Switzerland rejects tax on wealthy as referendum fails to win public support

Swiss voters have decisively rejected a proposed tax on the super rich designed to raise funds for climate change initiatives. The initiative, led by the Young Socialists, sought to impose a 50 percent tax on all monetary or asset transfers exceeding 50 million Swiss francs, approximately 47 million pounds. This measure would have targeted around 2,500 individuals, representing 0.03 percent of the Swiss population.

Preliminary government figures indicate that approximately 82 percent of voters opposed the tax in a national referendum. The result reflects deep concern among Swiss citizens and policymakers about the potential consequences of such a policy. The proposal met strong resistance from the government and all major political parties, except those on the left, who viewed the tax as a critical step towards funding environmental projects.

Business leaders and wealthy residents voiced significant objections, warning that the measure would undermine Switzerland’s reputation as a low tax haven. High profile entrepreneurs, including Peter Spuhler of Stadler Rail, publicly threatened to relocate should the levy be implemented. Opponents argued that the anticipated exodus of affluent individuals would reduce income tax receipts and largely negate any benefit from the new tax.

Switzerland boasts more than nine billionaires per one million inhabitants, according to recent UBS data, far surpassing the Western European average. The country’s favourable tax regime for wealthy foreigners, allowing some to pay tax without declaring their full assets, has historically played a central role in attracting global capital. Switzerland now contends with growing competition from other low tax financial centres such as Dubai, Abu Dhabi, Hong Kong, and Singapore, each eager to lure high net worth individuals with generous tax incentives.

This rejection comes at a time when a number of European countries are taking a stricter approach to taxing the wealthy. In the United Kingdom, Rachel Reeves has recently introduced a mansion tax on properties valued above two million pounds, following her abolition of the non domiciled resident tax status. Italy has increased its flat tax on wealthy foreigners by 50 percent. Meanwhile, although France’s parliament blocked a proposed wealth tax on households with assets above 100 million euros, the Socialist Party is now working on plans to require the ultra rich to lend funds to the government, potentially raising up to six billion euros from those with annual incomes exceeding one million euros and net assets above ten million euros.

This latest referendum result underscores Switzerland’s ongoing commitment to maintaining its position as a stable and attractive destination for the world’s wealthiest individuals, while neighbouring economies pursue more interventionist fiscal policies aimed at high earners.