Low Taxes Cripple a City in Switzerland

Switzerland has long been hailed as the tax haven capital of the world. Countless U.S. corporations have moved their operations to Switzerland in pursuit of lower tax rates and fewer regulations. A trend unhindered by increasing numbers of IRS audits and penalties for offshore accounts, it has become the standard behavior among large corporations to avoid crippling tax debts by moving to Switzerland, leaving the U.S. starved for investment capital and tax revenue. Meanwhile Switzerland thrives as they attract Umzug in die Schweiz more and more foreign investment. But how much is too much of a good thing?

Zug Struggles With Too Much Luxury

The city of Zug in Switzerland is generally considered a tax haven among havens. Its highest personal income tax rate is 22.9 percent, with companies paying an average of 15.4 percent, far lower than U.S. rates or those found anywhere else in Switzerland.

The city boasts numerous luxury stores, multinational corporations, and U.S.-dollar millionaires. Unlike most of the rest of the Western World, Zug has more jobs than people to fill them, yet all of this investment is becoming a problem.

While more and more corporations set up operations in Zug, the people of the city can no longer afford to live there. Residents complain that only older people with homes dating from the 1960s, and the super rich, can now afford homes in Zug. As the income gap continues to rise, most members of the middle class are moving out to cities such as Zurich that are more affordable.

Is Change Coming?

Critics of high taxes in the U.S. have long complained that such high rates of taxation at home drives business to places such as Switzerland. With maximum corporate income tax rates at 35 percent in the U.S. and individual rates maxing out at 50 percent in the U.K., it is hard to argue otherwise.

Yet, there is evidence to suggest that this might be changing soon. With U.S. taxpayers suffering increasing tax debt and foreclosures under the struggling economy, many politicians are calling for tax reductions. It is difficult to determine what the outcome may be with politicians and public figures arguing on both sides of the issue, but the situation is becoming dire.

Now it is not only the U.S. that is feeling Umzug in die Schweiz the impact of high taxes and a failing economy. Switzerland, the haven to which many U.S. businesses flees, is feeling it as well. Though Switzerland remains true to its long-standing policies of low taxation, change may still be on the way.