> Instead of taxing salaries at high percentages — a practice that puts most of the tax burden on the middle class, where most income comes from wages and not from capital gains — Switzerland immediately taxes dividends at a maximum of 35 percent and also has a wealth-based tax.

That's the secret. The Swiss are brave enough to tax the wealth. They are not afraid to do so. They also are extremely respectful of their electorate: They do referendums often and for any reason (building a bridge or allowing foreigners to work in their country). There is a sort of just distribution of social responsibility which unfortunately lacks elsewhere.

If you look for the city with highest living standard in the world though, it's not in Switzerland but right next to it, the beautiful Vienna :-)