Entrepreneurs are not walking tax bases. Wealth is not a social offence. And a country does not become richer by driving away the people who create prosperity.
Yet economic success is increasingly discussed as if it required political justification.
Those who own a lot should pay more. Those who have built a business should pay again when they pass it on to the next generation. Anyone who objects is quickly put on the defensive.
The liberal counter-question is: What does a country actually lose when successful entrepreneurs and wealthy families leave?
The answer is: far more than tax revenue.
Entrepreneurial wealth is not a pile of cash
The wealth of a family entrepreneur rarely sits in a bank account.
It is tied up in companies, factories, machinery, patents, inventories and shareholdings. It is equity. It absorbs losses, supports borrowing and finances investment.
A wealth tax therefore does not automatically tax disposable luxury. It can tax capital that is working inside a business.
Switzerland is one of the few OECD countries that still levies a general wealth tax. Holdings in unlisted companies are generally part of taxable wealth, although cantons apply different valuation and relief rules. The OECD explicitly points out that wealth taxes can create liquidity problems where assets are illiquid.
The problem is simple: Taxes have to be paid in cash. Company values do not necessarily consist of cash.
Someone who owns a business worth CHF 50 million does not automatically have CHF 50 million in liquidity.
That distinction is surprisingly often lost in political debate.
Taxes change behaviour
Switzerland can measure this.
A study published in the American Economic Journal: Economic Policy analysed differences between Swiss cantons. Its finding: when a cantonal wealth tax rate falls by one percentage point, declared taxable wealth rises by at least 43 per cent after six years.
The researchers attribute around 24 per cent of the effect to taxpayer mobility and around 21 per cent to rising property prices. For a significant part of the remaining effect, they find evidence of changes in reporting behaviour.
The key lesson is not that every wealthy person leaves a canton after a tax increase.
It is much simpler:
People respond to taxes.
So does capital.
That is why Swiss tax competition is more than a marketing tool for locations. Cantons are free to raise or lower taxes. But they also have to live with the economic consequences.
Power is constrained.
That is federalism in its most economic form.
Norway shows how mobile entrepreneurs have become
Norway increased wealth taxation from 2022 onwards and subsequently tightened dividend taxation as well. In particular, the government increased the valuation of shareholdings for wealth-tax purposes and introduced a higher rate for large fortunes.
In the same year, according to Norwegian population registers, at least 30 wealthy entrepreneurs and investors deregistered and moved abroad. Switzerland was one of the most popular destinations.
Norway subsequently tightened its exit-tax regime. The reforms were designed in particular to prevent unrealised gains accumulated while a person was subject to Norwegian taxation from permanently escaping Norwegian tax after emigration.
One can take different views on the tax policy.
But the economic message is difficult to ignore:
When a country needs rules to determine how much wealth can still be taxed when people leave, mobility is no longer a theoretical risk.
France shows that the cost is more complicated than a tax bill
Until 2017, France imposed a broad wealth tax known as the ISF.
According to France Stratégie, between 2011 and 2016 an average of around 370 wealth-tax households returned to France each year. Around 950 left.
After the ISF was replaced by the more narrowly focused real-estate wealth tax, the IFI, the picture changed. Between 2018 and 2021, an average of around 380 households returned each year, while only around 260 left. France Stratégie explicitly cautions against drawing a simple causal conclusion from these figures. At the same time, the reform came at a substantial cost in direct tax revenue. For 2022, the difference was estimated at around EUR 4.5 billion.
That is precisely why the usual debate is too narrow.
The relevant question is not:
How much tax does an entrepreneur pay this year?
It is:
Where will that entrepreneur’s capital be in ten years? Where will the next generation start businesses? Where will the next company be created? Where will investments be made? Where will the family office be based? Where will a foundation be established?
Those effects never appear fully in short-term tax statistics.
The United Kingdom provides the necessary counter-example
A liberal argument should take its counter-examples seriously.
In 2017, the United Kingdom tightened the rules for long-term resident non-doms. A later HMRC evaluation found that the reform did indeed lead to additional departures. Long-term non-doms affected by the reform were 10 to 12 per cent more likely to emigrate.
Most nevertheless stayed.
