In many countries around the world, governments are intensifying their pressure on the rich. In the canton of Geneva, Switzerland, the state announced that it wants to increase the amount of wealth tax it wants to collect from citizens with assets over 3 million francs from 1 percent to 1.5 percent for a period of 10 years.
While the aforementioned bill submitted to the referendum was supported by the left parties and unions in the parliament, the main purpose was determined to increase the tax revenues that decreased with the pandemic.
“We have serious problems in areas such as health, economy and the environment and we need to take action,” the statement said. In the call, it was stated that the burden in these areas was predominantly on the middle class.
While business organizations strongly opposed the bill, 55.2 percent of the people voted no in the referendum held in the city on Sunday. Many wealthy people were expected to move to different parts of Switzerland if the law was passed. According to official figures, 19 thousand of the 500 thousand citizens living in Geneva are millionaires.
GENEVA GIVES BUDGET SURPLUS
It is estimated that 4,200 to 10 thousand of these 19 thousand people have a wealth of more than 3 million Swiss Francs. Those who oppose the bill state that the Geneva government runs a budget surplus every year. Nathalie Fontanet, the canton’s Minister of Economy, said:This bill was given at the time of Covid-19, our tax revenues have increased in the past years” he uses.
Oslo, the capital of Norway, is not a favorite place for the wealthy these days.
Norway increased its additional wealth tax on the wealthy from 1 percent to 1.1 percent last year. Even an increase of only 0.1 percentage points caused many rich people to take their wealth out of this country. Vincent Subilia, President of the Geneva Chamber of Commerce, said, “We do not want to experience the Norwegian syndrome. This demagogic and ideological vote must be postponed. “The wealthy people of Geneva are being put in danger,” he said.
BIDEN: I WILL GO MORE ON THE RICH
Increasing taxes on the rich is also a very popular topic in the US today. A significant part of US President Joe Biden’s 2024 campaign is the promise to tax the rich more. Elon Musk, the richest person in the world, thinks that this will harm the middle class.
“The burden of government overspending will fall on the middle class,” Musk said. They cannot escape the taxes that are cut without receiving their salaries.” Biden specifically addressed the unionists at a rally last weekend, promising to go more on the wealthy on taxes.
As of 2021, only 5 of the 36 OECD countries have a wealth tax. These are France, Norway, Spain, Switzerland and Colombia. Although many countries do not apply an extra tax as wealth tax, as in Turkey, for example, as salaries of wage earners increase, they enter the higher tax bracket and pay a significant part of their gross salary as tax.
In Belgium, people who keep assets of more than 500 thousand euros in banks deposit 0.15 percent of these assets to the state as annual tax.
30 MILLIONARIANS ESCAPE FROM NORWAY
Returning to the Norwegian example mentioned above, 30 millionaires left the country in 2022 due to the increase in wealth tax. This is more than the number of millionaires leaving the country in the last 13 years. A significant number of these people who came out of Norway moved their wealth to Switzerland, where there were relatively low taxes.
Norwegian businessperson Kjell Inge Rokke, who has a net worth of approximately $2 billion, said, “I chose Lugano as my new home. Not because there are lower taxes, but in a very central spot in Europe. I am close to Italy. I am one click away from many of my companies.” Rokke was Norway’s top taxpayer in 2021. According to Ole Gjems-Onstad, a Professor at the Norwegian Business School; Norwegian citizens are not too happy about the best investors going abroad.
Sources: Bloomberg, The Guardian, Dagens Naeringsliv, OECD, Kriptokoin.com
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