Behavioral Responses to Special Tax Regimes for the Super-Rich: Insights from Swiss Rich Lists

Abstract

We collect, digitize, and supplement Swiss rich lists published in the “BILANZ” business magazine since 1989, to gain new insights on the structure and dynamics of top wealth in Switzerland. We show that 60% of the super-rich are heirs—a fraction twice as large as in the US, where many super-rich are self-made—and that half of the super-rich residing in Switzerland are foreign-born. Based on this new dataset, we estimate the sensitivity of the location choice of super-rich foreigners to a preferential tax scheme, under which wealthy foreigners are taxed on their expenses, rather than their true income and wealth. We are the first to evaluate this infamous policy (which bears similarities with “non-dom” taxation in the UK or Italy), and show that when some Swiss cantons abolished this practice, their stock of super-rich foreigners dropped by 30% as a consequence. We find no response for the unaffected Swiss super-rich.