Today I am reading that the Cyprus economic saga ended with an abomination of a compromise. I am left wondering what is going to happen next in Europe and I really worry that nothing good will come out of this widespread economic catastrophe.
After all, Ireland, Portugal, Spain, Italy, Greece, and Cyprus have had to each be bailed out during the past several years.
In Cyprus it was decided that all private bank account balances of more than E100,000 will be 'taxed' with a 'one time' 30% tax.
Hocus pocus magicus! Close your eyes and watch this trick: You no longer have E100,000 in your savings account but only E70,000. Thanks for playing, suckers! Even casinos take your money more pleasantly than the government. To which I say: Fool me once shame on you, fool me twice shame on me.
It is not necessarily that large deposits will be taxed at an outrageous rate but that most bank deposits cannot be accessed -except for modicum amounts- at all during this round of political and financial negotiations. In other words, bank owners' deposits are literally being held hostage to political and economical processes they did not cause directly (or indirectly, as a mater of fact).
How can this theft be justified and -let alone debated and considered- by law principles, constitutional practices, and economic theories? This is pure and unadulterated theft. Call it whatever you want but in my eyes this is highway robbery and no less than racketeering.
People have no legal recourse whatsoever and no way to challenge the legality of the Cyprus government action of holding bank deposits hostage while a law to tax them is being debated. It is like the movie 'Dead Man Walking'. This sort of government action cannot be called democracy. It is textbook communism.
The Cyprus government is saying: I take 30% of your money and then you are free to go. I already have your money and you can do nothing about that.
How can individuals defend against such irresponsible moves in the future? This action will freeze people's financial actions and they will do all they can to not hold money in places where governments can get to it.
If I were to have hacked all the bank accounts in Cyprus and simply stolen 30% of each bank deposit holding a balance of more than E100,000 I would be sought after by all police agencies on the planet. No questions, buts, and ifs about that.
When the government of Cyprus does it under the directions of international financial agencies they call it 'bailing out'. Really? Isn't this the core of the definition of asymmetric economic warfare?
I believe that money in banks over 100,000E in Europe is unsecured. Cyprus is a tax haven. How terrible is it for those with more than 100,000 to lose 30% of it? Isn't it kind of like paying fair taxes (i.e. an extra 10%) over (just) 3 years?
ReplyDeleteEven so, the tax code cannot be just changed overnight. It needs to be debated and discussed in a public forum. Otherwise, we would never, ever know how much our taxes are going to be. What do you think is going to happen if you do not know what your tax liability is?
DeleteI agree with what you're saying. But if you put your money in a tax shelter country, this is the reality of your gamble.
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