Fiscal competition – blessing or bane?


In a bid to attract companies and wealthy individuals several countries in Europe as well as some Swiss cantons have reduced tax rates considerably over the past few years. The danger is though that lower taxes can also lead to cuts in public spending and vital services. Is it worth the risk?

There is also nothing that guarantees that firms or rich people will stay if they find a better deal elsewhere. So does it make sense to participate in this race from an economic point of view or is it simply kowtowing to the wealthy and big companies? Let us know what you think.

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Tax breaks

Cantons begin to see downside of low tax rates

An official of the canton of St Gallen's tax administration works in the archive

For years they fought to offer the lowest tax rates but now some cantons in central Switzerland are questioning the wisdom of this rampant tax competition as the population boom that came with it weighs more heavily on local resources.  [...]

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EU wields threat of financial blacklist

EU commissioner for Taxation and Customs Union, Audit and Anti-Fraud, Algirdas Semeta talks during a press conference on the EU Commission Package to fight tax evasion and aggressive tax planning

Brussels is demanding concrete proposals from Bern for scrapping the generous tax incentives offered to international companies. Yet the pressure from the EU could end up boosting Switzerland’s attractiveness in the long run.  [...]

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