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Old 28.07.2011, 20:03
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Re: If Zug is the lowest taxed canton, why don't all businesses simply just move ther

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No wonder some of you in tax havens think Switzerland is a bit miserable. Most people I know choose to be where they live because of friends, family, nice atmosphere, etc - and therefore life is enjoyable there. If too many people go to an area just for tax reasons- it must be full of ex-pats and perhaps Swiss with other 'colder' priorities- which perhaps doesn't make for a friendly feel.
So true. But the rest of us are quite happy not to have such people as neighbours so maybe tax havens do serve a good purpose after all.
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Old 28.07.2011, 20:29
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Re: If Zug is the lowest taxed canton, why don't all businesses simply just move ther

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I read somewhere that Luzern will have the lowest coorporate tax rate next year....so maybe Zug will empty out a bit !
Nidwalden has the lowest taxes for businesses, but it is in the middle of nowhere.
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Old 28.07.2011, 21:09
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Re: If Zug is the lowest taxed canton, why don't all businesses simply just move ther

Back to the pure question.....there is a reason that Zug has low tax rates....same as the Isle of Man, same as British Virgin islands etc....its because for places with no manufacturing, no agriculture to sustain the economy, earning 3% tax of lots of service industries and holding companies, is better than earning 20% tax from nothing. "Tax havens" are a creative way of earning money for places that haven't got much else, it isn't because the residents have a deep desire for more expats and rich idiots!

And why don't all businesses move there? Same reason that most of us buy our bread from Coop rather than Aldi - because there are sometimes more important factors than money. But mainly because the cost of moving a business is huge...you want to move an office of 200 people, then you have to pay them a lot more to move, OR fire them all ($) then rehire ($), train ($), and find new premises ($) plus plus plus.....You can't always transition easily and cheaply
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Old 28.07.2011, 22:28
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Re: If Zug is the lowest taxed canton, why don't all businesses simply just move ther

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Hehe. Well, if everyone just did their own research from scratch, we wouldn't even need these forums. I'm asking here because I thought that maybe somebody already had gone through "a few years of business school, and maybe one or two years experiencing life" so they could summarize their wisdom in a few sentences :P
It's an economics question, not one for a business guy. Anyways,

a) Taxes are not lost money. What you choose with your location is a package of taxes and public goods / public services. Other things equal, people will choose the package that best fits their needs. ( http://en.wikipedia.org/wiki/Tiebout_model )

b) Taxes capitalize into housing prices - the lower the taxes, the higher housing prices. If this house price capitalization is complete, there's no incentive to move for anyone (again, other things equal). http://www.sciencedirect.com/science...51137710000306

c) If house price capitalization is incomplete, people differ in their level of income, and the tax schedule is not flat but progressive, rich people will move to low tax places, and poor people will move to high tax places (again, other things equal). http://kof.ethz.ch/de/publikationen/...ng-papers/240/

d) other things ain't equal. Proximity to friends, family, workplace and your favourite pub do count, as well as any other idiosynchratic feature of a city (traffic connection, nightlife, socio-demographics, healthcare and whatnot).
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