Swiss spring no surprises at ballot box

Four of the fives votes were rejected

The Swiss have shown they are still strong supporters of their militia army and that their aversion to higher taxes is firmly intact.

This content was published on December 2, 2001

The consistency for which the Swiss are famous was clearly in evidence on Sunday, when voters - in their regular exercise of direct democracy - rejected a series of initiatives aimed at doing away with the army, and raising a tax on capital gains.

A new tax on energy to help fund the state pension was also thrown out. Voter turnout was the lowest for two years at just over 37 per cent.

Voters instead plumped for a government initiative aimed at capping state debt, thereby re-affirming the Swiss reputation for financial probity - provided it does not come at the cost of higher taxes.

That initiative means the government and parliament are now compelled to build up surpluses in boom years to help finance deficit spending in leaner years.

For the government, the voting went precisely according to plan. The only proposal put forward by the state - the deficit cap - was overwhelmingly endorsed, while the others, which the government opposed, were firmly rejected.

Strong backing for the army

Voters overwhelmingly turned down proposals by a pacifist group to scrap Switzerland's armed forces and set up a volunteer peace corps instead.

Only 22 per cent of the electorate, and none of the country's 26 cantons, came out in favour of abolishing the militia army.

A similar proposal had received 36 per cent of votes at the ballot box in 1989.

Andreas Ladner, a political scientist at Bern University blames the anti-army supporters for the poor result.

They ran a very low-profile campaign and showed a fundamental disregard for the general mood in the population, he told swissinfo. Referring to the surprise result in 1989, he added: "You can not think the unthinkable twice."

Capital gains

Sunday's ballot keeps a share of capital gains - profits from increases in the value of assets - firmly out of the taxman's hands. The Trades Union Federation had called for a 20 per cent levy on all capital gains above SFr5,000 ($3,000).

The rejection of such a tax, by two-thirds of voters, was applauded by both business and the Bankers' Association. They said it would preserve Switzerland's leading role as a financial centre, and save small- and medium-sized businesses from a crippling tax burden.

The country's business federation had argued that a tax on capital gains was unnecessary because Switzerland already has a wealth tax.

This view was supported by Jean-Christian Lambelet, professor of economics at Lausanne University. "We have a wealth tax in Switzerland, unlike in most other countries, so there is really no reason to tax capital gains," he told swissinfo.

"Strictly speaking, capital gains are a form of income... but if you tax capital gains then you should be able to deduct capital losses, which was allowable under the initiative but only to a small extent."

As to why the public rejected the tax, Lambelet said there was a perception that the tax burden is already high enough. "The burden of taxation in Switzerland has increased in the past couple of years and people just didn't want to have an extra tax."

He added that the vote might also have been influenced by an increase in the number of people owning shares "even though small capital gains would have been exempt".


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