Cyprus levies 10% tax on all bank accounts, Europe panics

[Circe]

Insurance won't cover valid taxing authority.

So when they suck the money out of peoples' accounts they call it a tax, or a loan, or a voluntary gift, or a stabilization fee, or some other creative name, but it's still a default. My personal favorite in name-fudging is Cardinal Wolsey's "Amicable Grant" of 1525. That is, the people all had to grant the money to him and Henry VIII for his usual French wars. Amicably.

I guess you are probably right, that this is what will happen, but it's not just. It's like the "voluntary haircut" that Greek bondholders had to take perforce did not trigger off the credit deposit insurance supposed to be paid on bond losses.........because, see, they were voluntary.

Sure they were.

 

[GHook93]

The wealth tax has arrived. No longer do liberals want future success they want current success. Check list: Income, Sales, Sin, Gas, Utilities, Property, VAT (in Europe), Hotel Rooms, Prepared Foods, Liquor, Cigarrettes, Capital Gains, Death/Estate Tax, Payroll, Medicare/Medicaid, SSN, driving on highways (what do you think tolls are), etc. They have run out of thinks to tax, so they go after ceasing wealth. How long before they tax a person's nest egg? Taxing bank accounts is the first step!

 

[Circe]

Here's what I mean about the deposit insurance problem, in Reuters today:

Cyprus was forced to announce a plan to claw back a levy on deposits from savers in its banks, including - most controversially - a big charge on those with small deposits that were supposed to be guaranteed by its deposit insurance scheme.

The outcome caused fury on the streets of the Mediterranean island state, where people quickly emptied out the cash machines to get at their savings. By Monday morning, the jitters spread across the continent, with share prices falling in London, Frankfurt and Paris.

Cyprus - barely 0.2 percent of Europe's economy - was the tail wagging the EU dog, sowing uncertainty that raised the prospect that savers elsewhere would flee their banks.

Merkel's government and EU officials were determined to make depositors pay. Anastasiades was determined to cap the levy on the wealthiest depositors at no more than 10 percent.

That meant that small savers in Cyprus were forced to pay a levy as high as 6.75 percent of their deposits, a move that effectively rips up the protection savers thought they enjoyed on insured deposits of up to 100,000.

Because Cyprus had been a successful and profitable tax haven, the other EU members wanted to break that -- by forcing Cyprus to confiscate as much as a fifth of all high-amount accounts, and thus causing rich Russians, mostly, to flee elsewhere with their money. Putin is offering 2.5 billion Euros if they do NOT do this, however.

But the prime minister of Cyprus held firm: he would not "tax" the high-level accounts more than 9.9%, and thus outraged bank depositors all over the world, including here, are concerned at the interesting news that a government may at any moment simply suck our money out of our bank accounts. And that the so-called depositors' insurance is useless in this emergency, somehow.

This is really outrageous.

 

[GHook93]

This is a very bad idea.

Which will be coming to America eventually. You can't keep spending at the rate we are without having to pay the bill someday. Contrary to popular opinion, the wealthy don't have enough money to pay it. It will eventually be everyone's "responsibility" to bail the government out.......even the 47% who pay no income tax.

No it won't.

Man you guys are paranoid.

So naive. You know when they enacted an income tax, they said they would stop there. Eventually it more came a calling: Payroll (SSN, Medicare, Medicaid), property taxes, sin taxes (alcohol, tabacco), gas, utilities, cable, sales, corporate, capital gains, death/estates, hotel stays, prepared foods, medical devices, drugs/medicines, airfare, tollways etc. Taxes have snowballed and morphed from few taxes into the 30s and 40s to unconsicousable amounts today. Also when then enact a tax, it never gets repealed and SELDOMLY get reduced!

Around the corner is a VAT tax! Yet even after that they still will have a huge budget deficit. The only thing left is a wealth tax! I could see, DEMOCRATS leving an annual tax on the amount of wealth a person has accummulated. Calculate your properties worth, stock, bonds, gold, money in the bank, paintings, valuables etc and here is you wealth tax! They will sell it to the poor easily. They will sell it to the middle class, but starting it out high such as $10 mil and greater and then gradually move it down, closer and closer to the middle class!

 

[waltky]

Granny says, "Dat's right...

... there's yer flat tax fer ya...

... whadaya think of it now?"

 

[Politico]

Sheeple panic is hilarious. Where is this Cipress place anyway?

 

[waltky]

Where is this Cipress place anyway?

Google the word...

... Cyprus...

... Granny says ya shoulda graduated high school.

 

[Circe]

Sheeple panic is hilarious. Where is this Cipress place anyway?

Never mind, Politico. It's not one of our 57 states, so you don't have to worry about it.

 

[kwc57]

Sheeple panic is hilarious. Where is this Cipress place anyway?

Fat, drunk and stupid is no way to go thru life.

 

[Connery]

A bank run.... reminds me of "It's A Wonderful Life"....

