Not really following Swiss politics very closely, I just heared today about the 99% inititive that is up for vote next month.
The quick things I’ve read, say they want to heavily tax dividends and capital gains, but I didn’t figure out if that’s really only for the top 1%, or whether plebs like us would also be affected.
Anybody insights into this – as well as on the chances it passes?
It’s unlikely to pass (it already doesn’t pass on polls and initiatives tend to lose support as the vote gets closer).
Sounds good – assuming, without knowing the details, that it would increase taxes for those who invest instead of consuming all.
Anyone with dividends/RE income above 250k/year should get taxed 150% income instead of 60-100%.
This initiative wouldn’t affect us.
what does it mean “should get taxed 150% income” ?
49% no, 45% yes according the opinion poll quoted here, doesn’t sound conclusive yet. I bet it will be more than 50% yes in Geneva and Suisse Romande cantons (80% of socialist and green voters support it)
Thanks for the link – amounts seem ill defined in the initiative, so even if accepted, lots of possibilities for politicians to meddle around. I guess I will only start worrying once my yearly dividend and capital gains amount to over 100k. 
If I understand it correctly, if you have a dividends/RE income above 250k/year they would tax the first 100k as if it was income from a job (as it is today), but the remaining 150k income would be taxed as if you had earned 225k, i.e. they multiply it by a factor of 1.5.
So your tax bill for dividend/RE income would be as if you had earned 325k
Agreed. But maybe the next initiative will, or the next after that.
Sometimes I wonder how things will turn out, long term, in Switzerland. And in Western Europe, for that matter. Will it even be possible to FIRE?
I wouldn’t worry too much. It seems that, with very few exceptions, draconian tax measures are very fast ofset by mitigating regulations in most civilized countries. We might not be part of the 1%, but since we apply some of the same principles towards wealth building and obtaining income I think we have a powerful and savy ally…
It’s evident that taxation is a necessary evil to keep societies running; and whereas I’d personally think the only taxes should actually be on consumption, I can live with some taxes on income and capital.
Why would it not be possible, it’s not like it’s taxed 100%.
It is a problem that income from capital is generally less taxed than income from work. This tends to increase inequalities over time (which can be one reason for societal failures). Might be a good idea to at least close the gap so that they’re treated the same (or handle wealth tax differently).
That said, to go back to the initiative as mentioned there’s ~no chance of passing, it typically doesn’t gain support overtime but loses some (also the no side is already way more crystalized).
It doesn’t actually define any amount where it would kick-in and doesn’t clearly state that regular capital gains would now be taxable. Given that even if it passed (it won’t) it would have no teeth and likely only impact dividend for retail investors (at a very high threshold, who here gets over 100k+ of dividends?)
I do not know about you guys, but I kind of like the fact that I do not need to live in a gated community to be safe. I see a lot of anti tax resentment there, but in the end it is - at least mostly - used pretty efficiently to keep up a good infrastructure and level of state services.
Furthermore, a good and efficient welfare system has been proven to benefit to the society as all. Otherwise, we might be victim of the next opioid crisis like in the US, which will cost much more to us as a whole.
I mean sure, pay the streets by your own, but I guarantee you you won’t get far with your Porsche without scratching the bottom or get the windows smashed in a riot. Just remember the socio-economic disaster of Great Britain during the Thatcher years.
Finally, tax breaks like the 3a is clearly benefitting the rich more than the poor, but I guess that is ok with some people here.
Sure, like everyone’s money is only gained through hard work.
The main problem I see with this initiative - as I understand it - is the 1% of people to whom this applies should be already be paying ~40% marginal tax on dividends and interest. With this initiative they would pay 1.5x = 60%
My opinion is that forcing anyone to give away more than 50% of their income to others is too much, especially in a wealthy country. I accept others may have different politics. Regardless, 60% is so high it would have a perverse effect because the 1% of wealthy would be super incetivised to find ways to avoid it e.g. leave Switzerland, change to investment structures involving capital gains instead of dividends or interest, etc
I wonder if it could even have unintended consequences: if the principle becomes that interest is taxed @1.5x tax rate, then shouldn’t debt interest be deductible @ 1.5x too ? => the leveraged wealthy pay less tax than before 
You know this is not true, right? Or you thin the child of a prostitute will have the same chances of the child of a bank manager?
The average manager’s child is likely ahead of the average you. Your current life situation is heavily influenced by luck, everyone’s is. This sums it up nicely: Is Success Luck or Hard Work? - YouTube
Just a question, did you know that Switzerland is a federal country, and you are only looking at the Country level expenses. So basically I have to call out bullshit on your statement.
Just throwing statistics around you whithout being able to interpret them, classic on how the rich are getting robbed by the poor. Furthermore, it says in the text that 13 Billion of Social Welfare is a one off for Corona, so you have to put the number back into perspective.
Now back to the facts (2019 numbers : Wofür Zürich 25 Milliarden ausgibt | Tages-Anzeiger (tagesanzeiger.ch))
In Canton Zurich, the biggest portion by far is education, about 26%, Healthcare 21%, only 15% going to social welfare, 12% to equilibrate with other cantons (wait, does that mean I have to finance the street in Canton Zug ? I would call that a robbery so they can get rich people by lowering their taxes), 10% for traffic, 9% for safety.
Unfortunately I could not find the numbers for the town Zürich which is the biggest chunk where you would pay taxes too.(at least easily digestible, only behind a paywall. If anyone has them, I would be actually pretty interested out of own curiosity.
Jealousy Jealousy, we can also turn it around and say that some people are fucking greedy bastards. It is just a question of perspective.
Right, because there was access to free education right ? and probably some little social welfare (Prämeinverbilligung etc.) ? Not turning down your achievements, but you above all should understand that help is needed to get to it. Spoiler : you did it not alone, even if you would like to believe it, someone else paid for a large part of your human capital invested into you.
Look, far away of being a commie here, but data says :
a/trickle down effect is an invention of neoliberals. It could have never been proven by data
b/a social safety net is beneficial to the whole of society. Just to avoid that they are lost forever. Thatcher, Reagan and all that neoliberals experiments show how shitty it gets when that is cut off.
c/Right now, about 80% of wealth is inherited. Most of the wealth is held by a few people, getting access to political rights etc. which makes it possible to get even richer. We are in a kind of death spiral of wealth accumulation.
Sometimes, a comic speaks louder than my words could. I’ll let Toby Morris illustrate my thoughts on this one:
Income from capital isn’t taxed at the same rate as income from work.
There is no tax on capital gains. Wealth tax + tax on dividends is less on the average return on equities than what you pay on your salary.
The initiative will affect maybe 0.5% of the population in a negative way.
The young socialists argue that capital gains will be taxed with the initiative, but the text is pretty clear that the parliament will be responsible for defining the what capital income will be. It is guaranteed that capital gains won’t be included and that there will be exceptions for real estate you inhabit.
Income and wealth are 100% luck.
The ability (this includes work ethics and your ability to improve your work ethic) to create wealth is unevenly distributed. Nobody has any control over how much of this ability they will get.
Taxes are necessary step to reduce this inequality, however it has an impact on the ability to create wealth for the ones who got lucky.
How and in what form taxes are levied is an optimization problem. At some point higher taxes will have a bigger negative impact on the net wealth creation so that the net well being is reduced.
However I think we are still quite a bit away from that point. The 99% initiative is probably quite an efficient way to increase taxes without affecting the incentives to create wealth in a meaningful way.
Would anyone here be willing to take on less risk in your asset allocation, if the taxes on capital income would be higher for you?