And those who stayed paid substantially more tax. HMRC estimates additional revenues of around GBP 1 billion in both 2018/19 and 2019/20 compared with a scenario without the reform.
That disproves one simplistic claim:
Higher taxes do not automatically lead to lower tax revenues.
But it does not prove that mobility is irrelevant.
Since 6 April 2025, the United Kingdom has operated a fundamentally different system. The previous remittance basis was replaced by a residence-based regime with a special four-year rule for qualifying new residents.
The fiscal balance can be measured.
The long-term effect on investment, company formation and location decisions will be far harder to quantify.
Germany shows what lies behind the label “the wealthy”
Public debate likes to talk abstractly about “the rich”.
The structure of German business shows how misleading that can be.
According to a ZEW study published in 2025, 88 per cent of private companies in Germany are family-controlled. They employ 18.3 million people, accounting for 58 per cent of all private-sector employees.
Behind large private fortunes there are therefore often no anonymous financial portfolios.
There are companies.
Jobs.
Factories.
Suppliers.
Apprenticeships.
And owners who carry responsibility for decades.
Anyone discussing the taxation of large fortunes should therefore at least ask what exactly is being taxed.
The JUSO initiative made the conflict visible
The Swiss initiative “For a Social Climate Policy – Tax-Financed Fairly” proposed a federal inheritance and gift tax of 50 per cent on the portion of an estate or gift exceeding CHF 50 million.
On 30 November 2025, 78.28 per cent of voters rejected the initiative. Not a single canton voted in favour.
The debate around large family-owned companies highlighted the central problem of any tax based on substance:
The value of a company is not the same as available liquidity.
A large tax bill at the moment of succession can therefore affect liquidity, ownership structures or the financing of a company.
The OECD points to precisely this issue in the context of inheritance taxes on family businesses and notes that many countries therefore provide special rules.
That is not an argument for making inheritances tax-free as a matter of principle.
It is an argument against treating business assets as if they were cash sitting in a vault.
Entrepreneurs create more than companies
The contribution of wealthy entrepreneurs does not end at the factory gate.
Swiss entrepreneur Heinrich Gebert endowed the Gebert Rüf Foundation with CHF 220 million. By the end of 2025, the foundation had invested CHF 292.4 million directly in projects. According to its own evaluations, 35 per cent of the completed projects examined led to the creation of a start-up.
In Germany, the Robert Bosch Stiftung invested around EUR 195 million in health, education and global issues in 2025 alone. Since its creation, it has provided more than EUR 2.7 billion for charitable work.
These examples are not substitutes for taxation.
They illustrate that private wealth can generate social value without first passing through a government budget.
A pluralistic society consists of more than the state and the individual.
Between them stand companies, foundations, associations, universities, philanthropists, investors and private initiatives.
It is precisely this diversity that limits power.
Economic success is not a moral failing
This is where the real dividing line in the debate lies.
One can view wealth primarily as a distribution problem.
Or one can first ask how that wealth was created and what it makes possible.
Of course, wealth generated through corruption, fraud or political privilege deserves no special protection.
But in a market economy, substantial wealth is often created because someone starts a company, takes risks, creates jobs, invests and remains an owner for decades.
To then place the result under moral suspicion sends a peculiar message to the next generation of entrepreneurs.
The state can tax. It cannot legislate entrepreneurship into existence.
A state can tax income.
It can tax wealth.
It can tax inheritances.
It can tighten rules and invent new taxes.
What it cannot create by law are risk-taking, trust, owner responsibility and an entrepreneurial tradition.
From a liberal perspective, this does not imply a state without taxes.
It implies a restrained state that understands that its own economic foundation is created outside the state.
Legal certainty.
Property rights.
Predictable taxation.
Competition.
And respect for economic success.
The most important question for sensible location policy is therefore not:
How much more can we take from successful people?
It is:
What must we do to ensure that people who create companies, invest capital and assume responsibility still want to invest here tomorrow?
Because when they leave, a country may first lose a taxpayer.
Then perhaps an investor.
Then a decision-making centre.
Later, a foundation.
And eventually an entire generation of entrepreneurs.
Only the first loss ever appears on the tax bill.