Geneva votes to introduce new tax on top 1%

The new tax was a pandemic-era idea when the country's budget was in deficit. Geneva authorities fear that he will force the richest residents to leave, already providing most of the tax revenues to the city budget Views of Geneva

In Geneva, on June 18, a vote will be held, which will decide the issue of taxes for the 1% of the richest residents of the city, BLOOMBERG reports .

Residents of the city-canton will be asked whether to impose an additional "solidarity tax" over the next decade for those who own more than 3 million francs ($3.3 million).

Geneva is the second largest city in Switzerland with 506 thousand inhabitants, of which more than 19 thousand are millionaires. The proposal to raise the tax will affect a smaller number of people, from 4 thousand to 10 thousand people - about 1% of the city's residents.

The idea to introduce such a tax is a legacy of the CORONAVIRUS pandemic, writes Bloomberg. During this period, discussions flared up in Switzerland and elsewhere on how to restore balance in a society where inequality deepened between rich and poor.

The peculiarity of this vote is that in Switzerland there is already a tax for the richest. According to think tank Avenir Suisse, the tax for Geneva's richest residents is around 1% per annum and is already one of the highest in Switzerland. The new tax will actually raise it to 1.5%. At the same time, thanks to the difference in the size of the state, the richest residents of the city provide most of the tax revenues to the city treasury. For example, last year, the city's richest taxpayers - those with a net worth of more than 2 million francs - brought in almost 700 million francs, or 83% of the tax collection, according to cantonal data.

However, a coalition of left-wing deputies, trade unions and activists in Geneva has gathered enough signatures to demand that the richest citizens pay even more. The coalition's appeal said that the number of global problems is growing in the world, the middle class is suffering the most from the crisis, and therefore it would be fair to ask multimillionaires to "show solidarity." The initiators, which include the Swiss Green Party, expect the measure to bring in an additional 430 million francs ($474 million) over ten years.

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However, since the initiative was supported and put to the vote, the situation in the country's economy has changed. Geneva posted a record budget surplus of 727 million francs in 2022 due to higher-than-expected tax revenues. Therefore, the government of the canton invites the residents of the city not to vote for the innovation.

“This proposal has been put forward during the covid-19 crisis to allow the state to cope with the increase in poverty with more financial resources,” Finance Minister Nathalie Fontane told the Tribune de Geneve newspaper. However, in recent years, the city has collected enough taxes to cope with it, she said.

The city authorities fear that the increase in the tax will lead to an exodus of the richest residents of their city: if ten of the richest residents of the canton leave, this will deprive the city treasury of 200 million Swiss francs in tax revenues.