By Ariane Luthi
ZURICH (Reuters) -Switzerland will vote on a proposed wealth tax on Sunday that will be a litmus test of appetite for wealth redistribution in one of the world’s richest countries.
The proposal from the youth wing of the leftist Social Democrats, or JUSOs, is for a 50% tax to be levied on inherited fortunes of 50 million Swiss francs ($62 million) or more to fund projects to reduce the impact of climate change.
Around 2,500 taxpayers in Switzerland have assets worth more than 50 million francs, according to Swiss tax authorities, with a total wealth of about 500 billion francs.
With as many as two-thirds of respondents against the proposed tax in recent polls, the measure is widely expected to fail, turning attention to the level of support.
COST OF LIVING CONCERNS
“I hope it doesn’t pass,” UBS CEO Sergio Ermotti said during a business event in Zurich last weekend. “But how it’s rejected, what the outcome is, that’s important. Because … it does give an indication of where Switzerland is heading.”
Switzerland is the world’s largest wealth management hub, but could lose that crown as early as this year, according to a forecast from Boston Consulting Group.
The country is home to some of the most expensive cities on the planet and anxiety about the cost of living has been gaining currency in local politics.
In 2024, Switzerland voted to introduce an additional month’s pension payments for the elderly as living-cost concerns trumped warnings about its affordability.
If enacted, the wealth tax initiative would theoretically boost the tax take by 4 billion francs.
JUSO leader Mirjam Hostetmann argues the very wealthy are damaging the climate most with their luxury consumption, and that the 10 richest families in Switzerland together cause as many emissions as the vast majority of the Swiss population.
Critics of the initiative say it could trigger an exodus of wealthy people from Switzerland, reducing overall tax revenues. The Swiss government has urged voters to reject it.
“The initiative would greatly reduce Switzerland’s attractiveness for wealthy individuals,” Swiss Finance Minister Karin Keller-Sutter said last month.
($1 = 0.8055 Swiss francs)
(Reporting by Ariane Luthi and Dave Graham; editing by Philippa Fletcher)
Comments