Letter Of Interest In Alpha Kappa

Zurich's middle class tax competition

Over the year the NZZ am Sonntag reported that the middle class was a loser in tax competition. It made that finding at the comparatively low cut in tax rates. Amazing as this knowledge is not, It raises the question of how relevant this is and whether the time is there to draw a conclusion with respect to middle class and tax competition. Last I question. With the introduction of the NFA has allowed many of the smaller cantons in Switzerland, the low tax strategy copy of the Canton train. It is clear that they lowered taxes on the highest income and wealth. There are two reasons for this:

1. is a small canton with a few very rich tax cut for this group of strong, without the loss of revenue from the taxes are too high. But the chances are very high that additional persons this group are drawn so that the end result, ideally, higher returns. Through large tax cuts for the middle class threaten tax losses, which can not be compensated easily.
2. The competition focuses naturally to people who are both mobile and where taxation is a big expenditure. The tax savings through a move must be rational, the additional costs due to higher expenditures on housing, a longer commute, longer distances to public facilities (eg swimming pools, cultural institutions, health care) and any emotional costs by binding to the recent Location compensate. In the middle class is that condition often not met.

result of the first consideration is to be assumed that this trend will slow down again. If a canton with the arrival of rich people success, the greater the risk that the tax losses caused by massive tax cuts can not be offset by new inward migration. The focus of the control strategy is shifting from the settlement of very rich people tax cuts to a larger location strategy, which focuses mainly on keeping and caring for the residents. In addition to an attractive tax climate are also other important state services again. Then it is time to assess the impact of tax competition on the middle class.

The canton of Zurich has already arrived there. The relatively small difference in tax cuts, which is cited in the article mentioned, is a clear sign. The important thing is now just that Zurich continues on this strategy and reacts cautiously on tax competition. Purpose are essentially two points must be considered:

1. A reasonable analysis of the tax Exposure in comparison with the other cantons and
2. up modest tax cuts for the highest income and wealth.

former is still not able to achieve, as the District's tax burden compares to monitor (eg for 2009 ) the cantonal capitals rather than the lowest tax rates in each community. Thus a fiscal action is reported, which does not exist to this extent. The latter means that it is better for the Canton of Zurich, lowering taxes often little often rather than making large cuts. In this sense, the proposal The Liberal Green as the new tax law in the canton of Zurich (vote on 15 May 2011) a useful measure for the conservation of the Zurich site attractive to everyone, including the middle class.