The student who wants to tax the super-rich to fight climate change

“The rich have benefited from the economic system that caused the climate crisis and even now they often invest in climate-damaging businesses because they are still the most lucrative,” Hostetmann said last week, sipping mate tea at a fashionable café in Berne. She lives in a flat in the city with two like-minded friends and, when not campaigning, is studying for a degree in German and history.

“It is also about their personal lifestyles. The higher the wealth, the higher the emissions. That’s why these issues are linked.”

A native of Obwalden, one of Switzerland’s most rural and conservative cantons, Hostetmann has been unpleasantly surprised by the response she has received, including serious threats, not just online but also in letters delivered to her parents’ home. “I wouldn’t have thought at the beginning that people would get so emotional about taxes,” she said.

Some of Switzerland’s richest people have been vowing to leave the country if the measure is passed, including Urs Wietlisbach, 64, co-founder of Partners Group, an asset management firm, whose heirs could face a tax bill of SwFr 1.4 billion.

“If you have a lot of money, you should share it. Many people in Switzerland do that, they just don’t talk about it,” he said in a recent television appearance, pointing out that he and his wife, Simone, have signed the Giving Pledge, an initiative by Bill Gates, the Microsoft founder, to donate more than half their wealth to philanthropic causes.

“I have nothing against the state but as we all know, it’s not the most efficient organisation,” he added. “Not to brag, but I can distribute the money much better and more efficiently.”

The referendum is unlikely to succeed, with 68 per cent of people opposed, according to a poll last week. But the debate it has unleashed has already had an effect, according to Norbert Kühnis, who is the family business leader at PwC Switzerland, which has carried out two surveys on the subject. “We have been told that it has had a negative effect on people choosing Switzerland as their new home location,” he said. Kühnis said he personally knows two wealthy Swiss entrepreneurs who have already left the country.

Taxing the rich, and especially the super-rich, on their wealth, has become a hot-button issue across the developed world: the idea was central to Zohran Mamdani’s successful campaign to become mayor of New York, and it has become part of the political debate in France, thanks to Gabriel Zucman, a prominent left-wing economist. It has also been the rationale in Britain behind the gradual abolition of “non-dom” status begun by the Conservatives and the rhetoric from the present Labour government to raise the tax burden on those with the “broadest shoulders”.

The concept has proved especially controversial in Switzerland, which has long been generous both towards its own rich citizens and to well-heeled foreigners whom it lures with a “lump sum” tax regime that can exempt a lot of the money earned and wealth held outside the country.

Charlie Chaplin, the actor, was once a beneficiary of the arrangement, which has its origins in a scheme introduced in the western canton of Vaud in 1862. More recent prominent foreigners to take up residence in Switzerland have included the singer Robbie Williams, as well as several leading Formula 1 racing drivers. Their ranks have been swelled by the arrival three years ago of super-rich Norwegians in response to an increase in the wealth tax there. They could, were the Swiss proposal to be backed on Sunday, be rueing their decision to move south.

Since the Young Socialists began gathering the 100,000 signatures needed to bring about a national referendum in Switzerland, their opponents have been fighting back.

The “no” lobby had a budget of SwFr 3.67 million, much of it from business and industry groups — nine times the SwFr 400,000 spent by Hostetmann’s camp — according to the Swiss Federal Audit Office. The opponents’ main argument has been the potential impact on the many Swiss companies that are family owned: they warn that heirs would face huge tax bills when parents die, forcing them either to sell, perhaps to foreign buyers, or break up the businesses.

“This is what would cause the greatest damage, which would be borne by the public as a whole,” said Benjamin Mühlemann, an MP and co-president of the centre-right Free Democratic Party. “It would also drive the best taxpayers out of the country.” The UK’s abolition of its “non-dom” regime showed the perils, he said. “Thousands of millionaires have left Great Britain … [causing a] shortfall in tax revenue.”

That is the message of the Instagram and TikTok videos that have been produced for the Free Democratic Party by Elisa Strebel, a 21-year-old economics student and influencer, which have attracted more than 1.5 million views.

“The wealthiest 1 per cent of our population already pay the majority of our taxes,” she told me. “Punishing them again would be counterproductive.”

Such concerns appear to be underpinned by a study, commissioned by the Swiss government, on the likely effects of the tax by Marius Brülhart, a professor of economics at Lausanne University. He believes that the extra billions of Swiss francs which proponents claim would be raised by the new tax could be more than wiped out by the departure of those affected for neighbouring Austria, which has abolished inheritance tax, or Italy, which has been successfully wooing the rich with its own flat tax scheme.

“Even at an advanced age, very wealthy taxpayers don’t normally stay frozen where they are when inheritance taxes are increased,” Brülhart said. “They think about how to lessen the pain for their heirs, and they have the money to relocate.”

He estimates the net effect of the planned new tax at anything between a net loss of SwFr 700 million to a modest gain of SwFr 300 million. “It would be little more than a rounding error, given annual total tax revenue of more than SwFr 170 billion,” he said.

Even if, as expected, the measure is defeated on Sunday, Hostetmann believes the Young Socialists’ campaign has not been in vain. “Switzerland pursues an aggressive low-tax policy that is very harmful to many other countries by attracting rich foreigners here,” she said.

“We have now spent a year talking about wealth inequality and more about the climate again. This is extremely important for future political efforts, which will hopefully also come from other parties.”