Switzerland’s super-rich: essential contributors or a social threat?

Keystone / Christian Beutler

Switzerland is one of the wealthiest countries in the world. However, its wealth is distributed very unevenly: the richest 1% own 45% of total assets. At the same time, this elite group contributes a significant share of the country’s tax revenue. Swiss public broadcaster, SRF, takes a closer look.

How important are the rich to Switzerland? What responsibility do they bear? And does this growing inequality threaten social cohesion? Across the globe – and in Switzerland – the pressure on the wealthy is mounting. But what does it mean to be “rich”? From a global perspective, many Swiss citizens would likely be considered wealthy. Yet, according to Caritas, 700,000 people in Switzerland live in poverty. They struggle to afford health insurance, suitable housing or basic healthcare costs.

>>Watch the full report on Swiss public television, SRF:

>> Read the full report on Swiss public broadcaster, SRFExternal link

Wealth inequality in Switzerland

In the banking world, clients are generally considered wealthy if they hold net assets of at least CHF1 million ($1.2 million). Around 400,000 taxpayers fall into this “millionaire” category. But to be among the top 1% of the population, one must have net assets of CHF8 million.

Together, this wealthiest 1% controls 45% of the country’s total wealth. At the other end of the spectrum, nearly two-thirds (62%) of taxpayers collectively own just 3%. On average, members of the richest 1% hold assets worth CHF20 million. By contrast, the lowest 22% of the population have no net wealth at all.

“In international comparison, wealth distribution in Switzerland is highly unequal,” says economist Isabel Martinez, a specialist in inequality. This disparity has grown further in recent years as the wealthiest individuals have seen their fortunes rise dramatically.

The tax contribution of the super-rich

The wealthy make a major contribution to public finances. The top 10% of asset-holders pay 86% of all wealth tax. Meanwhile, the highest-earning 10% account for 53% of all income tax, equating to CHF31.6 billion in 2020 – roughly a quarter of total tax revenues across Switzerland, cantons and municipalities.

“In a progressive tax system, the rich pay more than the poor,” explains Martinez. “That’s a constitutional principle. But it also reflects inequality: the more income and wealth is concentrated at the top, the more heavily the tax burden falls on this small group.”

Wealthy entrepreneurs are often credited with job creation, innovation and investment in future-oriented projects. Switzerland is also home to more than 13,000 charitable foundations, which collectively manage CHF140 billion and distribute around CHF3 billion annually. In addition, some affluent individuals support culture, science, education and local sports teams through personal donations – contributions estimated to total at least CHF1 billion a year.

What do the super-rich owe the state?

Nonetheless, pressure on the wealthy is increasing in several regions. Globally, calls for higher taxation of the rich are growing. In Switzerland, the Young Social Democrats have launched an initiative specifically targeting wealthy heirs – signalling a rising political debate over how much the super-rich should give back.

What does the community say? A non-representative survey reveals that approximately nine out of ten users (87%) of the “dialogue” community perceive the super-rich as a threat to democracy. Read more about this topic on Dialogue:

+Are the super-rich a threat to democracy?

Translated from German using DeepL/amva/ts