‘Solidarity tax’: Should the wealthiest Swiss pay more to help country overcome coronavirus crisis?

'Solidarity tax': Should the wealthiest Swiss pay more to help country overcome coronavirus crisis?
Taxes are not likely to increase in Switzerland. Photo by Fabrice Coffrini / AFP
A Swiss politician is suggesting that rich individuals should be the ones to assume the costs for the health and economic crisis caused by the coronavirus pandemic. Is this likely to happen?

The coronavirus pandemic has taken a huge toll on Switzerland, not only health-wise but also financially.

While the exact figure is not yet known, the Swiss Economic Institute (KOF) has calculated that, at best, Switzerland’s economy will lose 22 billion francs between March and June of this year. In the worst-case scenario, the loss will be much higher, reaching 34 billion francs. 

READ MORE: UPDATE: What you need to know about the coronavirus crisis in Switzerland 

Christian Levrat, president of the Social Democratic Party, has a solution to recover the losses: he wants to make the rich pay the bill.

“The crisis must be paid for by those who made profits during the pandemic”, he said in an interview

“We want to create a fund fed by a solidarity tax”, Levrat added, explaining that the highest earners should be subject to an additional 10 percent federal tax for a certain period of time.

“Only people with taxable income of more than 300,000 francs would have to pay”, he said.

Asked whether the wealthy people will leave Switzerland if they would have to pay more taxes, Levrat replied that “the situation will not be better elsewhere”.

The maximum federal tax rate imposed on the highest Swiss earners is 11.5 percent, so according to Levrat’s idea, the wealthiest people would have to pay 21.5 percent of their income to cover the costs related to the pandemic.

There is no reaction yet to Levrat’s proposal, but taxes are unlikely to increase.

Although “the coronavirus pandemic has had an unprecedented impact on federal finances, Switzerland's low government debt means that the country is in a sound financial position”, the Federal Finance Administration (FFA) said. 

According to FFA ,“the debt brake is designed to be flexible in exceptional circumstances and allows for considerable additional expenditure. It contains an exemption for uncontrollable contingencies, such as severe recessions, natural disasters, acts of war and other exceptional events”.

 

 

 


 


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