Direct democracy at work (fourth post)

In this fourth post, I translate the arguments that the committee who gathered the signatures for the referendum puts forward for tomorrow’s, Sept. 26th, referendum.

As I already said, the referendum proposes to reduce taxes on salaries and to increase them for incomes derived from capital, such as business, from shares, from selling crypto currencies, etc.

Like in my previous translations, I may add details not included in the original document in order to facilitate the understanding of the non-Swiss reader.

Here is the translation:

The cashier at the store, the freelance graphic designer or the bricklayer, all work to earn an income. But there is also a small group of people who do not need to work because they let their money work for them. Thanks to interest, profits on shares or dividends, i.e. income from capital, the rich are getting richer and richer, while the 99% of the population suffer from rising rents and health insurance premiums.

Wealth inequality has been growing for years. Already in 2016, the richest 1 percent of the Swiss population owned 42.3 percent of the global wealth in Switzerland. This means 99% owned 57.7%.

Thanks to dividends and profits from shares, the richest are putting more and more money into their pockets. But this money is not then available for wages, which have been stagnating for years, while rents and health insurance premiums are rising. The coronavirus pandemic has made the situation even worse. The wealth of the 300 richest people has reached a record high of 707 billion francs, while countless people face uncertain economic prospects.

Growing inequality also hurts the economy. Much of the wealth of the richest people is used to speculate in the financial markets and therefore does not feed the real economy. If working people benefited from this money, it would flow back into the economic cycle and purchasing power would increase. Small businesses, which suffered greatly during the pandemic, would also benefit.

Currently, capital income is privileged in several ways. For example, large shareholders only have to pay taxes on 70% of their capital income, while everyone else pays taxes on their entire income. We owe our prosperity to the people who work every day in offices, on construction sites and at home. Right now, the richest 1% are getting richer at the expense of all of us, and they still have a tax advantage.

The 99% initiative will allow us to tax large and important shareholders more fairly and to relieve the 99% of the population. The revenue raised will lower taxes for people with low and middle incomes and to strengthen public services, for example by reducing health premiums or providing more money for childcare. The 99% initiative is a first step towards tax justice!

The initiative committee therefore recommends that you vote: Yes

The Swiss Executive and the Swiss Parliament, in the same information package, recommend to voters to reject the initiative, with the arguments I already translated.

Is interesting to note that many entrepreneurs support the initiative, although the initiative is proposed by the organisation Young Socialists.

So that you get a feel for who those entrepreneurs are, I include their names and their business.

This also illustrates how direct democracy introduces diversity into political decisions; in Switzerland, many entrepreneurs side with leftists on this issue. I believe in representative democracies this is less likely; entrepreneurs are not likely to vote for Socialists.

In representative democracies, issues are more polarised. It is as if people affiliated themselves with political “religions”, with certain dogmas.

By the way, in tomorrow’s vote, it is likely voters will reject the initiative; it seems Swiss voters understand the issues and the effects of increasing taxes to capital, that it is a delicate balance; taxing capital too high might reduce employment in Switzerland because business might not come, might leave, might decrease investment in research, etc.

Swiss voters are also acutely aware that when they decide taxation levels and other issues, they literally take responsibility for the fate of their country, their lives, and the lives of their children. They can not blame the politicians.

In representative democracies, proportional or not, the people elect the politicians, but the politicians decide all issues.

It is also possible that Swiss voters make better political decisions because they know they can not later say: “the politicians are the ones to blame, nothing we can do”.

The system of direct democracy forced voters, at least the more aware voters, to inform themselves.

Turnout in Swiss referendums is normally relatively low, around 40%, although in some issues can reach 70%.

Some people are quick to speak of “voter fatigue” to explain the relatively low turnouts; that is just idle speculation. Voter turnout could be low also because many people aero not too interested in some issues. For example, most Swiss may not care about gay marriage, or about a commercial treaty with Indonesia, or about joining the United Nations, or limiting the growth of cities.

It is also possible many voters feel comfortable letting more interested and, therefore, better informed voters decide any of the above or other issues.

Nevertheless, 90% of Swiss voters vote on referendums if we consider all the referendums taking place in one year.

Tomorrow, again, Swiss voters will show the World how the people there decide issues than in other countries the elected politicians, or the dictator in charge, decide.

Victor Lopez

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