February 26, 2018
In Switzerland, the capital gains of private citizens are not taxed. Instead, there is a moderate wealth tax. I always suspected that this is the preferrable system in comparison to that of other countries that do the opposite. The main reason is a systemic one: with a capital gains tax, those who use their capital most productively, most notably successful entrepreneurs, pay the highest taxes. With a wealth tax, much more tax revenue comes from lazy rich who sit on idle capital without knowing what to do with. The result is a situation in which capital is better allocated and the economy grows faster. Maybe that is one of Switzerland’s success secrets?