Piggery and jealousy in Switzerland: referendum
Millionaires in Switzerland are jealous of each other's tax privileges. So says a new story in Germany's Suddeutsche Zeitung (rough English web translation here) - about an interesting new development: a referendum on Sunday in the Canton of Zurich on whether or not to accept certain special tax privileges for foreigners.
The article starts:
"Michael Schumacher can still sleep soundly. Milk Baron Theo Müller, however, is afraid. Both have moved from Germany into Switzerland - one to Lake Geneva, and the other to the Gold Coast of Lake Zurich."
"It is a great piggery, a scandal," said Philip Gaydoul, a Swiss discount king. Gaydoul doesn't get the preferential tax treatment - because he is Swiss. Only foreigners officially not working in Switzerland are elegible for this special tax treatment. Gaydoul understandably doesn't like this.
The tax preference is simple: Switzerland allows you to pay a tax called Pauschalbesteuerung that is based on five times the annual rental income on your home. This is the only tax you pay - so all your other millions in income are exempt. For the seriously rich foreigner, this can be a massive tax subsidy. So if you rent a place for 20,000 Francs per month, your taxable income would be 100,000, and the tax rate in your canton is 30%, you'd pay 30,000 Francs in tax. Interestingly, this is not a tax on income, but on spending. (See here for more details.)
The Swiss love referendums, and talk in town is that the opponents of this corrupt system have a decent chance of winning and getting rid of this unpleasant system. If you have the impression that all Swiss people are comfortable with their tax haven status and all that dirty money, you would of course be wrong - a very large proportion, and a growing portion of the population it seems, don't like it. The mood in Britain on its tax haven status is changing fast, not least with respect to the "non-domiciled" foreigners (Britain's equivalent to the Swiss residents we're talking about here).
Domestic pressure may be about to change Switzerland - or at least this part of Switzerland - for the better too. Bring it on.
The article starts:
"Michael Schumacher can still sleep soundly. Milk Baron Theo Müller, however, is afraid. Both have moved from Germany into Switzerland - one to Lake Geneva, and the other to the Gold Coast of Lake Zurich."
"It is a great piggery, a scandal," said Philip Gaydoul, a Swiss discount king. Gaydoul doesn't get the preferential tax treatment - because he is Swiss. Only foreigners officially not working in Switzerland are elegible for this special tax treatment. Gaydoul understandably doesn't like this.
The tax preference is simple: Switzerland allows you to pay a tax called Pauschalbesteuerung that is based on five times the annual rental income on your home. This is the only tax you pay - so all your other millions in income are exempt. For the seriously rich foreigner, this can be a massive tax subsidy. So if you rent a place for 20,000 Francs per month, your taxable income would be 100,000, and the tax rate in your canton is 30%, you'd pay 30,000 Francs in tax. Interestingly, this is not a tax on income, but on spending. (See here for more details.)
The Swiss love referendums, and talk in town is that the opponents of this corrupt system have a decent chance of winning and getting rid of this unpleasant system. If you have the impression that all Swiss people are comfortable with their tax haven status and all that dirty money, you would of course be wrong - a very large proportion, and a growing portion of the population it seems, don't like it. The mood in Britain on its tax haven status is changing fast, not least with respect to the "non-domiciled" foreigners (Britain's equivalent to the Swiss residents we're talking about here).
Domestic pressure may be about to change Switzerland - or at least this part of Switzerland - for the better too. Bring it on.
posted by TJN at 2:32 am
2 Comments:
My view is that a Switzerland used to be a role model which has been fighting injustice for hundreds of years. This is the source and history of Switzerland if you think about heros like Wihelm Tell, Arnold Winkelried or politicians and farmers who tried to protect Jewish people during 2nd world war. Switzerland used to be a place where injustice was not accepted. It was a crime. Today, the word "injustice" has been replaced by lawyers and others by the word "greed". "Greed" is now the hidden driver not anymore the fight against injustice. Sad to admit but this is Swiss reality. It is time to face it!
Have we Swiss lost values? Hawe we adjusted the world? Is Switzerland now Greedyland? I do not know and I do not want to know, I am naive but I do not feel comfortable anymore to be proud of my Swiss nationality.
Rudolf Elmer
Now, come on Rudolf Elmer,
There are only a very few considered eligible for this kind of taxation. And the point is, that these people are not allowed to work in Switzerland anyway. e.g. Schumacher, Peter Alexander etc. If they cannot settle in Switzerland, they will go to Monaco, Lichtenstein or elsewhere. So what's the point of not allowing them to live in Switzerland.
BTW. Wilhelm Tell wasn't a hero - Friedrich Schiller invented him.
Cheers.
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