Voters in Switzerland have rejected a proposal to introduce a tax on gains from dividends, shares and rents. The left-wing people’s initiative targeted the wealthiest group in the country.This content was published on September 26, 2021 - 16:20
Final results show 64.9% of voters and all of the country's 26 cantons dismissing the proposed constitutional reform, in some cases with up to 77% of the vote.
In five cantons, notably in western Switzerland, supporters of the initiative were more narrowly defeated.
The Young Socialists who had launched the proposal admitted defeat, accusing the political right and the business community of "scare mongering" to prevent a debate about "the horrendous inequalities in wealth distribution in Switzerland."
Ronja Jansen, president of the Young Socialists, said her group would continue to fight against an economic system that "rewards wealth more than honest work."
According to Sarah Wyss, a parliamentarian for the Social Democratic Party, the campaign made it possible to have a public discussion about taxes and growing disparities in distribution of wealth and income.
Finance Minister Ueli Maurer said the result of Sunday's vote showed that a majority of citizens was happy with the existing system.
He said the wealth distribution through progressive a tax rates on income as well as a wealth tax and social security benefits was "obviously sufficient to prevent a further opening of the gap between the rich and the less well-off".
Maurer also said at least seven other tax reforms were underway. "But any major changes, as targeted by the capital gains tax, are unlikely to be successful," he told a news conference.
The Young Socialists, supported by the Social Democrats, the Greens and the trade unions had hoped to increase tax on capital revenue by a factor of 1.5 compared with regular income tax.
Gains below CHF100,000 ($108,500) would not have been subject to the higher level of taxation. Social security benefits and income from self-employed activities would also be exempted.
Difficult tax votes
Urs Bieri, co-director of GfS Bern research institute said the clear verdict of Sunday's vote is in line with a history of unsuccessful proposals for tax reforms in Switzerland.
"But campaigners can still claim a small victory," he told SRF public radio. "They launched a debate about the issue and seems to have mobilised supporters also from outside the camp of the political left."
Nearly every proposal for an overhaul of the fiscal system over the past two decades was thrown out at the ballot box, notably plans by the political left to abolish lump sum taxation for the wealthy, the introduction of an inheritance tax or a previous attempt in 2001 to impose a capital gains tax.
It’s not that campaigners for the latest initiative hadn’t tried to win voters. They staged several events such as stunts by activists from bridges and on lakes and the publication of a book about wealth disparities in Switzerland.
Nevertheless, media attention for the vote issue remained below average as researchers from Bern University’s Annual YearbookExternal link found. The volume of political advertisement, almost exclusively from opponents, was moderate, political scientists say.
The vote on the same-sex marriage law, also scheduled for Sunday, had stolen the limelight of the left-wing campaign with its overtones of “class struggle”, observers noted.
During the campaign, Jansen, decried the “blatant social injustice” in Switzerland, where the small group of rich individuals own more than 42% of the wealth, while 99% of the population – hence the informal title of the “99% initiative” – share the remaining 58% of assets.
But most main political parties, the business community and the government said there was no need for a tax reform as disparities in Switzerland are modest compared with other countries. The country’s social security system was a sufficient to balance out inequalities.
Opponents argued approval of the initiative would jeopardise Switzerland’s prosperity and damage the sector of small and medium-sized companies, often described as the backbone of the country’s economy.
Loss of innovation and jobs would be inevitable, and the initiative was "leaving too many questions open", critics have warned.
Votes September 26, 2021
There were two separate issues of the national ballot papers on Sunday:
Voters decided on a law on same-sex marriage and on a proposal to introduce a capital gains tax in Switzerland.
It was the third of up to four sets of nationwide votes this year as part of Switzerland’s system of direct democracy.
About 5.5 million Swiss citizens, including registered expat Swiss, were eligible to take part in the votes.
There were also numerous ballots at cantonal and local levels on September 26.End of insertion