Switzerland on Sunday clearly rejected a proposed 50% tax on inherited fortunes of 50 million Swiss francs ($62 million) or more, public broadcaster SRF said in a first results estimate, with an expected 79% of votes against the plan.
The proposal from the youth wing of the leftist Social Democrats, or JUSOs, aimed to fund projects to reduce the impact of climate change, was widely expected to fail, with over two-thirds of respondents against the proposed tax in recent polls, Reuters reported.
Unlike current cantonal taxes, the proposed levy would apply across the country and include no exemptions for spouses or direct heirs, sparking concern among financial advisors and the country’s ultra-wealthy, the Financial Times reported.
Bankers have watched the vote closely, casting it as a litmus test of appetite for wealth redistribution in Switzerland, as other countries, like Norway, have beefed up their wealth tax or debated similar moves.
Has Switzerland traditionally imposed inheritance tax?
Switzerland has traditionally imposed no federal inheritance or gift tax; such taxes are governed only at the regional canton level, with some cantons not imposing inheritance taxes at all.
The initiative would have slapped a 20% tax on inheritances of more than 2 million Swiss francs ($2.2 million) passed directly onto children and replaced a mishmash of regional laws, most of which don’t tax children who are heirs at all.
Switzerland govt had asked voters to reject referendum
Switzerland 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.
Critics of the initiative said it could trigger an exodus of wealthy people from Switzerland, reducing overall tax revenues. The Swiss government urged voters to reject the proposal, according to Morning Star.
What had proponents said?
Proponents had framed it as a measure of fiscal fairness to reduce wealth inequality and boost national social programs and climate initiatives.