“Zero Chance to Pass”: Switzerland to Vote on 50% Inheritance Tax This Fall

Moustafa Daly
Cairo

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Philippe May asserts that the proposal will “fail colossally”, while Yamin Fouzi warns of potential reputational damage.

Swiss citizens are set to vote this fall on an inheritance tax proposed by the far-left Young Socialist Party (JUSO). The initiative aims to impose a 50% inheritance and gift tax on estates exceeding CHF 50 million (approximately €54 million) to fund “climate action.”

Straight off the bat, the proposal appears to be facing significant opposition. Philippe A. May, Founder and CEO of EC Holdings, predicts the initiative will “fail colossally” at the ballot come fall and that it has “zero chance” of passing.

“Swiss people will never approve this,” says May, describing the proposal as extremist and fringe by Swiss standards. He notes that most political parties, politicians, and media outlets oppose the initiative. May also points to Switzerland’s history of rejecting high-taxation policies, such as the attempt to abolish the tax-friendly forfait fiscal, which passed only in Zurich in 2009 but failed to pass in any other canton where it was put to vote.

Zurich-based Yamin Fouzi, Senior Investment Migration Advisor at Fouzi Consulting, shares May’s scepticism. He describes JUSO as a party that has “built a reputation for targeting high-net-worth individuals (HNWIs)” with legislative proposals that “rarely resonate” with the broader electorate.

History of Rejected Proposals

JUSO, which is affiliated with Switzerland’s largest left-leaning party, the Social Democratic Party (SP), has consistently pushed for more radical reforms that often fail to gain traction, says Fouzi, nodding to the party’s 2013 “1:12 initiative” which sought to cap executive salaries at no more than 12 times the lowest-paid employee’s wage. Swiss voters overwhelmingly rejected the proposal.

Fouzi argues that “Swiss voters don’t care for socialist concepts like ‘fair share’ taxation” and that the electorate is wary of the potential risks such policies pose to Switzerland’s global reputation as a hub for global UHNWIs, which “they know is a cornerstone of the Swiss economy.”

Moreover, May explains that the Swiss electorate fears approving such an “outlandish” inheritance tax could set a precedent, potentially leading to lower thresholds in the future that might impact them even if they do not possess great wealth.

Wealthy Swiss Enraged

The proposal has also drawn criticism from prominent figures, including Swiss billionaire businessman Peter Spuhler, who Fouzi says has publicly stated he would consider leaving Switzerland if the tax were implemented. Fouzi contends that even such statements, though hypothetical, have the potential to harm Switzerland’s reputation.

Media reports highlight similarly strong opposition from wealthy individuals and businesses. Currently, the richest 1% of taxpayers control 45% of the country’s total wealth and play a significant role in public finances. The top 10% of earners contribute 53% of all income tax revenue, making any potential exodus of UHNWIs a serious concern for the Swiss electorate.

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