries would have the paradoxical effect of decreasing the revenues of those public coffers that the initiative said it wanted to strengthen, pointed out the government majority (where all the major parties, from the right to the left via the centre, sit). Instead of bringing in more resources, in the end the super-tax on inheritances would have produced the concrete risk of bringing in less. That the Socialist Youth’s initiative was too radical, on the other hand, must also have been thought by a not insignificant part of the Swiss left-wing electorate, which as a whole is around 30%, much more than the 20% or so who voted yes.