Swiss to vote on basic income benefit

[Belsnickel]

(05-06-2016, 10:47 AM)SunsetBengal Wrote: When I looked up their taxation rate, it begins at 31%, and tops out at 56%.  Seems kind of high to me.  This proposal would dramatically reduce tax revenue generated, by making the first $2600/mo., for an adult tax free income.  I wonder how long it would take the Swiss government to go from balanced/surplus budget, to fall into a deficit?

Definitely not the case. Looking over the Swiss FTA document on the Federal, Cantonal and Communal taxes I don't know where whatever you were looking at came up with those numbers. But the complexity of the tax system there is rather interesting and it would take me a lot of digging and time to really give good estimates. Definitely not as high as what they say there. It is much closer to the U.S. tax levels, which is higher than many perceive. When you look at the range in a combination of federal, state, and local income taxes you would be amazed at how much that changes.

As for it changing their revenue, yeah, it will, but likely not as much as you think. They also have items in place constitutionally that would not allow them to start relying on debt to make up the difference.

[SunsetBengal]

(05-06-2016, 11:14 AM)Belsnickel Wrote: Definitely not the case. Looking over the Swiss FTA document on the Federal, Cantonal and Communal taxes I don't know where whatever you were looking at came up with those numbers. But the complexity of the tax system there is rather interesting and it would take me a lot of digging and time to really give good estimates. Definitely not as high as what they say there. It is much closer to the U.S. tax levels, which is higher than many perceive. When you look at the range in a combination of federal, state, and local income taxes you would be amazed at how much that changes.

As for it changing their revenue, yeah, it will, but likely not as much as you think. They also have items in place constitutionally that would not allow them to start relying on debt to make up the difference.

I was using their income tax statistics from 2014, Wikipedia.

[Belsnickel]

(05-06-2016, 11:17 AM)SunsetBengal Wrote: I was using their income tax statistics from 2014, Wikipedia.

What page did you find that on? I don't see it on the taxation in Switzerland page, and on the chart for rates around the world, Switzerland has a minimum of 0% and a max of 13.2% federal. Or are you still looking at Sweden?

[SunsetBengal]

(05-06-2016, 11:21 AM)Belsnickel Wrote: What page did you find that on? I don't see it on the taxation in Switzerland page, and on the chart for rates around the world, Switzerland has a minimum of 0% and a max of 13.2% federal. Or are you still looking at Sweden?

My mistake, I WAS looking at Sweden.  D'oh!

[*michaelsean*]

(05-06-2016, 11:14 AM)SunsetBengal Wrote: Are you sure about that?  It does say that, toward the beginning of the article.  However, when you read on into the article, it clearly states a few situational examples;  For someone with no income at all, they would receive the full benefit of $2600/mo., if a person were already making $1600/mo., they would receive $1000 each month.  And a person, for example that makes $6500/mo. would receive no cash benefit, other than the break of their first $2600 of monthly income being tax free.

I just read the beginning and skimmed so you're probably right.  Yeah I'm definitely not going to work in that case.  

[Belsnickel]

(05-06-2016, 11:25 AM)SunsetBengal Wrote: My mistake, I WAS looking at Sweden.  D'oh!

Amerikanern.

[Au165]

(05-06-2016, 11:29 AM)michaelsean Wrote: I just read the beginning and skimmed so you're probably right.  Yeah I'm definitely not going to work in that case.  

Why work and make $3100 after taxes when for a difference of $500 you can sleep all day and chill?

[*michaelsean*]

(05-06-2016, 11:37 AM)Au165 Wrote: Why work and make $3100 after taxes when for a difference of $500 you can sleep all day and chill?

I'm going all in if they'll take me.  

[Au165]

(05-06-2016, 11:39 AM)michaelsean Wrote: I'm going all in if they'll take me.  

I wonder if they took into account people leaving the workforce and the loss of tax revenue from that when determining the financial viability of this proposal?

[Belsnickel]

(05-06-2016, 11:39 AM)michaelsean Wrote: I'm going all in if they'll take me.  

Switzerland has long been on my list of potential countries to live in. I have Swiss ancestry (my father's family lived in Bern before moving to Alsace and then eventually to the U.S.) and it is documented, so I could make it happen. But it isn't cheap to live there, and what you would make not working would not go far.

[*michaelsean*]

(05-06-2016, 11:54 AM)Belsnickel Wrote: Switzerland has long been on my list of potential countries to live in. I have Swiss ancestry (my father's family lived in Bern before moving to Alsace and then eventually to the U.S.) and it is documented, so I could make it happen. But it isn't cheap to live there, and what you would make not working would not go far.

It's the equivalent of maybe $100,000 pretax.  I'll make it.  The wife can get a part time job if necessary.

[CKwi88]

(05-06-2016, 09:43 AM)Arturo Bandini Wrote: Finland also think to do that. It will help people to do what they like in life. It's huge.

Get outta here with that European progressivism talk! This is Murica, you need to do something terrible for 35+ hours a week before you can do the things you like in life.

