“Initiative 99%”: an enticing but misleading title

The 99% initiative, launched by the young socialists, is on the agenda for the votes on September 26. According to its initiators, it aims to overtax the capital income of the richest 1% in favor of the remaining 99% who "work every day in offices, supermarkets or hospitals."

Who is concerned?

Reading this, one would almost tend to vote yes straight away. One would say to oneself that the big fortunes of this country could well make an extra effort. Then, one wonders... How are these 99% defined? What is the limit? How will they be taxed? The initiators' website mentions that "capital income of more than 100,000 Swiss francs will be taxed one and a half times more than income from work". One already intuitively says to oneself that with 100,000 balls of capital income, this already affects many more people than the 1% mentioned. Especially since, according to the initiators, capital income concerns "dividends, profits on shares, capital gains and interest".

We are starting to ask ourselves questions. To reach 100,000 francs in dividends and gains on shares sold, a nice jackpot is certainly necessary, but what about unrealized capital gains? The arguments are not very clear. What about small businesses for which capital income of 100,000 francs represents a low threshold and which have nothing to do with the richest 1%? The initiators claim that their text only affects individuals. We are willing to believe them, but this also means that the project concerns individual businesses. It all seems confusing.

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The text of the initiative 99%

To better understand, we will read the text of the 99% initiative:

The Constitution is amended as follows:

Art. 127a Taxation of capital income and income from work

1 Shares of capital income exceeding an amount defined by law are taxable at 150 %.

2 The additional revenues resulting from the taxation of capital income shares within the meaning of paragraph 1 at 150 % instead of 100 % shall be used to reduce the taxation of persons with low or medium incomes from work or to transfer payments in favour of social prosperity.

3 The law regulates the modalities.

The blur is in place

It's hard to make it simpler. Surprisingly, many of the arguments cited by the initiators are no longer present in the text:

  • The limit of 100,000 francs has been replaced by "an amount defined by law". So there is nothing to prevent much smaller incomes from being taxed, which could concern any small saver.
  • The concept of capital income is not clear at all. What are they? Interest, dividends, coupons, rents, real estate capital gains, gains on the sale of shares, unrealized capital gains...? This can start to add up, especially since Switzerland is one of the few countries that already applies a wealth tax.
  • No distinction is made between a natural person and a legal entity, contrary to the arguments of the initiators. Any company can therefore be affected, which will heavily penalize them.
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Reading this text, we realize that it is not at all clear. The name of the initiative is misleading. It concerns infinitely more people than these evil 1% who monopolize all the wealth of the country. The beneficiaries of this tax are not obvious either: "low or medium incomes" (that is more than vague) or "in favor of social prosperity" (we can already imagine that this means filling the AVS funds).

With the 99% initiative, we have the impression of an unnecessary additional tax. This levy will affect a much larger part of the population than the 1% announced. It will then be redistributed with a big watering can to just about anyone. Not to mention that it will generate significant and useless administrative costs in the process.


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1 thought on “« Initiative 99% » : un titre alléchant mais trompeur”

  1. Thank you for this article, I hadn't looked at the subject yet, but it already gives me some useful insight!

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