Nidwaldner has an average of 1.5 million

Opinions differ on this question: how well do Switzerland and its inhabitants fare? The Federal Council is now providing additional material for this discussion.

Wealth is distributed unevenly

An analysis of the “wealth distribution in Switzerland”, released quietly and secretly by the state government in mid-December, concludes that from 2005 to 2018, the wealth share of the world’s wealthiest 1 percent in Switzerland rose from 38 percent to 44 percent. .

According to Marius Brülhart (55), professor of economics at the University of Lausanne, wealth in Switzerland is extremely unevenly distributed compared to other Western European countries. “Even in the United States, the wealth concentration of the richest 1 percent is not as great as in this country,” says the man who has studied wealth distribution for many years. The concentration of current assets in Switzerland – that is, without pension fund assets – is more comparable to countries such as Brazil, Mexico or Russia.

multiple reasons

According to Brülhart, there are many reasons why the wealth share of the super-rich has increased noticeably since 2005. “One reason might be low interest rates. They were less of a problem for the super-rich than they were for the middle class, because their wealth consisted of stocks and real estate that were rising in price.”

The fact that the inheritance tax for direct descendants has been abolished in many cantons in recent years may also play a role.

Brulhart: “Every second franc of wealth comes from an inheritance.” In 1990, an inheritance tax of 4.3 centimetres had to be paid for each franc inherited. Today, for every franc inherited, only 1.6 kurus went to the state. “The very wealthy family dynasties benefited the most from this.”

Different from canton to canton

However, the triumph of the super-rich is not the same across Switzerland. “Developments vary greatly in the cantons,” says the report of the Federal Council by the Federal Tax Administration and the Federal Statistical Office (FSO). Wealth inequality is particularly evident in the cantons of Central Switzerland.

Average net wealth per taxable person shows how large the cantonal differences are now. In the cantons of Jura, Friborg, Solothurn and Neuchâtel, this figure was below CHF 200,000 in 2019. In the three central Swiss cantons, on the other hand, the average net worth per taxpayer in the same year was more than one million francs: in Zug the average wealth of citizens was 1.1 million francs, in Schwyz 1.3 million francs, and in Nidwalden almost 1.5. million francs. million million francs.

In 2005, the gaps were even smaller. At that time, the average net worth was between 112,000 and 155,000 francs in Jura, Freiburg, Solothurn and Neuchâtel, and between 471,000 and 729,000 francs in Schwyz, Zug and Nidwalden. According to Brülhart, it is clear that tax competition between the cantons also benefits the rich. But that’s not the point for the welfare researcher: “The decisive question for the Swiss population is whether this competition is helping to attract the rich abroad or whether the cantons are stealing good taxpayers from each other.”

Brülhart and his team explored this direction for the canton of Lucerne. The result: International shippers contributed nearly one-sixth to the top 1 percent wealth share increase after wealth tax was halved.

Income well distributed

Unlike wealth, income is relatively well distributed. The Federal Council’s welfare report states: “Income inequality in Switzerland was below the European average.” “Redistribution in the form of state or state-regulated transfers” made a significant contribution to this.

In this context, Brülhart finds the development of the median disposable equated special interest income—that is, income relative to the number of people in a household. “This has increased steadily in working households since 2005. This is encouraging and contradicts the thesis that per capita welfare in Switzerland has stagnated in recent years.”

This brings Brülhart back to the welfare debate, where the advantages and disadvantages of immigration are hotly debated. In connection with this debate, critics like to point out that gross domestic product (GDP) per capita has grown more slowly in recent years than in other countries. Therefore, the situation of individual citizens has developed less favorably. The new report from the Federal Council now shows that this is only part of the truth.