- Economist Reiner Eichenberger has criticized Swiss policy as “sleepwalking” in a white paper sent to all party presidencies.
- He warns of high costs due to international agreements and immigration.
- Eichenberger proposes a hidden immigration tax.
- He also calls for the abolition of value-added tax and a CO₂ price.
Should Switzerland more strongly question its international obligations and expand direct democracy?
A leading Swiss economist is calling for radical reforms to the country’s political and economic systems, warning that Switzerland is failing to adapt to a rapidly changing world. Reiner Eichenberger, along with co-author Fabian Kuhn, argues in a recent policy paper that the nation is acting like a “sleepwalker” in the face of global upheaval and risks falling behind. The proposals, delivered to the leadership of Switzerland’s major political parties, could reshape the country’s relationship with international agreements and its approach to immigration and taxation.
Eichenberger’s analysis centers on the perceived dangers of adhering to international treaties, such as the Paris Climate Accords, when other nations are not fully committed to the same standards. He contends that this puts Switzerland at a significant financial disadvantage. The proposals arrive at a time of increasing debate across Europe about national sovereignty and the benefits of globalization.
A key concern raised in the paper is the impact of largely unrestricted immigration from the European Union. Eichenberger argues that this influx places a strain on infrastructure, creating substantial “filling costs,” and discourages citizens from advocating for sound and economical policies. He suggests Switzerland needs to “wake up from its deep sleep” and embrace innovation to address these challenges. The report urges a swift response to the latest realities.
Proposed Reforms
● International Agreements: Eichenberger and Kuhn warn that Switzerland could face substantial financial burdens if it continues to strictly implement international agreements while other countries do not.
● Immigration Costs: The authors argue that free movement of people strains infrastructure and diminishes public engagement in responsible policymaking.
● Hidden Immigration Tax: To financially manage immigration without formally violating EU agreements on freedom of movement, the authors propose a concealed immigration tax.
● Universal Replacement Tax: Specifically, Eichenberger and Kuhn call for extending the current military service replacement tax – approximately 50,000 Swiss francs – to all residents of Switzerland, including women and immigrants.
● Start-up Capital for Citizens: To prevent Swiss citizens from bearing the cost of this tax, the state would save 3,000 Swiss francs annually for each child born in the country.
● Abolition of Value-Added Tax: Eichenberger proposes eliminating the value-added tax entirely to prevent importers from exploiting Swiss purchasing power with inflated prices, coupled with a radical opening of borders.
● Conclude to Public Transport Subsidies: In the transportation sector, the paper advocates for complete cost transparency, eliminating billions in subsidies for public transport and replacing them with user fees that cover expenses.
● CO₂ Tax Instead of Climate Targets: The report suggests abandoning rigid emissions targets in favor of a universal CO₂ tax, with all revenue returned to the population.
● Tax Breaks for Working Retirees: Recognizing that a fixed retirement age is a key driver of aging populations, the authors propose halving the tax rate on income earned by individuals over 67 to incentivize continued employment.
● Financial Incentives for Patient Recovery: The healthcare system should be restructured to reward health insurance companies financially for achieving patient recovery, shifting the focus towards genuine healing.
● Tax Deduction for Inflation Losses: Eichenberger calls for relieving the burden on heavily taxed capital by allowing investors to deduct inflation losses from their nominal earnings.
● Prize Money for Popular Initiatives: To discourage parties from exploiting popular initiatives for electoral gain, the authors suggest awarding a prize of two million Swiss francs to solution-oriented initiatives approved by voters.
● Reward System for Fiscal Equalization: Successful cantons should be allowed to retain the financial benefits of efficient policies for four to eight years, rather than facing immediate penalties through increased contributions to the fiscal equalization system.
● Threat of “Demographic Migration”:** The economists also highlight a new global threat: “demographic migration,” where young workers from aging countries may increasingly move to states with lower taxes, further straining the Swiss system.
Political Reactions
The proposals have been met with a mixed response. SVP National Council member Roland Rino Büchel expressed openness to Eichenberger’s ideas, stating that Switzerland is becoming entangled in international obligations and ideological projects. He believes the analysis reveals flawed incentives created by freedom of movement and acknowledges the strain immigration places on infrastructure, housing and transportation.
Büchel stated the proposals were “bold” and that Eichenberger’s ideas should be “examined unemotionally,” particularly the idea of an immigration tax. He added that it is too expensive and risky to treat deals like the Paris Climate Agreement as sacred.
However, the proposals have been sharply criticized from the left. SP National Council member Fabian Molina dismissed Eichenberger’s suggestions as “absurd and detached from reality,” stating that none of them are “even remotely feasible.”
