Multimillionaires and entrepreneurs in Switzerland have threatened to leave the country because of an inheritance tax proposal submitted by the Young Socialists (JUSO). Swiss cantons fear that even if the referendum has little chance of succeeding, the prospect of it being voted on is enough reason for many wealthy people to move away.

50 percent inheritance tax for the super-rich proposed in Switzerland

Our story starts with the “Initiative for the Future” plan, which earned enough signatures to become a referendum in 2023 and was submitted to federal officials in Bern in February 2024. The proposal, submitted by JUSO, would impose a 50 percent inheritance tax on all people whose wealth exceeds 50 million francs. In this case, wealth refers to both personal assets and those held by family-run companies.

Writing back in 2023, JUSO argued that the proceeds from such a tax would allow Switzerland to push forward with its environmental goals. JUSO Vice President Mélanie Rufi told reporters that the rich are “responsible” for climate change and “contribute enormously to the destruction of the climate through their investments and consumer behaviour.”

“With the initiative for the future, we are ensuring socially fair financing of climate protection,” she concluded. JUSO estimates that the tax would generate 6 billion francs in income for both the government and Swiss cantons. 

Threat of inheritance tax enough for entrepreneurs to move away

While polling suggests that Swiss citizens would almost certainly reject the proposal at the ballot box, the threat of the referendum has convinced several entrepreneurs that they have to leave. Speaking to SonntagsZeitung, Stadler Rail head Peter Spuhler said that the referendum would cause “gigantic damage” to Switzerland as a place to do business, estimating that he alone would have to pay between 1,5 and 2 billion francs.

“As an entrepreneur, I already pay taxes three times: first the profit tax, then the income tax and finally the wealth tax. After that, there are just under 50 rappen (centime) left from one franc, in Zurich even only 40. The inheritance tax would be the fourth. It would halve the remaining amount again,” he argued. 

Spuhler concluded that he would be moving away from Switzerland “at least temporarily before the vote” and would make his departure permanent should the plan be passed. Though their threats are currently more words than action, Ypsomed founder Willy Michel, logistics magnate Hans-Jörg Bertschi, and entrepreneur and SVP National Councillor Magdalena Martullo-Blocher confirmed that they also considering moving away because of the proposal.

Swiss cantons worry about super-rich exodus

Swiss cantons are also worried about an exodus of the super-rich: on July 13, Canton Nidwalden finance director Michèle Blöchliger confirmed that several of its multimillionaire residents have started to emigrate. "We appeal to tax customers to wait before moving away," she added, confirming that the canton was in constant discussions with their super-rich residents about any financial concerns.

Indeed, SonntagsZeitung found that Nidwalden would be most affected by rich people leaving, with 22,2 residents per 10.000 people having assets over the 50 million franc limit. Cantonal tax officials told the newspaper that it would lose 20 percent of its tax income if their super-rich residents left. Zug (18,9 per 10.000), Schwyz (17,6 per 10.000) and Geneva (8,9 per 10.000) would also be heavily affected.

Calls for Swiss government to scrap inheritance tax referendum

As a result of the threat, several business and political leaders have called on the Federal Council and Finance Minister Karin Keller-Sutter (FDP) to either declare the referendum invalid or at least provide a guide as to how the tax would be implemented so that entrepreneurs can prepare. However, the latter is not likely to be forthcoming, with a spokesperson confirming that we will have to wait until February 2025 before federal authorities will comment on the proposal.

Writing in the Tages-Anzeiger, business editor Simon Schmid noted that while the chance of the vote passing is “tending towards zero… the demands are indeed extreme.” “But that should not be a reason to put the issue aside,” he continued, arguing that as the country faces budget cuts, a rapid and necessary transition to net zero and funding issues related to pensions and social security, “it is only logical that the rich will be asked to pay more for it than the poor. There is no other way.”

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