Following a referendum in the Zurich Canton earlier this year, the super rich foreigners' flat tax privilege is to be abolished for Zurich residents in 2010.
Now a combination of Social Democrats, Greens, Evangelical Democrats and trade unions wish to hold a similar referendum in St Gallen and the Zurich Canton Council has introduced a bill to amend the federal tax harmonization laws so that the flat tax system is abolished throughout Switzerland.
There are currently 13 Cantons that allow around 4,000 super rich foreigners who are resident in Switzerland, but whose income is derived primarily from outside Switzerland, to pay a flat tax based on their use of public services instead of actual income. Anti-flat tax campaigners claim that this public services' contribution can be as low as CHF10,500. 69 parliamentary representatives of the 180 total have voted in favour of the Zurich Canton initiative, which is sufficient for legislation to be prepared for a formal vote.
Supporters of the initiative claim that the total abolition will avoid tax competition between the Cantons for the super rich residents, and claim that the Zurich experience has shown that the super rich are not moving away when the tax privilege is abolished.
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