Inheritance tax for Young Socialists: politics must say things clearly

On January 20, 2025, the Commission on Economy and Taxes of the National Council (CER-N) will begin examining the popular initiative of the Young Socialists “For a social climate policy financed in a fiscally fair manner (initiative for the future). Like the Federal Council, the economy resolutely rejects this proposal. We can also expect a clear position from Parliament. Indeed, the initiative of the Young Socialists is damaging in several respects:

• The initiative would destroy mid-sized businesses: The 50% tax provided for inheritances and donations, once the threshold of 50 million francs is crossed, considerably compromises the transmission of medium-sized Swiss family businesses to the next generation. Many businesses are expected to be sold because the cash to pay the tax is not available, with the funds being invested in the business. This would often result in redemptions by investors favoring return objectives. The model of the company run by its owners over several generations, and thus well rooted locally, is therefore threatened.
• The initiative would result in a sharp drop in tax revenue: In reality, according to the Federal Council, if the initiative were to be accepted, 100% or almost of the fortunes concerned would leave Switzerland. This would lead to tax losses amounting to billions of francs at all levels of the State. Instead of increasing tax revenues, the initiative would lead to losses. The middle class would have to fill the gaps, or state benefits would have to be cut.
• The initiative encroaches on cantonal powers: The initiative would weigh heavily on the cantons’ inheritance and gift taxes and would cause the Swiss economic center to lose all attractiveness in international comparison. Wealth tax revenue, which plays an important financial role for the cantons, would also be affected. The Confederation has its own fiscal powers and should not encroach on the sovereignty of the cantons.
• The initiative violates fundamental constitutional principles: The initiative undermines fundamental legal principles such as the universality of taxation and economic freedom and freedom of establishment. Furthermore, the retroactive application of implementing provisions creates great legal uncertainty and threatens confidence in the rule of law – the validity of the initiative is questionable. Overall, the initiative is damaging to the economic center and encourages those affected to draw up exit plans.
• The initiative does not help in any way, on the contrary, climate policy: The initiative uses climate policy as a pretext to induce radical change in the economic system. Switzerland’s climate policy enjoys popular support. Swiss companies make a significant contribution to sustainability, particularly in the area of ​​research and development. The initiative would undermine these efforts without bringing about improvement.

A vast alliance is already committed against the initiative. Under www.jss-non.ch you can actively engage against this harmful initiative and keep yourself informed of the latest developments and actions via the newsletter. Participate!