Cantons begin to see downside of low tax rates … For years they fought to offer the lowest tax rates but now some cantons in central Switzerland are questioning the wisdom of this rampant tax competition as the population boom that came with it weighs more heavily on local resources. The paradise that is central Switzerland is as much natural as it is fiscal: glassy lakes, snowy peaks, untouched natural beauty, and a state – cantonal – that only moderately taps individual income or business profits. These attributes cause foreign taxpayers to arrive in droves and the European Union to grumble that Switzerland as a whole is a tax haven. But now both Brussels and the cantons are suffering from the effects of this competition that saw the cantons, particularly in the 2000s, practically fall over themselves to outdo each other on lowering taxes, and the discontent is bubbling to the surface. Christian Democrat member of Schwyz cantonal government Othmar Reichmuth gave voice to the rising discontent late last year when in the local press he effectively posed the question: "What do we really want?" – SwissInfo
Dominant Social Theme: We need more taxes to create a truly human society.
Free-Market Analysis: We read in SwissInfo that Swiss officials are coming under pressure to raises taxes. Switzerland is one of the world's last remaining functional republics, with power truly flowing from the bottom up in many cases. But over the past decade, every part of Switzerland's demos has come under attack from a controlling power elite that needs to bring Switzerland in line with the rest of Europe.
Now Switzerland's low tax structure is being targeted. This is because top Western elites want the Swiss government to be engorged by money. The more money government has, the more power is exercised by the power elite that stands behind governments worldwide and controls their actions secretly via mercantilism.
In the recent past, Switzerland's tax secrecy laws have been eviscerated, the country has voluntarily removed itself from a quasi-gold standard regarding the Swiss franc and it has even made adjustments in its relationship to the European Union to make trade and emigration more feasible.
The struggle always is whether Switzerland's Low German population will stand alone and relatively free or whether they will be subsumed by the European morass of corruption, dysfunction, austerity and Byzantine socialism.
The elites intend for Switzerland to be subsumed – to a point. Switzerland is still a mighty country containing or managing a huge portion of the world's wealth via its private banking structure. No doubt this will continue but there will be increasingly a two-tier system.
Not only will the system be two-tier but it will be increasingly secretive and this will further corrode civil society. The power elite has always used Switzerland to hold gold and other assets but as transparency is thrust upon the Swiss, there will emerge a group of private banks (mostly) that will somehow be exempt from larger trends.
The tax pressure being focused on Swiss society is just one more effort in this regard. Here's more from the article:
Denouncing the collateral damage of low tax rates as an aging population (49 per cent of inhabitants in Schwyz are aged over 30), an additional 3,000 cars on the roads each year, perpetually rising rents and insurance premiums, and "trains and roads which are jammed morning to night", Reichmuth, a cheese maker by trade, answered his question thus:
"I don't need six-lane motorways, or managers with extravagant salaries, or foreigners who benefit from favourable tax treatment."
Reichmuth's comments set off something of a small bomb in central Switzerland, the shockwaves of which were felt through to December when citizens in the popular tourist destination of Lucerne accepted a three-point increase in tax rates. In financial trouble, Lucerne had been debt-free until 2007 and all political parties – with the exception of the far-right Swiss People's Party – agreed to the rise in taxes.
From one day to the next, Reichmuth became, without intending to, he says, a symbolic figure for a certain discontent among the central Swiss. A poll in the local newspaper Bote der Urschweiz found that for 57 per cent of voters in Schwyz, the population growth generated by the region's appeal was a "curse". Four years earlier, 55 per cent had qualified the increase as a "blessing".
Population growth across Switzerland has been particularly pronounced. Since 1972, central Switzerland (Schwyz, Lucerne, Nidwalden, Obwalden, Uri and Zug) has seen its population grow by some 40 per cent, according to the Federal Statistics Office. Only the Lake Geneva region has registered higher growth of 41.5 per cent across cantons Vaud, Valais and Geneva.
We can see from this a kind of perverse logic. The idea is that because Switzerland has low taxes, it is attractive to foreigners who are settling in Switzerland and stressing social and physical resources. It is a nonsensical argument, of course, but one that is being advanced seriously – first by Brussels and now within Switzerland itself.
Any society GAINS when wealthy entrepreneurs settle in its midst. And the logical answer to criticisms regarding this sort of situation would be to point out that dysfunctional societies with high tax rates ought to LOWER them. But this is not what is occurring within this particular conversation. Because Switzerland is functional and in demand as a location to which people want to emigrate, it must raise taxes and generally make itself a less attractive destination.
Another reason that forces inside and outside Switzerland are agitating for increased Swiss taxes is because in certain cantons "public budgets have lurched into the red, notably in Schwyz and Zug." In fact, we learn from the article that "Schwyz was one of those which abandoned its previously conservative budget policy to boost the police force and other sectors."
The obvious solution to stressed municipal budgets is to LOWER expenditures. But as in so many other parts of the West these days, the conversation does not include this option. Revenues need to be enhanced so the state can do more.
In Switzerland – the great exception – we can gradually see freedoms being whittled away as a concerted campaign to Europeanize Switzerland continues. Its historic insistence on bank privacy has degenerated, its currency has been debased, its republic attacked and now there is a good deal of agitation to raise taxes and expand government.
All these pressures provide us with a textbook example of how Western elites gradually expand government in order to control societies. Switzerland is being homogenized, in our view, to better integrate it into the world governance that the elites are promoting.
Here's hoping the Swiss find a way to resist these pressures and retain their freedoms and hitherto responsive and modest government.