Switzerland, home to an estimated 110 billionaires and even more multimillionaires, is at risk of losing a large part of its population as the ultra-rich prepare to flee the country in fear of a new tax proposal.

Yes to tax

The JUSO (Socialist Youth), part of the Social Democratic Party, is determined to introduce a law that would impose a 50 percent inheritance tax on all residents with assets of more than 50 million francs (€7 million).

JUSO Vice President Melanie Rufi told the press that the wealthy must be held “accountable” for climate change, as they “contribute enormously to climate destruction through their investments and consumer behaviour.”

The party has now collected 109,988 signatures (of the required 100,000) and submitted them to the Federal Chancellery for verification in March of this year.

The Socialist Youth has estimated that the tax would generate 6 billion francs (€914,694,103) in revenue for both the government and Swiss citizens. “With the initiative for the future, we are ensuring socially fair financing of climate protection,” the party’s vice-chairman said.

No to taxes

While the left wing of the Swiss parliament fully supports the initiative, MPs from other parties are concerned about the consequences for the local economy.

“Switzerland clearly needs rich people, as more than 50 percent of tax revenues come from the super-rich,” said Elisabeth Schneider-Schneiter, the representative of the Center Party. “If we chase away individuals with strong fiscal capacity through radical laws, finances will ultimately have to come from the middle class.”

According to Michele Blöchliger, a member of parliament from Nidwalden, a region where Switzerland’s wealthy live, “the first departures have already taken place.” Zurich MP Erns Stocker also told local press that the wealthy are already “planning to move.”

Peter Spuhler, CEO of major Swiss company Stadler Rail, said the tax would cause “enormous damage” to Switzerland and cause the country to lose its leading position in the world of international business.

He estimated that he would have to pay between 1.5 and 2 billion francs (up to €304,898,034) alone and declared that he would flee Switzerland “at least temporarily before the vote” and remain abroad if the initiative were approved.

What is needed?

In order to become law, the initiative must go through several stages. First, there will be a parliamentary consultation and recommendation, which will probably last until at least 2025. Therefore, the decision will not be taken until 2026, and even then it would need the support of the majority.

Despite this, many wealthy Swiss are already moving abroad. Norwegians who fled to Switzerland out of fear of their country’s high taxes are preparing for a new country that welcomes the ultra-rich.