If the country wanted a percentage of the savings they should have enacted a tax or surcharge and given the public adequate notice.

 

[Polk]

I read elsewhere, and agree with the idea, that imagine if Chavez had taken 10% of bank deposits to prop up the state-run oil company. The howls from the "free enterprise" types would have been deafening. When it's done to support "free, private" enterprise though, it's suddenly acceptable.

 

[Circe]

If the country wanted a percentage of the savings they should have enacted a tax or surcharge and given the public adequate notice.

They did enact a tax, or they are trying to....

It's just a very, very SUDDEN tax.

My reading generally agrees that deposit insurance in Europe just died. Who can believe in it now, since they are clearly planning to default on a percentage of all bank accounts. But they aren't proposing to make it up with the deposit insurance................

The EU policymakers are clear, and are saying so plainly: from now on, bail-outs have to have involuntary and sudden "help" from people who have bank accounts. And no deposit insurance for any such overnight electronic robbery: just suck it up.

This could be the beginning of the end of the EU.

 

[Polk]

Technically speaking, a wealth tax doesn't undermine the deposit guarantees, though I can see how it partly has that effect in practice.

 

[oldfart]

There is no reason the rest of us should pay for their government.

The poor get most of the advantage, such as it is, from government. Let them pay for it.

The old saw is "Taxes are the price we pay for civilization". Most of the benefits of civilization go to the very wealthy. If they get greedy, they run the risk of revolution, either political or violent. If the wealthy cannot make a compact with the 99% of the population that actually creates goods and services, then I have little sympathy for what they get, if the control of the courts, government, police, military, and other sources of forcible intervention are insufficient to protect them.

If you think the bloated military and militarized police in the United States are for the protection and benefit of the lower classes, you are living in a different reality from most of us.

 

[whitehall]

Rich Russians (yes there are rich Russians) are especially concerned because they have a lot of money deposited in Cyprus banks. Russia threatens to withhold a loan if Cyprus goes through with it's plan to rob bank accounts.

 

[Circe]

There is no reason the rest of us should pay for their government.

The poor get most of the advantage, such as it is, from government. Let them pay for it.

The old saw is "Taxes are the price we pay for civilization". Most of the benefits of civilization go to the very wealthy. If they get greedy, they run the risk of revolution, either political or violent. If the wealthy cannot make a compact with the 99% of the population that actually creates goods and services, then I have little sympathy for what they get, if the control of the courts, government, police, military, and other sources of forcible intervention are insufficient to protect them.

If you think the bloated military and militarized police in the United States are for the protection and benefit of the lower classes, you are living in a different reality from most of us.

I guess I'm living in a different reality from you, anyway, Oldfart, darn.

I recognize a lot of people think the rich get the goods of government, such as they are, but they are wrong, IMO.

It is the poor who NEED policing, as the poor have far more criminality, as every statistic shows. Left without government, as in Haiti or much of Africa, their lives are Hobbesian: solitary, poor, nasty, brutish and short. With the elaborate policing we have, they can get obese and have big TVs. You sure don't see any obese Afghans. And much of their food is government paid for. Their schooling is paid for and required: where do the poor get that in less-governed countries? They have infrastructure: trains and buses and autos and good roads: you see any good roads in Africa? How about hundreds of people hanging to the outside of trains in India?

I could go on about the poor and good government but the rich don't need ANY of that and never have. The rich have big gated communities, big gated houses, they have now and always did have guards. The rich don't use public transport! They don't even use public airplanes. They have their own transport, and they don't have to bother with TSA searches, either. The rich certainly do not need public schools and rarely use them -- though they have to pay the taxes for the poor and middle class to use them. The rich certainly do not need or want all the hindering laws about the environment, food safety, worker safety, etc., etc. -- those advantages are all to the poor and do nothing for the rich but prevent them making so much money. Andrew Carnagie, I have read, was far richer than Bill Gates in proportion to his times, because there weren't so many laws against his getting rich then as there are now, nor high taxes.

No, the poor definitely get nearly all the value, such as it is, out of government. The rich not only don't need it, they'd like less and vanishingly less. Government does nothing at all for the rich but pick their pockets because there aren't enough of them to revolt; revolution comes from the poor, where the numbers are.

Government actively harms the rich, and yet the rich have to pay for it all --- for the benefit of the poor.

I question that. Let the poor pay for their own government.

 

[PaulS1950]

This is truly a terrible situation. It is just like what FDR did when he confiscated all the gold that US citizens had. Don't think it won't happen here! the USA is headed to lose the status of the reserve money of the world and when that happens we will experience very high double or even tripple digit inflation. I would recommend that you start getting rid of your dollars, US government bonds and any other form of currency that the government can take. The rest of the world is getting fed up with the deficit spending and increasing debt that the US continues to use to keep from going under. We are less than ten or twenty years from a total monetary collapse in this country. This government has proven that they will do whatever is necessary to protect itself - even at the expense of it's citizens.