Switzerland's Cheesy Economy
While the Swiss economy is often cited as a major success story today, it's not always what it seems. The Swiss economy is known to be incredibly complex, and tellingly its politicians have been responsible for the country's current economic situation. This leaves many small cities struggling to find ways to increase revenue while implementing new policies that they deem necessary.
The article dives deeper into how some of these small cities are succeeding in obtaining more taxes from their more affluent residents and businesses in order to provide a better quality of life for their citizens as well as combat issues like poverty and unemployment.
The implementation of these new policies have been incredibly controversial though, as many Swiss citizens feel their country is becoming more like the United States with these extra taxes. However, this view is changing as they are slowly witnessing the positive effects of their government's actions.
Before diving into the current economic situation and how this has played out for small towns in Switzerland, it's important to know how the Swiss economy works in general. The Swiss economy relies heavily on exports and banking/financial sectors, two industries that were both hurt immensely during the recent financial crisis. As a result, unemployment rates skyrocketed to an all-time high in 2014 and have stayed there ever since.
In our first article of 2014, we dive deeper into the Swiss banking industry as an example of how the Swiss economy has changed in recent years. This leads to the question, are these small cities getting a raw deal? Are they being forced to implement new tax policies because of their reliance on industries that were hurt during the recession? What exactly is happening in Switzerland?
It's time to dive into just what's going on in Switzerland, a land rich with culture and natural beauty. Artists like Peter Seitz have made a name for themselves by depicting Swiss culture. This beautiful piece depicts a small town celebrating its relationship with the very large train station it serves.
While this painting portrays a place in Switzerland that relies on the train station for revenue, this article will dive deeper into the small cities that have had to find ways to generate more income for themselves.
The article covers the recent changes in taxes for beer, cigarettes, and income tax. This is an example of an area where the government is passing on some of the cost to its citizens in order to help with poverty and unemployment rates throughout these cities. As a result, many Swiss citizens are less than happy with their politicians while others are beginning to see the benefits of these new tax policies.
The article also covers the areas in which Switzerland has been praised for, its tourism industry. Tourism is a booming industry thanks to Switzerland's unique landscape and culture. However, with this success comes new problems that the locals are struggling to combat.
Many residents in the Swiss small towns have large investments in their homes, which in turn raises the cost of living for many of them. Alongside these rising costs of living, many locals are seeing less jobs available to them as more people continue to move into cities like Zurich and Geneva (the two main hubs for tourists). This is leading to very high unemployment rates for many Swiss citizens.
While the article mentions an increase in work visas, many citizens from the small towns are making it extremely difficult for these workers to find any jobs. This is leading many to move elsewhere as well. This in turn makes it even more difficult for Swiss citizens living in these small towns to find employment.
The article also dives deeper into the situation with coffee and how it's contributing to the overall economy of Switzerland. Coffee alone accounts for over half of Switzerland's exports, which is quite a positive move since this was one of the hardest hit industries during the recession. However, diversifying is difficult when you're relying on the exact same industry/sector as your competitors are relying on. As a result, many of the small towns are struggling to find ways to increase revenue in order to combat their high unemployment rates.
We have also included a video with quotes from the mayor of Eglisau (a small town in Switzerland) as well as some of the opinions and feelings of the citizens.
As we dive into Switzerland's economic situation, it's important to remember that the country is not without its problems. It is important to look deeper than what you see on the surface and all of these problems don't just stem from one city or one sector. The recession hit Switzerland hard and has lead to many cities implementing new policies and taxes that benefit all citizens rather than just themselves.
Written by: Conor Risch
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Conclusion
Overall, it's a good article for those who want to know a bit more about Switzerland and its economy. Even if you are not interested in learning more about the country, the article is still worth checking out as it does shed some light on the problems that many Swiss citizens are facing thanks to their high taxes.
You can read the entire story over at Forbes. However, we have included an excerpt below for your convenience.
“The changes in how Swiss towns are financed sound like a novel idea founded by New York City Mayor Bill de Blasio: replacing property taxes with payroll taxes, known as payroll tax or employer-based payments.