99% Initiative September 2021

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?

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It’s unlikely to pass (it already doesn’t pass on polls and initiatives tend to lose support as the vote gets closer).

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Sounds good – assuming, without knowing the details, that it would increase taxes for those who invest instead of consuming all.

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Anyone with dividends/RE income above 250k/year should get taxed 150% income instead of 60-100%.

This initiative wouldn’t affect us.

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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)

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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. :blush:

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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?

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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.

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This is correct. See also (in german): Volksinitiative Besteuerung von Kapitaleinkommen - YouTube

Another attempt of people who try to steal other people’s money rather than going to work by themselves. It won’t pass. At least not this time.

It depends on us. Whether we accept and support this idiocy and continue to vote for people with such a (militantly-)leftish and socialistic mindsets/ideology or if we collectively stand up against it. It may not affect us this time, but if we always wait on the couch until it affects us, it will be too late one day.

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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?)

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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.

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Sure, like everyone’s money is only gained through hard work.

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I think not many people would say something against keeping up good infrastructure. The biggest problem is the welfare state and the redistribution of wealth. Just one example:

Ausgaben (admin.ch)

Welfare state is the biggest part of the federal budget and that’s nothing but a legalised form of robbery and disappropriation. It should be removed entirely and taxes lowered accordingly.

Yes, sure, why not? Actually rather than providing guaranteed AHV for everyone, the government should encourage more people to save for their pension on their own.

This is an argument that comes often along with jealousy. Yes, not everyone had to work hard. Some inherit a lot of money some get nothing. So what? That’s live. I will also not get something. But in Switzerland, everybody has the same chance as everyone else, education is provided basically for free. So everybody has the same chance to end up being rich if they take the right decisions in life. I think it’s fair that people who work hard for their money also have more in the end, not everybody needs to have the same wealth.

What is important that everybody has the same chances. What we do with that is everyone’s own responsibility. If someone decides to chill and that parties are the most important thing in life, well, fine, but don’t ask other people to pay or share their wealth with you later on. If you prefer to buy things you can’t afford and never save a penny, fine, but don’t ask later on other people to pay for your pension.

It is fine to collect taxes for commonly used things such as streets, security, the police, courts, etc. but it is morally wrong to force people to pay for others and collect taxes to maintain an inflated welfare state.

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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 :slight_smile:

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?

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Yes, I do. I’m an example. Well, my mother wasn’t a prostitute, but I had a difficult childhood and my father died in a young age, basically I had to do and earn everything on my own and motivate myself. I’m not rich (yet) but I have a really good life now and was the first person ever in my family with University education, so that tells me it is possible in Switzerland, even if you have to climb up from the bottom and fall several times on the way.

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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

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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.

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