It was only 9 years ago when the Swiss electorate rejected the then inheritance tax initiative (to finance the AHV) at the ballot box. While the purpose at that time, namely the financing of the AHV, was still relatively clearly defined, the new JUSO (Young Socialist Party) Switzerland initiative aims to protect the climate in general with these new tax millions.
In addition to the prohibitive tax rate of 50 %, the retroactive application to all inheritances and gifts from the date of the initiative’s possible adoption has caused a stir. Following prominent statements from well-known business families and an interpellation by NR Daniela Schneeberger, the Federal Council clearly stated in its response on 21 August 2024 that retroactive application or exit taxation was out of the question. We assume that the Federal Council will explain this again in detail in the dispatch on the initiative, which should be published in February 2025.
Various renowned economists have shown that the initiative has the potential to cause major economic damage by targeting only the largest taxpayers and wealthiest private individuals.
In addition, the initiative also leaves many questions unanswered from a tax system perspective. The fact that the proposed inheritance and gift tax is to be a federal tax is also completely uncharted territory, as only the cantons have levied inheritance and gift taxes in Switzerland to date. The initiators also state that the cantons’ right of taxation would not be affected or restricted by the new tax. This means that in a specific case, the tax burden on an estate can easily exceed 70 %, depending on the case constellation and canton.
Let’s hope that in the referendum, which is expected to take place in 2026, the electorate will once again clearly say no to this nonsensical initiative.
