Posted on 10/14/2013 8:49:02 PM PDT by Vince Ferrer
The sharp deterioration of the public finances in many countries has revived interest in a "capital levy" -- a one off tax on private wealth -- as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and, until he changed his mind - Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax - on bondholders- that also falls on nonresidents). There is a surprisingly large amount of experience to draw on, as such levies were widley afopted in Europe after World War I and Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight - in turn spurring inflation. The tax rates needed to bring down public debt to previous levels, moreover, are sizeable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth.
Here is the important part:
if it is implemented before avoidance is possible
The time to get your money out of the Matrix is before they have a chance to act. In the United States, there will be no public debate. Congress will pass the tax at midnight, on a voice vote, and your money will be gone the next day.
total insanity
Here we go. Crash,
Oh Hell no!
M0l0n Labe?
Euro Ping
FYI
Congress?!?!?!
Hell no.
Obama executive order.
You really shouldn’t have all of your wealth locked up in a bank’s computer system. This is why I like physical gold and silver even when it languishes on the trading floor. There’s something to be said for a pile of precious metal hidden away in your gun safe unbeknownst to the government or your future ex-wife and her lawyer. It’s probably sensible to have a pile of federal reserve notes sitting beside it for that matter. just in case.
I agree. Read this earlier today and expect the Fed and the European Central Banks to do this in unison.
I have hardly any money left to lose but my relatives have good IRAs. But no practical way to "get that money out of the matrix".
Coming to an asset near you.
The punishment of savers.
Your squandering family-friends-neighbors win.
magical formula to economic growth
savings -> capital formation -> production -> salary - > consumption
consumption is the effect of an economic growth not the cause. By punishing savers you’re hurting economic growth. Decreases investment/production/salary then ultimately future consumption
Coming soon to a bank or Mutual Fund near you!!
Great minds think alike!
I only glanced at the first page of posts, ya beat me by 6 minutes!
When leftists aren’t actually engaging in thievery, they are busy coining new words for it.
I try not to keep more that $50 in my checking account. I have no savings.
They will take out of your IRA then charge you an early withdrawal penalty.
I think the original income tax here was just a small "fee" for millionaires. It would "never" affect the "common man."
Money is property...this would be a blatant violation of the takings clause.
Not that that would stop Obamao and the dumbocrats. Or many Rinos.
I think for DC to do this would be the end of the Republic, and rightly so.
How would this work with real assets like homes and investment property?
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