Switzerland Rejects 50% Inheritance Tax Amid Wealthy Residents' Exodus Concerns

Switzerland, home to over 9 billionaires per million inhabitants, has decisively voted against implementing a 50% inheritance tax on its wealthiest residents following threats of exodus from affluent entrepreneurs. Official government data revealed that 78.3% of voters opposed the measure, with not a single canton supporting it amid a 43% voter turnout.

Finance Minister Karin Keller-Sutter commented on the outcome: "Voters have clearly rejected a risky fiscal policy experiment. Such a tax would have thrown our tax system out of balance and would have damaged Switzerland's attractiveness."

The initiative, proposed by the Young Socialists as a means to generate climate change funding, would have imposed the tax on assets exceeding 50 million francs ($62 million) that individuals gift or pass on through inheritance. The measure would have affected approximately 2,500 people—merely 0.03% of Switzerland's population.

The proposal faced strong opposition from the government and most political parties outside the left. Critics argued that the tax risked triggering an exodus of wealthy residents, potentially resulting in a net loss for the country's treasury.

Prominent business leader Peter Spuhler, Stadler Rail AG's top shareholder, was among those who publicly declared intentions to emigrate if the measure passed, stating that the tax would force the sale of his company upon his death.

Switzerland already maintains wealth taxes but distinguishes itself with more than nine billionaires per million inhabitants—five times the western European average according to UBS research. The country also offers special tax provisions for wealthy foreigners, allowing them to pay taxes without full disclosure of their assets. The financial benefits from hosting such affluent residents likely influenced Sunday's voting outcome.

Keller-Sutter revealed that during public debates on the proposal, numerous local officials, particularly from central Switzerland around Lake Lucerne—a known wealthy enclave—warned that rich residents were contemplating relocation.

The proposal's rejection alleviates concerns about Switzerland's standing as a premier destination for the wealthy. This reputation, cultivated through its banking industry's focus on high-net-worth individuals and favorable cantonal tax policies, faces increasing competition from emerging financial centers in Asia and the Middle East.

Swiss citizens, who participate in up to four referendums annually under the country's direct democracy system, have consistently supported business interests in previous votes. They have previously rejected proposals for stricter emission standards, additional vacation days, and a national minimum wage.

In a parallel vote on Sunday, residents of Fribourg canton similarly rejected a proposal mandating a minimum hourly wage of 23 francs ($28.60), with 53.5% voting against the measure.