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Swiss Federal Council Rejects 'Basic Income' Proposals

by Ulrika Lomas, Tax-News.com, Brussels

01 September 2014


The Swiss Federal Council has rejected proposals for an "unconditional basic income" and warned that taxes would have to be dramatically increased to fund any such measure.

The scheme would oblige the federal Government to introduce an unconditional basic income that would enable all Swiss residents to lead a dignified life. A basic monthly income of CHF2,500 (USD2,728) for adults and CHF625 for minors had been recommended.

The Federal Council says that it would cost CHF208bn (USD227bn) to fund the project. This would necessitate CHF153bn in additional taxes, and CHF55bn would need to be transferred from the existing social security budget.

The Council estimates that taxes on labor would need to equate to CHF128bn of the CHF153bn total. An 8 percent hike in value-added tax (VAT) would generate in the region of CHF25bn.

It also cautioned that employment would fall, further impacting tax revenues.

TAGS: tax | budget | tax rates | social security | Switzerland | revenue statistics

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