[Belsnickel]

(05-06-2016, 11:55 AM)michaelsean Wrote: It's the equivalent of maybe $100,000 pretax.  I'll make it.  The wife can get a part time job if necessary.

Cost of living in Switzerland is almost 75% than here in the U.S., not including rent. Rent is almost 50% higher. The average salary in Switzerland is twice the 2600 CHF amount for a reason.

[Au165]

(05-06-2016, 12:08 PM)Belsnickel Wrote: Cost of living in Switzerland is almost 75% than here in the U.S., not including rent. Rent is almost 50% higher. The average salary in Switzerland is twice the 2600 CHF amount for a reason.

The poverty level in Switzerland is 2300 for singles so this would at least put you over the poverty level, but barely. What is interesting is the poverty level for two people and two kids is 4800, however this would provide 6,500. The thing here with the median salary of someone in the communications sector only being 8500 Gross you could argue a family of four, who only a single person works, would almost be as well off with no one working.

[Belsnickel]

(05-06-2016, 12:21 PM)Au165 Wrote: The poverty level in Switzerland is 2300 for singles so this would at least put you over the poverty level, but barely. What is interesting is the poverty level for two people and two kids is 4800, however this would provide 6,500. The thing here with the median salary of someone in the communications sector only being 8500 Gross you could argue a family of four, who only a single person works, would almost be as well off with no one working.

That amount gross? You're still looking at a difference that would be equivalent to more than rent and utilities for a month even after taxes, so I think the margin for almost would be pretty wide there.

[Au165]

(05-06-2016, 12:26 PM)Belsnickel Wrote: That amount gross? You're still looking at a difference that would be equivalent to more than rent and utilities for a month even after taxes, so I think the margin for almost would be pretty wide there.

Yes that's the gross amount, versus the 6500 tax free. Not sure if the culture there has many single working parent households, but in what I laid out they are basically even between not working and working.

[SunsetBengal]

(05-06-2016, 12:21 PM)Au165 Wrote: The poverty level in Switzerland is 2300 for singles so this would at least put you over the poverty level, but barely. What is interesting is the poverty level for two people and two kids is 4800, however this would provide 6,500. The thing here with the median salary of someone in the communications sector only being 8500 Gross you could argue a family of four, who only a single person works, would almost be as well off with no one working.

(05-06-2016, 12:46 PM)Au165 Wrote: Yes that's the gross amount, versus the 6500 tax free. Not sure if the culture there has many single working parent households, but in what I laid out they are basically even between not working and working.

Not really, they would have much to lose by not working at all.  If that median communication worker salary is 8500, and they are the head of a household of 4, then the first 6500 of that income is tax exempt, leaving only 2000/mo subject to taxation.  The taxation on that 2000, even using the highest percentage (13%) is 260/mo that they would pay in tax.  So, by not working, they would lose out on 1740/mo in income.  Which is substantial.

Also, it may surprise a few of you to learn the idea that not everyone aspires to get paid for doing nothing.  A good many people actually take pride in having a livelihood, and paying their own way in life.  Those type of people really don't want to be a burden to their respective tax base.

[JustWinBaby]

This will be interesting as robots and AI are going to take more and more jobs (and is probably already happening in a major way).

It's not hard to imagine that, in our lifetime, there will be a fraction of jobs available today for humans. Won't be much left by mediocre service jobs that aren't particularly skilled or value-added.

What will be interesting to watch with the Swiss is this move is inherently inflationary, and economics would tend to predict that the gains all accrue to the owners of hard assets. If everyone has more money, everything is going to cost more...leaving the "real" discretionary income unchanged. But, in the future described above, it becomes a question of how to allocate resources.

[JustWinBaby]

(05-06-2016, 04:31 PM)SunsetBengal Wrote: Also, it may surprise a few of you to learn the idea that not everyone aspires to get paid for doing nothing.  A good many people actually take pride in having a livelihood, and paying their own way in life.  Those type of people really don't want to be a burden to their respective tax base.

When I see survey that 70% of Americans hate their job and/or their boss, I tend to question the above claim.  People may pursue other interests or find something else to do, but it likely won't be productive or create any growth.

[Au165]

(05-06-2016, 04:31 PM)SunsetBengal Wrote: Not really, they would have much to lose by not working at all.  If that median communication worker salary is 8500, and they are the head of a household of 4, then the first 6500 of that income is tax exempt, leaving only 2000/mo subject to taxation.  The taxation on that 2000, even using the highest percentage (13%) is 260/mo that they would pay in tax.  So, by not working, they would lose out on 1740/mo in income.  Which is substantial.

Also, it may surprise a few of you to learn the idea that not everyone aspires to get paid for doing nothing.  A good many people actually take pride in having a livelihood, and paying their own way in life.  Those type of people really don't want to be a burden to their respective tax base.

I forgot about the tax exemption on the first 2600 for those that do work. That does make a difference. As for the idea that not everyone aspires to get paid to do nothing, while this is true, to deny that many people would do something different (hobbies, sports, travel) rather than work if they could is kind of silly. I don't think everyone would quit their jobs if it was feasible, but enough would to make it a consideration.