There are large discrepancies between Swiss cantons when it comes to a households' disposable income, according to a study released on Tuesday by Credit Suisse.This content was published on June 20, 2006 - 12:21
The small canton of Appenzell Inner Rhodes topped the survey as the least expensive place to live, when taxes, social security payments, compulsory health insurance and rents were taken into account.
Appenzell did well thanks to lower taxes and health insurance premiums.
Disposable income is considered by the survey's authors to be the biggest financial criterion for most people when deciding where to live.
Cantons that offer low taxes are among those that fared best in the survey. Schwyz, which is a tax haven for many millionaires, came in second, while Zug, financial headquarters for many companies, was fifth on the list.
In fact, Zug would have done better if not for its high rents.
A number of cantons have been competing to attract wealthy taxpayers. Obwalden voters recently approved tax breaks for the rich, hoping to convince more to move there.
Finance Minister Hans-Rudolf Merz defended tax competition on Tuesday, calling it a major part of the country's fiscal policy. "Competition guarantees diversity, choice, efficiency and innovation," he told members of the Federation of Industrial and Service Groups in Bern.
He added that when individuals and companies can decide where to settle, it forces politicians and administrations to provide a selection of attractive public services and to consider dropping taxes.
The centre-left Social Democrats have decried changes to cantonal tax policies, saying they were being made to the detriment of public services.
According to Merz, taxes paid rose on average from 26 per cent to 29.5 per cent between 1990 and 2004.
Above-average taxation, combined with high rents and the country's most costly health insurance premiums, put Geneva last in the Credit Suisse study.
There are also large variations in disposable income within regions. A family of four in Avully, canton Geneva, earning SFr150,000 ($120,870) annually will have about SFr7,000 less at the end of the year than if they were to live in Nyon, a few kilometres away in canton Vaud.
A couple with no children and an annual income of SFr250,000 in the town of Locarno will end up with SFr73,500 in their pocket, a figure that would be 30 per cent higher if they lived in nearby Gordola. Both places are in canton Ticino.
swissinfo with agencies
Compared with neighbouring countries, average income is higher in Switzerland, according to a recent study published by Solothurn's technical university.
After taxes, social security, pension contributions and health insurance premiums are accounted for, the difference is not as obvious. The State Secretariat for Economic Affairs has confirmed this although comparisons are difficult between countries.
According to figures from the Paris-based Organisation for Economic Cooperation and Development, Switzerland is among the countries with the highest cost of living.
Compared with Germany, salaries are 20 per cent better, but the cost of living is 28 per cent higher.
Depending on the place of residence, household disposable income can vary by as much as 30 per cent.
Appenzell Inner Rhodes has the lowest costs (after deducting taxes, social security, pension contributions, health insurance, housing, power, water, etc.), while Geneva fares worst.
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