SWITZERLAND - Wealth Tax and Covid-19 Stokes Global Debate

Arno Froese

Switzerland’s wealth tax offers a rare real-world example of how a levy on assets can work, just as such ideas gain traction elsewhere in the wake of the coronavirus crisis.

The measure forces residents in one of the world’s richest nations to tally the value of their investments, real estate, cars, fine art, Bitcoin, and even beehives and cows. A percentage is then skimmed off by cantonal governments, varying in size and method depending on the canton. Switzerland, among only a handful of countries with the levy, can make a claim that it has the most effective one.

“It works for us,” said Stefan Kaufmann, a farmer from Wetzikon in the canton of Zurich, who describes the policy as a good Swiss compromise. “The wealth tax isn’t a lot. It doesn’t hurt.”

Switzerland’s rationale is the constitutional principle of everyone paying according to their means. Inheritance tax is low, and there’s no capital gains levy on movable property such as equities.

The measure also comes with safeguards. There’s a formula to ensure people who are asset-rich but with low incomes can still afford it. In Kaufmann’s case, the farmers’ association sets the valuation of livestock annually to help keep filing simple.

The result is that Switzerland derives a bigger share of total tax revenue from the levy than any other industrialized country, according to OECD data.

That’s not to say its effectiveness is unimpeachable. A study by University of Lausanne economics Professor Marius Bruelhart found that a cut in the wealth tax rate in Lucerne was followed by a rise in declared assets, hinting at prior evasion.

Whatever the case, Switzerland appears comfortable with the policy.

“It takes some of the tension out of that political debate around tax between the haves and the have-nots,” said David Wigersma, a Lausanne-based partner at Deloitte SA.

-www.yahoo.com, 16 February 2021

Arno's Commentary

Switzerland is considered the freest democratic country in the world. Whenever an issue arises, their people vote.

Who Rules Switzerland?

The Swiss Parliament (Federal Assembly) has a total of 246 members, who are directly elected by the people. Switzerland has a bicameral parliament: the National Council (200 members) and the Council of States (46 members).

15 political parties are represented in the Swiss Parliament. Those parties with the largest share of the popular vote are represented on the Federal Council.

Controversy about paying taxes is nothing new; it’s an issue every country on planet earth is concerned with. But taxing the well-to-do seems to work positively for Switzerland. While they have one of the most expensive workforces in the world, they are still able to balance imports and exports. 

According to the Conference Board, a renowned US-based economic research organization, average hourly compensation in 2016 for the following countries:

• $60.36 Switzerland
• $50.96 Norway 
• $47.96 Belgium
• $44.57 Denmark
• $42.27 Germany
• $39.03 United States

Of interest is that landlocked Switzerland is headquarters of the world’s largest food distributor, Nestle. Also, the Swiss Mediterranean Shipping Company is the world’s second largest shipping line in terms of container vessel capacity.

OECD data reveals how attractive the country is by the percentage of foreigners in the country:

• Luxembourg 47%
• Australia 30%
• Switzerland 30%
• New Zealand 27%
• Israel 22%
• USA 12.6%

While Switzerland is not a member of the European Union, they practice open borders and freedom of movement within EU’s Schengen Zone.

One thing seems clear: Switzerland can show the world how to pay their bills and still maintain a very low average of real poverty. In the end, however, there will be no difference between the rich and the poor. Revelation 6:17 reads: “For the great day of his wrath is come; and who shall be able to stand?”

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

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