I’ve always had a soft spot for Switzerland. The nation’s decentralized structure shows the value of federalism, both as a means of limiting the size of government and as a way of promoting tranquility in a nation with several languages, religions, and ethnic groups. I also admire Switzerland’s valiant attempt to preserve financial privacy in a world dominated by greedy, high-tax governments.
I now have another reason to admire the Swiss. Voters yesterday overwhelmingly rejected a class-warfare proposal to impose higher tax rates on the income and wealth of rich residents. The Social Democrats did their best to make the hate-and-envy scheme palatable. Only the very richest taxpayers would have been affected. But Swiss voters, like voters in Washington state earlier this month, understood that giving politicians more money is never a solution for any problem.
Here’s an excerpt from Bloomberg’s report on the vote.
In a referendum today, 59 percent of voters turned down the proposal by the Social Democrats to enact minimum taxes on income and wealth. Residents would have paid taxes of at least 22 percent on annual income above 250,000 francs ($249,000), according to the proposed changes. Switzerland’s executive and parliamentary branches had rejected the proposal, saying it would interfere with the cantons’ tax-autonomy regulations. The changes would also damage the nation’s attractiveness, the government, led by President Doris Leuthard, said before the vote. The Alpine country’s reputation as a low-tax refuge has attracted bankers and entrepreneurs such as Ingvar Kamprad, the Swedish founder of Ikea AB furniture stores, and members of the Brenninkmeijer family, who owns retailer C&A Group.
It’s never wise to draw too many conclusions from one vote, but it certainly seems that voters usually reject higher taxes when they get a chance to cast votes. Even tax increases targeting a tiny minority of the population generally get rejected. The only exception that comes to mind is the unfortunate decision by Oregon voters earlier this year to raise tax rates.
Moral issues aside, I hope Swiss voters perhaps understood the tradeoff between immediate redistribution and the pernicious effect of a relentlessly compounding lower growth rate.
Switzerland is an island of hope in a fast declining continent. However, Switzerland is also in a very precarious position, surrounded by a declining EU empire which, in sharp contrast to the constitutionally decentralized Swiss, has resurrected the grossly obsolete notion that the key to prosperity is centrally planned harmonization and homogenization into one big economic empire. EU citizens, perhaps sincerely mislead, grossly misread American success and attributed it to, well… Union. Those poor EU denizens did not understand that America became most prosperous nation in spite of union, not because of it. They succeeded in spite of the only-partially successful homogenizing and harmonizing attempts of the Federal government, because Americans had the one time grand fortune of being endowed with an extraordinary amount of individualism and personal freedom at the creation of their republic. Now, that one time infusion all but used up, the US too seems to be catching up with Europe on their race towards economic marginalization, drowned by the emerging gigantic economic activity of 3 billion people in Asia who finally went from once dismal incentives to produce to now moderate incentives.
So Switzerland needs to be very careful. Declining Empires, and especially Collectivist Declining Empires, have the tendency to turn quite nasty in their death throes, a correlation that European collectivism has demonstrated many times. I certainly hope Switzerland escapes once again.
Extremely interesting post… It is the is the political class that is leftist, not the people. And since being leftist usually means increasing the power of the political class then it is not surprising that the political class so often is “leftist” (because it increases its own power).
I think the USA and Switzerland have such descentralized federal systems because in those countries the people actually has the power to limit the power of the political class… If the people has not such power, the political class increases its own power transforming federal systems into extremely centralized systems.
[...] central government is smaller than the local/regional governments. This is one of the reasons why Switzerland is so admirable, as partly explained in this Center for Freedom and Prosperity article on the Swiss tax [...]
[...] central government is smaller than the local/regional governments. This is one of the reasons why Switzerland is so admirable, as partly explained in this Center for Freedom and Prosperity article on the Swiss tax [...]
[...] out that the residents of Zug are not some sort of anomaly. The rest of Switzerland is filled with people who recognize the value of limited government. …the Swiss are mostly holding fast to their fiscal beliefs. Last November, in a national [...]
[...] out that the residents of Zug are not some sort of anomaly. The rest of Switzerland is filled with people who recognize the value of limited government. …the Swiss are mostly holding fast to their fiscal beliefs. Last November, in a national [...]
[...] I’ll be very curious to see what happens this November when the people of California vote in the referendum. Will they be like the morons in Oregon, who approved a class-warfare tax hike? Or will they be like the voters of Switzerland and reject class warfare? [...]
[...] I’ll be very curious to see what happens this November when the people of California vote in the referendum. Will they be like the morons in Oregon, who approved a class-warfare tax hike? Or will they be like the voters of Switzerland and reject class warfare? [...]
[...] I’ll be very curious to see what happens this November when the people of California vote in the referendum. Will they be like the morons in Oregon, who approved a class-warfare tax hike? Or will they be like the voters of Switzerland and reject class warfare? [...]
[...] clear example of Switzerland’s sensible approach is that voters overwhelmingly rejected a 2010 referendum that would have imposed a minimum federal tax rate of 22 percent on incomes above 250,000 Swiss [...]
[...] clear example of Switzerland’s sensible approach is that voters overwhelmingly rejected a 2010 referendum that would have imposed a minimum federal tax rate of 22 percent on incomes above 250,000 Swiss [...]
[...] among the cantons ensures that sub-national tax rates don’t get too high. Because of these good policies, Switzerland completely avoided the fiscal crisis plaguing the rest of the [...]
[...] taxes could be hiked to allow more spending, but that hasn’t happened. The Swiss are very good about voting against tax increases, so the politicians don’t have much ability to boost the revenue [...]
[...] veille à ce que les différents taux d'imposition ne soient pas trop élevés. En raison de ces bonnes politiques, la Suisse est épargnée par la crise financière qui sévit dans le reste du [...]