Yet, in an article criticizing incomplete calculations, they fail to mention that you’d typically generate (taxable) income out of the capital withdrawn, along with being taxed on wealth, at least on Cantonal level

Well, we can just assume that the withdrawn capital is consumed at the same rate as a hypothetical pension. This can give an estimate for the wealth tax. We can also assume various level of returns on the remaining capital. For the annuity option, we just assume 0 wealth tax and total consumption.

So if the return on remaining capital is 0, and 5% is consumed yearly, the average taxable wealth in those 20 years would be 400’000. Assuming modest 0.25% wealth tax, it would be extra 20’000 taxes paid in those years.

This all points to the government proposal lacks critical thinking

They need to be clear what they want to do

increase tax (easiest to define in my view)

Reduce tax benefits for voluntary contributions (would be disastrous if applied retrospectively)

Reduce tax benefits for capital withdrawals versus annuity (then use right numbers to get to parity). And who is to say if more people would choose annuities then pension funds wouldn’t collapse ?

I find the comment “remove loopholes” a bit weird. For anyone to take advantage of 2nd pillar, one needs to have pension gap. If someone close pension gap, then how come it’s loophole? It is exactly what closing pension gap provision is supposed to do anyways

The only loophole I can imagine is staggered withdrawals using VB or 3a. But even that, I don’t know if that’s a loophole or a law.

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