Nothing Cheesy here

Why isn’t Switzerland held up as an impressive economic model for other countries? Why does the IMF ignore its lessons of long-term success when recommending prescriptions to nations that get into trouble? Swiss growth rates, very dependent on exports, have been good despite the country’s low-growth neighbors.

• Taxes. Understanding investment’s basic importance to progress, this Alpine nation imposes no capital gains tax. That’s right: zero. Its value-added tax (VAT)—7.7%—is paltry by European standards, where punishing double-digit levies are the norm. The corporate tax rate averages 17.7%, better than the rates of most of its peers (the rate varies depending on which canton—the equivalent of a state or province—the company is located in; the lowest is a mere 11.5%). The highest personal income tax rate (federal and local) ranges from 22% to 45%. The comparative range in the U.S. is 37% to over 50%.

Naturally, the IMF and all too many economists recommend burdening taxpayers even more.

• Currency. During the past 100 years, no other nation in the world has matched Switzerland for sound money. Not even close. This utterly underappreciated virtue has been crucial to the country’s superb economic performance. Capital creation and investment flourish best when a currency’s value is fixed. Yet the IMF routinely tells troubled clients, such as Argentina, to let theirs “float,” a euphemism for devaluation, to ostensibly spur exports. Left unexplained is how Switzerland has become an export powerhouse despite its supposedly overvalued franc.

The Swiss federal system—in which its 26 cantons have considerable autonomy—has enabled its German-, Frenchand Italian-speaking citizens to live peaceably and productively together for more than 800 years.