Re: Swiss elections and referenda - New Federal Councilor(s) election 7 December

[mileslunn]

Looks like two referendums in May, one on pensions and the other on the EU gun control laws.  What exactly are those petitioning asking for and how likely are each to pass.  My understanding is pensions has to do with VAT increases to fund shortfall and opposition to it?  On gun control, I know the EU introduced magazine limits and also banned fully automatic weapons converted to semi-automatic (service rifles exempted) and possibly some assault weapons so what exactly are they trying to overturn.  If the one on gun control passes, does that mean border checkpoints come back as I believe that is the main reason why the EU has a minimum standard here (It is a big reason why here in Canada we still have border checkpoints with the US has they have much laxer gun laws than we do, mind you we have looser drug laws and immigration so goes both ways).

[mileslunn]

On the referendum on gun control, will the recent shooting in New Zealand have any impact as I believe the EU law is to ban weapons with high capacity magazines as used there.  While half way around the world I know here in North America many are using it as why tougher gun laws are needed and also praising their quick response to tighten gun laws.  Or will a lot of Swiss just feel its a different country with vastly different issues so irrelevant.

[mileslunn]

Both votes passed comfortably in the end. the RFFA tax and social security refors by a 66.4% to 33.6% margin; and the Gun control law by 63.7% to 36.3% here,.

Tages Anzeiger have interactives maps here; but well, it was a Yes to both across the board - only Ticino rejected the gun law; and in what was essentially a victory for the pro-Europeans, it was a higher Yes on both in Romandie. With the gun law, in what came down to a binary choice between Schengen and Guns, the sweeping victory across the country (even Schwyz backing it!) kind of shows where public opinion is on Schengen these days, and reflects why the UDC are not exactly looking forward to October.

The PS has also pulled itself together and in light of the RFFA vote has launched a referendum to institute minimum nationwide tax rates. This is to combat the phenomenon of "fiscal competition" where (Swiss German) cantons compete with each other to attract businesses and rich people by offering the lowest taxes possible; as much anything, this phenomena is one of the key reasons Switzerland continues to be a tax haven -as the right wing and sparsely populated cantons of inner Switzerland have no qualms about forcing their agendas on the rest of the country.

Anyway, next stop, the federal elections

On gun laws changes seem quite modest when compared to gun laws in other developed countries save perhaps the US so was it only just over Scheghen or is it like other developed countries people just favour more restrictive gun laws.  I realize in Western Europe Swiss and Brits are the two poles with Brits being the most anti-gun (one of the few European countries that bans handguns outright and limits semi-automatics to .22 caliber rimfire, all others banned) and Swiss most pro-gun although within developed world probably not as pro-gun as Americans I assume.  There you have Americans on one end while Japanese and Koreans on other.

For minimum tax on rich, how likely is that to pass?  Where I live in Canada, taxing the rich more is wildly popular which is why we have one of the highest top marginal tax rates in world even compared to most European countries (depends on province though, but generally in Western Canada top rates are like Western Europe, in Eastern provinces where most live comparable to Nordic Countries, although this is very recent as top rate hiked by 4% federally in 2015 and most provinces have in last decade hiked them too) but I get the impression soaking the rich doesn't have the same appeal in Switzerland as it does in some other countries.  For starters inequality is not that high and that is the big thing pushing the soak the rich rhetoric in some countries.  Unlike its neighbours where top rates are generally in high 40s or low 50s, in Switzerland most I believe have combined total top rates in 30s and a few high tax areas in low 40s but very few areas over 45% and none over 50%.

[mileslunn]

On gun laws changes seem quite modest when compared to gun laws in other developed countries save perhaps the US so was it only just over Scheghen or is it like other developed countries people just favour more restrictive gun laws.  I realize in Western Europe Swiss and Brits are the two poles with Brits being the most anti-gun (one of the few European countries that bans handguns outright and limits semi-automatics to .22 caliber rimfire, all others banned) and Swiss most pro-gun although within developed world probably not as pro-gun as Americans I assume.  There you have Americans on one end while Japanese and Koreans on other.

Yeah, the campaign was almost entirely focussed around the risk to Schengen membership. Aside from a small vocal "way of life" gun lobby (which resembles the one in France more than the USA) the simple fact is that guns are not an issue that people care about. Gun crime is pretty rare, and there isn't the cultural warfare around the issue that makes it so salient in America - so people tend to have very little interest in fighting battles over it.

The "No" vote in Ticino is far better understood as a reflection of it's specific scepticism of the EU, rather than any particular love of guns among the Swiss-Italians

For minimum tax on rich, how likely is that to pass?  Where I live in Canada, taxing the rich more is wildly popular which is why we have one of the highest top marginal tax rates in world even compared to most European countries (depends on province though, but generally in Western Canada top rates are like Western Europe, in Eastern provinces where most live comparable to Nordic Countries, although this is very recent as top rate hiked by 4% federally in 2015 and most provinces have in last decade hiked them too) but I get the impression soaking the rich doesn't have the same appeal in Switzerland as it does in some other countries.  For starters inequality is not that high and that is the big thing pushing the soak the rich rhetoric in some countries.  Unlike its neighbours where top rates are generally in high 40s or low 50s, in Switzerland most I believe have combined total top rates in 30s and a few high tax areas in low 40s but very few areas over 45% and none over 50%.

Very little chance of passing. That isn't down to attitudes towards taxing the rich at large (polling tends to suggest that there is broad support for higher taxes on the rich), but simply because the Swiss electorate are very well behaved and virtually always reject popular initiatives.

There are also a couple of other points worth making. Firstly, yes Switzerland has relatively low income inequality - but it does have very high wealth inequality; which is why the  JuSo initiative is focussed on income derived from capital (ie wealth).

