Will Zurich experience a flight of wealth?

Published on Swiss.Info.ch, by Matthew Allen, July 10, 2009.

A decision by Zurich voters to end tax breaks for rich individuals has led to speculation over who will leave, with other cantons queuing up for their revenues.

Cantons as far afield as Graubünden and Geneva say they have received enquiries from some disgruntled well-heeled Zurich inhabitants but nearby Zug and Schwyz are expected to take the lion’s share of defectors.

At the end of 2008, 201 wealthy individuals on so-called lump-sum taxation deals contributed some SFr25 million ($23 million) to the canton’s coffers. But voters decided in February to end the preferential tax treatment from the beginning of next year … 

… More challenges:

Zurich is not the only canton to face a challenge to its preferential treatment of the rich.

Obwalden’s decision to introduce a regressive rate of income tax was struck down by the Federal court last year while its recent plan to set aside prime land for the wealthy to build houses has also attracted criticism.

The centre-left Social Democrat party in Zug has put in a formal objection to lump sum taxation to the cantonal government and is trying to stimulate a similar public initiative that was successful in Zurich.

In addition, questions are being raised around the country about some lump sum tax beneficiaries breaking the rules by conducting their business activities in Switzerland. (full text).

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