b) In order to ensure that individual cantons did not impose excessively low tax rates, and to discourage the success of  the initiative mentioned below, the federal parliament used the Federal Act of 28 September 2012 on Lump-Sum Taxation (Loi fédérale du 28 septembre 2012 sur l’imposition d’après la dépense) to amend the aforementioned articles 14 DFTA and 6 DTHA, toughening the conditions imposed on lump-sum taxation. The principle amendments concern the introduction at federal level of a minimum threshold of expenditure, the requirement that cantons establish such a threshold within their own legislation, an increase of the minimum expenditure threshold from five to seven times the rental value of a property, and the requirement that cantons tax wealth by a method of their own choosing. These amendments will be applicable from 1 January 2016 to all parties paying lump-sum tax. However, persons already within the system by 31 December 2015 will continue under the previous conditions until 31 December 2020.

c) Finally, on 30 November 2014 the Swiss public was called to vote on an initiative entitled “End tax breaks for millionaires (Abolition of lump-sum taxation)”. Following a campaign in which Philippe Kenel was heavily involved, voters rejected the initiative by a majority of 59.2%. After  many years in which the prospect of this initiative seemed to undermine the future of lump-sum taxation, the uncontested verdict of the Swiss public has now carved it into stone.

6. Lucerne

On 11 March 2012, Lucerne voted on an initiative aiming to abolish lump-sum taxation. A counter-proposal put forward the same system that was accepted in St. Gallen on 27 November 2011. Furthermore, the counter-proposal stipulated that the minimum level of taxable wealth should be equivalent to at least twenty times the level of expenditure.  This means that the minimum level of taxable wealth would be CHF 12 million.

Lucerne decided against the initiative and in favour of the counter-proposal.

In 2012 there were 130 lump-sum taxpayers resident in the canton of Lucerne.

7. Appenzell Ausserrhoden

On the same day as the vote in Lucerne, the citizens of Appenzell Ausserrhoden accepted an initiative calling for the abolition of lump-sum taxation. They rejected a counter-proposal which was identical in content to the one submitted in Lucerne.

In 2012 there were only 19 lump-sum taxpayers resident in Appenzell Ausserrhoden.

8. Basel-Stadt

On 19 September 2012, the parliament of the canton of Basel-Stadt decided to abolish lump-sum taxation.  As the decision was made by parliament, it was never put to a popular vote.

In 2012 there were 16 lump-sum taxpayers resident in the canton.

9. Bern

On 23 September2012, the residents of Bern voted on an initiative aiming to abolish lump-sum taxation, and a counter-proposal which exactly matched the Federal Act of 28 September 2012 on Lump-Sum Taxation. It should be noted that the Bernese counter-proposal, unlike the one submitted on 11 March 2012 in the cantons of Appenzell Ausserrhoden and Lucerne, did not stipulate a minimum level of taxable wealth.

Bern decided against the initiative and in favour of the counter-proposal.

In 2012 there were 211 lump-sum taxpayers resident in the canton.

10. Basel-Landschaft

On  23 September 2012, the same day as the vote in Bern, Basel-Landschaft voted on an initiative aiming to abolish lump-sum taxation, and on a counter-proposal featuring the same regulations as the Federal Act of 28 September 2012 on Lump-Sum Taxation.

The canton decided in favour of the initiative and against the counter-proposal.

In 2012 there were only 10 lump-sum taxpayers resident in the canton of Basel-Landschaft.

11. Nidwalden

On 3 March 2013,  the citizens of Nidwalden rejected an initiative that sought to abolish lump-sum taxation. It should be noted that the Nidwalden Cantonal Parliament had toughened conditions imposed on the tax in 2011. A minimum level of expenditure was set at CHF 400,000, whilst the minimum level of taxable wealth was fixed at CHF 8 million.

In 2012 there were 84 lump-sum taxpayers resident in the canton.

12. Appenzell Innerrhoden

On 27 April 2014, Canton Appenzell Innerrhoden’s Landsgemeinde confirmed that it would retain lump-sum taxation, but that the minimum level of taxable expenditure would be raised to CHF 400,000.

In 2012 there were 21 lump-sum taxpayers resident in the canton.

13. Ticino

On 6 May 2014, Ticino’s cantonal parliament rejected an initiative seeking to abolish Lump-Sum Taxation.

There were 877 Lump-Sum Taxpayers living in Ticino in 2012.

14. Geneva

On 30 November 2014 the citizens of the canton of Geneva rejected an initiative seeking to abolish lump-sum taxation by a majority of 68.4%.

In 2014 there were 696 lump-sum taxpayers resident in the canton.

The canton also rejected a counter-proposal which called for a minimum legal level of expenditure of CHF 600,000, and that to cover wealth tax, the level of expenditure should be raised by 10%

Furthermore, it should be noted that in the canton of Vaud, the Swiss Workers’ Party launched an initiative in 2010 which sought to abolish Lump-Sum Taxation.  They were, however, unable to collect the 12,000 signatures required to bring the initiative forward.

Personally, we do not share this position, for the following reasons:

a. If this were the case, the authors would not have included it in the text of their initiative.

b. Article 127 paragraph 2 Cst. states that: “Provided the nature of the tax permits it, the principles of universality and uniformity of taxation as well as the principle of taxation according to ability to pay are applied.” It should be noted that article 127 paragraph 2 Cst. did not feature in the draft constitution that was drawn up by the Federal Council. It was added by the National Council, and endorsed by the Council of States on the condition that the words “Provided the nature of the tax permits it” were added. However, paragraph 2 bis, as it was drafted by the initiative’s authors, does not entail this restriction, and as a result would have a broader field of application than paragraph 2.

c. The fact that the authors of the initiative expressly stipulated that the Confederation should decree that the legislation be implemented within three years of the date of the vote is proof that they aimed to go beyond article 127 paragraph 2 Cst. and the abolition of lump-sum taxation. If the new article, 127 paragraph 2 bis Cst., had not been intended to go beyond the scope of article 127 paragraph 2 Cst., and was indeed limited to the abolition of lump-sum taxation, it would not have been necessary to require an implementation act.

It follows from this that the first sentence of article 127 paragraph 2 bis Cst. would have caused considerable insecurity in the Swiss taxation system. Firstly, the authors of the initiative and their supporters would have attempted to introduce all manner of regulations during the drafting of the implementation act. From a legislative point of view, this would have destabilised the Swiss taxation system. Secondly, it would frequently have been necessary to turn to the Federal Supreme Court regarding the interpretation of the concept of “tax privilege”. It should be emphasised that, as is the case for article 127 paragraph 2 Cst., paragraph 2 bis would have applied not only to federal legislation, but also to cantonal legislation.