Which state pays the most federal taxes?

The top 5 percent pay two thirds of the direct federal tax

The latest federal data shows the tax progression at work: A small minority provides the majority of federal income from income tax.

How much should one redistribute from top to bottom? This question is one of the permanent core conflicts in politics. There is no “right” or “wrong” answer, just different opinions. The data now published by the Federal Tax Administration for 2016 illustrate that the progression in direct federal tax includes a strong redistribution.

According to this data, the 5% with the highest income declared a quarter of all taxable income and paid over two thirds of the direct federal tax on it. This group includes around 250,000 people with taxable income of over CHF 150,000. Payments in the top per mille with taxable income of around CHF 1 million made up almost 40% of tax income. Meanwhile, the lower half with taxable income of up to CHF 46,600 contributed just over 2% to federal income tax. The federal government collects a total of CHF 10 to 11 billion from income tax each year.

The progression is less pronounced in the cantons. In terms of amount, the income taxes of the cantons and communes are much more significant than those for the federal government. Detailed evaluations for the cantons for 2016 are not yet available, but on the basis of earlier evaluations it can be assumed that, including the income for the cantons and communes, the top 5% contribute over 40% to the total income tax of over CHF 50 billion annually and the top fifth pays around 70% of income taxes in total. Another billions are redistributed annually through the AHV; In this social welfare work, wage contributions above a certain income are in fact taxes because they do not increase the pension of those concerned. Including such AHV contributions, depending on the canton and municipality, high earners donate between 30% and over 50% of their maximum taxed income to the state.

Whether one assesses the tax contributions of high earners as “too high”, “too low” or “about right” depends on the basic political attitude. In any case, one should remember from time to time that the redistribution via tax progression reaches a considerable extent year after year.