As the California government wants to impose a new wealth tax, it’s worth checking how similar schemes are viewed in other jurisdictions. The Swiss voters were given an opportunity to scalp their very richest citizens and permanent residents with a proposed wealth tax, but it went down with 78% voting against it:
“Switzerland on Sunday overwhelmingly rejected a proposed 50% tax on inherited fortunes of 50 million Swiss francs ($62 million) or more, with 78% of votes against the plan, an outcome that even exceeded the two-thirds opposition indicated in polls,” Reuters reported this week.
All Swiss cantons already tax assessed gross worldwide assets, minus debts and with exceptions, making it one of the few countries in the world to retain a wealth tax. But competition among cantons keeps the tax burden relatively low and, as the Tax Foundation notes, “the Swiss wealth tax acts as a substitute for a capital gains tax and an estate tax, which are common in other countries”. The referendum would have imposed an additional and very steep national tax.
This was actually the second recent failed attempt to impose a national wealth tax on inheritances. Seventy-one percent of Swiss voters rejected a 2015 proposal for a 20 percent tax on estates and gifts of over 2 million francs. The revenues would have been earmarked for old-age pensions.
‘Inequality in Opulence is Better than Equality in Poverty’
The 2025 tax scheme openly played to envy. It was targeted at combating “inequality” by seizing half the assets of the rich and allocating proceeds to offset the climate damage they allegedly cause.
Finance Minister Karin Keller-Sutter opposed the proposal, warning that “many wealthy people would simply emigrate to avoid the tax and keep their wealth”. She also pointed out that while all but two of the country’s 26 cantons tax inheritances, “the people have abolished inheritance tax for children and spouses in many cantons”. She added, “I think it is right that what was developed in the nuclear family can be passed on”.
Philosopher Olivier Massin, a professor at the University of Neuchâtel, criticized the motivation driving much of the campaign for the tax. He wrote that “inequality is by nature neither good nor bad” and that envy is the main driver of egalitarianism. “Envy being inglorious, we grimace in indignation, making what is ultimately only the expression of resentment a moral cause.”
Massin added that “inequality in opulence is better than equality in poverty”.
And Switzerland is undoubtedly “opulent” — or, at least, prosperous — with a per capita gross domestic product of $103,669 as compared to $85,809 for the U.S., according to the World Bank. It builds that wealth with a second-place score in the current Index of Economic Freedom (the U.S. is now ranked at 26), suggesting that less government meddling in economic matters is the best way to increase prosperity.