On top of that, taxes in Switzerland vary wildly depending on where you are (and the fact that most taxes are collected and the communal and cantonal level makes it very hard to make much sense of top marginal rates). But basically, you can get the jist from the good old Tages-Anzeiger again. A married couple with two kids earning 1 million francs a year (*cough*) could pay an effective tax (excluding federal taxes) rate as low as 9% in the tax haven communes in Ausserschwyz to as much as 29% in parts of the Jura. Once you factor in the federal taxes and Social Security, the higher tax communes are quite high even by rest of Europe standards.

Going back to the point about wealth inequality, this is leading to a growing conclusion that the fiscal competition system is an active source of harm by itself. In that low tax communes have higher property prices, leading to them having exclusively wealth populations and therefore lower social charges. Meaning that they can charge lower taxes and create a self-replicating cycle. On the other side, lower income areas, and larger towns, have naturally to spend more on both social welfare, but all the trappings that people expect from the state - from schools, to infrastructure, to whatever; meaning they are forced to charge higher tax rates.

Add to that, a number of smaller Swiss-German cantons (Zug, Schwyz and Nidwald being the ugly sisters here) have discovered that - thanks to small native populations and the traditional communal solidarity welfare system, which inherently reduces the social charges on these sorts of places - they can game the system and literally "get rich quick" of the back of setting themselves up as fiscal paradises. This isn't just damaging to the rest of the world, but to the rest of the country who wind up essentially forced to subsidise businesses that set up in low tax jurisdictions, but rely on the infrastructure and skills provided by the rest of the country.

So yeah, what was I saying - yes there is some demand to soak the rich (Basel actually passed a wealth tax this weekend); but the issue is about wealth more than it is about income.

That  makes sense and in Switzerland they have a wealth tax which only Norway, Spain, and France have, other European countries don't and France is much more limited.  In Canada we don't have a wealth tax nor does US and due to high real estate prices in some large cities wealth tax a tougher sell than higher income taxes on rich.

As for guns, I suspect low crime rate is probably why non-issue.  I do wonder if one mass shooting like New Zealand would change things as prior to Christchurch they had some of the most permissive gun laws in developed world now some of the most restrictive.

[mileslunn]

So Ticino (and I guess Italian Swiss in general) are the #populists of Switzerland?

Well,yeah, populist is a good way to describe the way Ticino votes. Although it doesn't really fit a "Global trends" type analysis as it isn't poor, isn't particularly working class and isn't "left behind" - and the area that has swung right the hardest is the largely urban south of the canton (centred on Lugano), which is a financial services centre. The real, real story when it comes to Ticino is the resentment of cross border commuters (and the rise of the Lega, who actually own a large swathe of the local media, and therefore set the agenda). I mentioned in a previous post, but a combination of free movement and Italy's economic issues have really not been managed well down there - there is a pressing issue with Italian employers simply relocating over the border from Italy to take advantage of Swiss employment laws, but still only offering Italian salaries. Which Italians will take out of desperation, but where you literally can't afford to live in Switzerland on a salary of chf2,000 a month.

You can see an element of the same effect in Geneva and Schaffhausen, which have a similar story of cross border commuters, but not as extreme as France and Germany are better off than Italy, and Ticino has the added element of it's proximity to the huge population centre that is Milan.

About half of the country's Italian speakers are actually Italian immigrants or their children who live outside of Italian-Switzerland, which makes it hard to generalise about "Italian speakers" as a whole

How do the Romansch vote?

From what I recall, slightly to the left of rural Swiss-Germans - because of their reliance on public support and funding to keep the language alive (eg the more romanche speaking districts of the Grisons; Surselva and the lower Engadine rejected the the abolition of the TV licence by the widest margin in the country last year). But they're still pretty rightwing as they mostly live in rural areas that are pretty assimilated with German Switzerland

For Romansch, what type of language services do they get.  Can they take Romansch as first language in school and is it compulsory in Grisons to take it as a second language as Ireland requires everyone to study Irish Gaelic?  I assume they all speak other languages, but which ones do they study as I heard the fact some German speaking cantons put more emphasis on learning English as a second language over French and/or Italian has upset some, otherwise focus on communicating internationally not with other parts of the country.

[mileslunn]

Immigration initiative seems interesting, almost same as what many Brexiters wanted, which is end of free mobility.  I could be wrong but guessing like Brexit, probably big age gap with idea being most popular amongst seniors while least popular amongst younger voters.  If it loses badly that may put the end to other countries talking about this.

Besides EU has more or less as they did with Britain made clear, you cannot be part of the single market and only accept some of the four freedoms, you have to accept all.

[mileslunn]

Gay marriage I suspect will pass and considering almost all Western European countries allow it, makes sense.  The capital gains and dividends is silly as most countries tax them at lower not higher rate.  If people are concerned rich not paying enough taxes, better to raise top income tax rate, which if you combine canton and municipal, is on average (some exceptions like Geneva) well below that of its neighbors.  Average top rate in Switzerland is 34%, while Austria is 55%, Germany 47.5%, Italy 44-47% depending on region and municipality while France is 45%, but 55% if you include CSG Charges, which are for all intensive purposes a tax.  So it would make more sense to maybe raise top rate so average combined is in low 40s which would be higher than now, but still lower than most Western European countries.  And perhaps like Denmark maybe have a tax ceiling so those in higher taxed municipalities like Geneva don't get too high, I would suggest 45% or 50% at tops for tax ceiling.

For dividends, reason they are taxed lower is already taxed at corporate level.  Australian method where one pays the difference is most logical.  For capital gains, there is inflation never mind highly mobile.  Where I live in Canada, capital gains are taxed at 50% of regular income rate (not 50% overall, but half whatever income tax rate) is and most of Western Europe I noticed on balance is pretty close to half whatever top marginal rate is.