A Swiss-style wealth tax is being put forward as a less disruptive alternative to the far higher levies gaining support in the United States, with a 0.5% charge on the richest households estimated to raise about $200 billion (£150 billion) a year.
Warren Gorlick, a retired Treasury Department policy adviser, argues that Switzerland’s experience shows a modest tax on assets can coexist with a thriving destination for wealthy people. Swiss cantons have imposed wealth taxes for more than a century, while the country remains one of the world’s richest on a per-capita basis.
Each canton sets its own rate. In Zurich, a married couple with $2.5 million in net assets would pay an effective rate of about 0.24%, or roughly $6,000 a year, under the example cited by Mr Gorlick.
For an individual with $1 billion, the effective rate would be about 0.7%, producing an annual bill of $7 million. Mr Gorlick said the number of adults holding between $5 million and $10 million in assets had nevertheless grown by an average of 7.4% a year between 2000 and 2025.
California wealth tax sparks debate
The comparison comes as California considers Proposition 40, a ballot initiative that would impose a one-off tax equivalent to 5% of the assets of residents worth more than $1 billion.
Polling has suggested a close contest, but the proposal has already been followed by the departure of some wealthy Californians. Sergey Brin, Google’s co-founder, has moved to Nevada and contributed more than $100 million to the campaign against the billionaire tax, while Uber co-founder Travis Kalanick has confirmed that he relocated to Texas.
Supporters argue that California’s ultra-wealthy would remain among the richest people in the world despite the levy, pointing to the state’s artificial intelligence boom. Opponents warn that the tax may not remain a one-off measure and that the way assets are valued could force some start-up founders to sell controlling stakes to meet the bill.
Governor Gavin Newsom opposes Proposition 40 but supports a nationwide wealth tax. Senator Elizabeth Warren has proposed a 2% levy on wealth above $50 million and 3% on assets above $1 billion, while Senator Bernie Sanders and Representative Ro Khanna have introduced legislation for a 5% tax on billionaires.
Scott Kirby, the chief executive of United Airlines, has also said the US should introduce a national wealth tax. A group of Nobel laureate economists supporting Proposition 40 said the measure could “kickstart a movement” that spreads to other states and countries.
Mr Gorlick cautioned that not all wealth generates a regular income. A 5% annual charge on $1 billion in assets would create a $50 million bill, potentially requiring an individual to sell holdings to pay it.
“Few people will muster much sympathy for a billionaire’s tax problem, but a wealth tax that assumes capital can be taxed indefinitely at a high rate is a wealth tax that ultimately won’t be paid, because the wealth — or its owner — will simply be gone,” he wrote in a Washington Post opinion article.
He suggested that a 0.5% levy on $1 billion of assets, amounting to $5 million a year, would be less likely to prompt billionaires to move abroad. Applied to the richest 1% of US households, he estimated, it could raise about $200 billion annually.
That sum would be small compared with America’s $40 trillion debt and the $7.4 trillion spent by the federal government in fiscal 2026. However, Mr Gorlick said a modest wealth tax could raise substantial revenue without increasing income tax, at a time when defence spending is expected to rise and the Social Security retirement trust fund faces insolvency in six years.
“A modest wealth tax won’t, by itself, solve America’s $2 trillion annual deficit,” he wrote. “But it would be a meaningful down payment toward addressing America’s fiscal imbalance — one that both sides could get behind.”
