what is the economy of switzerland like?

[Matt B]

is it completely free market capitalism? is it close, but with some regulations? and if so, to what extent? are wealthier people taxed higher? whats socialized? etc..

[zigibumbala]

The economy of Switzerland is amongst the most free in the world. It ranks 4th according to the Economic Freedom of the World survey, and 5th on the Index of Economic Freedom (in both cases, the US rank 10th).

Regulations are, when comparing with other European countries, fairly lenient in many aspects of life. One example is the absence of a law on minimum wages; instead, unions and companies are encouraged to negotiate on collective labour agreements (instead of workers going on strike or crying out for government intervention).

Taxation of income and assets is done so on a progressive scale: the wealthier someone is, the higher the tax-rate.

In some cantons (states), wealthy foreigners can elude progressive taxation through lump-sum taxation (which means that you can bargain with the government on how high your tax will be). Many Swiss deem these laws as unfair, because they only apply to foreigners and the lump-sums that have to be paid are random. That's why recently, quite a few cantons have held public votes that have led to the abolishment of said tax.

When it comes to "what's socialised", I guess you mean state welfare, of which Switzerland maintains a very high standard. For instance, about a third of the federal budget is spent on social welfare.

Health insurance (with a private company of choice) is mandatory, and the cantons subsidise insurance premiums for about a third of the population. Unemployment insurance is mandatory, too, and is state-run. If anyone falls through the cracks, municipalities are required to provide social welfare benefits. These are usually just around the poverty-line, but cover the costs of housing, healthcare and everyday commodities -combined with a strong focus on re-employment.

[Kevin Cheng]

the wealthier you are the higher you are tax