Billions in income through small taxes: can this miracle tax close the pension gap?

Leah HartmannPolitics Editor

A small tax – with a huge effect: the idea with which the center wants to finance the 13th AHV pension sounds almost too good to be realistic. In the future, a portion of every stock purchase and all other transactions on the stock exchange will go to the state.

The proposal has broad support among the population, research shows. No other measure is more popular. But how would such a tax actually work? And what are the risks?

The idea of ​​a tax on financial market transactions has haunted politicians and the business world for decades. The principle: Every movement on the financial market – such as buying a share or selling a bond – is subject to a small tax of, for example, 0.1 or 0.2 percent. Considering the enormous number of transactions that take place every day, the mini-levies amount to billions in revenue for the state.

What needs to be distinguished from this is the idea of ​​a micro tax on all financial transactions – for example on wage payments or if you give your girlfriend your share for having dinner together. A popular initiative called for this a few years ago, while at the same time, for example, abolishing VAT. It failed because not enough signatures could be collected.

However, such a tax on all money movements goes too far for the Center, which is currently pushing the demand for a transaction tax. “It is clear to us that we mainly pay attention to large financial transactions,” says center faction leader Philipp Bregy (45).

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The most powerful argument of those in favor of a microtax are the numbers: in 2022, more than 50 trillion francs changed hands through the Swiss payment system Swiss Interbank Clearing, which covers the majority of transactions in Switzerland. Even a tax in the per mille range would raise billions.

With the sales tax, a stamp tax, there is already a transaction tax in Switzerland. The federal government received 1.5 billion francs in 2020. A general tax on financial market transactions would go much further.

A few countries have introduced such a tax. In France, when purchasing shares in French companies with a market value of more than 1 billion euros, 0.3 percent goes to the state. For high-frequency trading this is 0.01 percent. Italy and Great Britain also have taxes on financial market transactions.

However, there is currently no microtax anywhere on all electronic payment transactions. “It could allow us not only to finance the 13th AHV, but also to abolish VAT on basic food,” says Marc Chesney (64). The professor of financial mathematics at the University of Zurich was one of the creators of the microtax initiative – and is still passionate about the idea. There are already fees associated with all kinds of transactions. “People don’t talk about it much.”

The Federal Council, on the other hand, fears that the competitiveness of the Swiss financial center would be weakened. Economist Aymo Brunetti (61) from the University of Bern and Jan-Egbert Sturm (54), director of the ETH Economic Research Center, also express major concerns. “Since capital is highly mobile, there is a risk that a large part of transactions will shift abroad,” says Sturm. “The shot could backfire.”

Brunetti also warns: “If all countries do not introduce this tax at the same time, the entire activity will be moved abroad with the click of a mouse and there will be no tax revenue.” This is why the few existing taxes on financial market transactions “have an extremely large number of exceptions and are not very productive.”

The Council of States has already instructed the cabinet in 2022 to investigate what a tax on financial market transactions would look like and what it could achieve. While the SP has long campaigned for a microtax on financial market transactions to curb speculators, there is strong resistance in the bourgeois camp. “An introduction isolated in Switzerland is very questionable in terms of its benefits,” says FDP Vice President Andri Silberschmidt (30). We are now waiting for the conclusion of the Federal Council. But he makes it clear: “We will not extend a hand for a unilateral tax increase of any kind.”

The government report should be available by the summer. It should then become clearer whether the tax miracle could actually be a possible solution – or whether it remains a dream.