Why The Failing US and EU Should Follow the Swiss Government Model

The European Union and the United States should consider the successful freedom model of Swiss confederation government rather than the failed top down examples of other nations and empires. Few would question that Switzerland is the most secure, stable, and freedom-oriented nation in the world but it is time to ask what is so unique about the Swiss.

The answer is there is nothing particularly different about the nation or its people. They like to work hard, play hard and provide a good life for their families. So do the citizens of most other nations when given the opportunity.

They prefer peace and diplomacy to war and aggression but will fight to defend their independence and liberties. They prefer a stable currency, low taxes, financial privacy, economic prosperity and a government that represents and defends the people. Again, these are not unusual wants but few nations and governments provide an opportunity for these basic human needs and rights to flourish.

So why is Switzerland different? Here are some examples of why the Swiss government model works and the European Union and American Union have failed to deliver on their big-government utopian promises.

National Expansion By Voluntary Association vs Force – The term "Willensnation" is a Swiss concept of national growth and expansion by attraction through the voluntary association of neighboring principalities, cities, and individuals. This makes Switzerland a nation created by acts of free will rather than force. Growth by attraction of those willing to be part of the Helvetian Confederation rather than war and invasion have served the Swiss well over the last few hundred years of peace and prosperity.

How totally different from the American model of "manifest destiny" and military aggression which is how most of the national expansion of the United States took place. The growth of the Union was followed again by force with the outright invasion of the Southern states that decided to leave by Lincoln’s armies during the War Between the States.

The history of Europe has been far worse than the US both historically and now with the EU. Today the citizens in most European nations were never allowed the opportunity to vote on throwing away their national sovereignty and coming under EU rule. Whether these nations can voluntarily withdraw is still an open question.

Tax Competition vs Forced Tax Harmonization – In Switzerland the vast majority of taxes are collected at the canton (state) level while the federal income tax level is quite small and comparable to state tax rates in the United States. This allows different cantons and even localities in individual cantons to dramatically compete for residents, corporations, businesses and even retirees.

The tax difference can range over 20% of income from high-tax cantons like Zurich and Geneva to low-tax jurisdictions like Zug. Tax competition keeps the cantonal governments lean and productive and the politicians honest. Retirees from outside Switzerland can even create a type of low-bid competition for a set amount or percentage tax rate between cantons. This is the ultimate in tax competition.

In the US, there is little reason to move or locate businesses in specific states because the majority of the parasitic tax burden is universal at the federal level. The tax difference between the few states with no income tax and the others is minimal and with most states and cities on the verge of bankruptcy like the federal government, taxes will be rising everywhere.

It is the same with the failing European Union. The EU preference is a harmonized tax rate that guarantees a steady supply of revenue to governments and politicians and the ultimate goal is to end low-tax jurisdictions so there will be no tax competition. For example the EU requires a VAT tax of at least 15% in each country whether the nation or people want or need this burden on top of already crushing income tax rates.

Competing Currencies vs Currency Monopoly – In Switzerland, most retailers, hotels and restaurants will gladly price your purchase in Swiss francs or the Euro depending on your preference. Change is given in Swiss francs but the freedom to choose your preferred currency is usually available. Recently, in the Zurich train station, Burger King was even accepting dollars on a one to one basis with the Swiss franc.

Contrast Swiss currency competition to the silence from US political establishment when Ron Paul called for currency competition here in the US. Private entities like the Liberty Dollar people are threatened and imprisoned just for attempting to offer a gold and silver alternative to the Federal Reserve’s fiat paper dollars which have an intrinsic value of absolute zero.

Here the European Union nations do have a possible alternative to the Euro. Each nation should again issue their own currency and allow it to circulate with the Euro with each national central bank or treasury pegging the national currency in a range relative to the Euro just like the Swiss central bank does.