Swiss banking secrecy laws not only tempt foreign investors to remain silent about at least part of their capital incomes and, thus, not pay taxes as obliged by law. Therefore, Switzerland introduced a withholding tax on capital income in 1934, primarily in order to coerce domestic residents to report levels of wealth and derived incomes properly. This paper asks whether a withholding tax rate of 35 percent suffices to achieve this goal. For this purpose, marginal income tax rates are computed and income distributions are estimated for each of Switzerland's 26 cantons, distinguishing between married and unmarried tax payers. From these raw data we compute income levels and shares of tax payers for whom the withholding tax does not work as intended.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports: