OECD Economics Department Working Papers

ISSN :
1815-1973 (online)
DOI :
10.1787/18151973
Hide / Show Abstract
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

 

Making the Tax System Less Distortive in Switzerland You or your institution have access to this content

Click to Access: 
    http://oecd.metastore.ingenta.com/content/5k480c2rt1d3.pdf
  • PDF
  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/making-the-tax-system-less-distortive-in-switzerland_5k480c2rt1d3-en
  • READ
Author(s):
Andrés Fuentes1
Author Affiliations
  • 1: OECD, France

Publication Date
16 Apr 2013
Bibliographic information
No.:
1044
Pages
25
DOI
10.1787/5k480c2rt1d3-en

Hide / Show Abstract

The tax burden in Switzerland is low in international comparison, largely reflecting the substantial non-tax compulsory contributions towards the health and pension systems which are managed by private institutions. Taxation of personal income and labour earnings is relatively high, whereas the taxation of consumption is low. Empirical research on OECD economies and on Switzerland specifically indicates that shifting taxation away from personal income towards the taxation of consumption would strengthen incentives to engage in economic activity. The structure of the corporate tax burden could be improved to remove disincentives for small firms to grow. Reducing the generous provisions which allow interest payments to be deducted from taxable personal income would reduce incentives for households to excessively leverage their wealth, with benefits both for financial stability and equity in the tax system. While tax competition among sub-national authorities has reinforced fiscal discipline, adverse side effects on equity could be reduced, including through greater reliance on real estate taxation in municipalities. This Working Paper relates to the 2012 OECD Economic Survey of Switzerland (www.oecd.org/eco/surveys/switzerland).
Keywords:
taxation, Switzerland
JEL Classification:
  • H2: Public Economics / Taxation, Subsidies, and Revenue