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Thread: Bundesbank calls for capital levy to avert government bankruptcies

  1. #1

    Bundesbank calls for capital levy to avert government bankruptcies

    Germany's Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.
    The Bundesbank's tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households' average net wealth is higher than in Germany.
    "(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government's obligations before solidarity of other states is required," the Bundesbank said in its monthly report.
    It warned that such a levy carried significant risks and its implementation would not be easy, adding it should only be considered in absolute exceptional cases, for example to avert a looming sovereign insolvency.
    The International Monetary Fund discussed the option in a report in October and said that reducing debt ratios to end-2007 levels for a sample of 15 euro area countries, a tax rate of about 10 percent on households with positive net wealth would be required.
    The German Institute for Economic Research calculated in 2012 that in Germany a 10-percent levy on a tax base derived from a personal allowance of 250,000 euros would add up to around 230 billion euros. It did not give a figure for crisis countries due to lack of sufficient data.
    Greece has been granted bailout funds of 240 billion euros from the euro area, its national central banks and IMF to protect it from a chaotic default and possible exit from the euro zone. Not all funds have been paid out yet.
    In Germany, however, the Bundesbank said it would not support an implementation of a recurrent wealth tax, saying it would harm growth.
    Recent reforms and adjustments in the euro zone's struggling
    countries - Ireland, Greece, Spain, Italy, Cyprus and Portugal - have improved conditions for sustainable growth, the Bundesbank said, but remained concerned about high debt levels.
    It was still a key challenge to drive down public as well as private debt and the ECB's upcoming bank health checks could help to address current problems in the banking sector.
    A successful test could also help to wean banks in the euro zone periphery countries off ECB funding, the Bundesbank said.
    "It is not the purpose of European monetary policy to ensure solvency of national banking systems or governments and it cannot replace necessary economic adjustments or bank balance sheet clean ups," the Bundesbank said.
    Bundesbank calls for capital levy to avert government bankruptcies | Reuters

    The banksters want to tax the savings at 10% ....social arsonists!

    Are all the western countries going to follow this?
    Those who can make you believe absurdities can make you commit atrocities.

    Voltaire


  2. #2
    It will come to pass if the EU finally gets nothing but bankers running it!
    EU is not accountable to any country!
    Germany is a hurting economy as the people are already taxed higher than elsewhere and the people are not spending money.
    More to it, but still, the banks in Germany need money to stay in business and the only way is more taxes.

    Could it spread to other countries?
    Hell yes, if the people allow it!

  3. #3
    Quote Originally Posted by iowadawg View Post
    It will come to pass if the EU finally gets nothing but bankers running it!
    EU is not accountable to any country!
    Germany is a hurting economy as the people are already taxed higher than elsewhere and the people are not spending money.
    More to it, but still, the banks in Germany need money to stay in business and the only way is more taxes.

    Could it spread to other countries?
    Hell yes, if the people allow it!
    I guess the problem is not only the sovereign debt but also the interests that keep growing, until the coffers are empty.

    No wonder why the rich people put their money in fiscal paradises, all gov keep spending too much, look all the waste of money in programs that do not work, and they all prefer to tax the most vulnerable, because it is easier and (for now) they don't revolt.

    The main thing to remember is" What in the hell all gov allow the private bankers to create money, manipulating markets and commodities, etc They could create their own money by their own treasuries department WITHOUT INTERESTS. So why aren't they taking back their primary function back?

    A lot of our taxes and our income tax come from the sovereign debt interests created by the banking cartel.

    Making money without working, when the other people are starving what a fantastic scheme.
    Those who can make you believe absurdities can make you commit atrocities.

    Voltaire


  4. #4
    Rich people do not put their money in banks. They invest it. The rich are wealthy primarily because they don't follow the habits of the middle class.

    That is why taking money away from the rich only further cripples the economy because it cuts off investments. FDR kept us in The Great Depressions much longer than we should have because he pushed through a 94% top marginal tax rate that took almost all the new wealth away from the rich. It took a war to undo his policies.
    "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin


  5. #5
    Quote Originally Posted by TopDogger View Post
    Rich people do not put their money in banks.
    What about offshore banking, shadow banking, etc If it isn't the rich people's money, then what is it?
    Those who can make you believe absurdities can make you commit atrocities.

    Voltaire


  6. #6
    Quote Originally Posted by Franc Tireur View Post
    What about offshore banking, shadow banking, etc If it isn't the rich people's money, then what is it?
    Those are holding areas for temporary excess cash and rainy day cash. Sometimes it is done that way to avoid taxes from overzealous governments and bankers who want to confiscate their funds. Only a small percentage of their wealth is kept in bank accounts. Everything that can be invested is invested somewhere.

    If you had to keep some cash somewhere, would you keep it where socialist governments can take it? The more that governments threaten to tax bank accounts, the more likely it will be that excess cash will be kept somewhere safer than their home country. It is easy to do when business is conducted on an international basis and harder to do when it is all domestic.

    Most wealthy people cannot tell you what they are worth because it changes daily with their investments. When the economy crashed in 2008, many wealth people lost millions and sometimes billions of dollars because the value of their investments crashed with the markets. I read that Bill Gates' net worth plummeted by $20 billion.
    "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin


  7. #7
    Quote Originally Posted by TopDogger View Post
    Those are holding areas for temporary excess cash and rainy day cash.
    I have read that temporary excess cash is becoming permanent cash coffer...

    Everything that can be invested is invested somewhere.
    If it is invested, it isn't excess of cash. Multi national corporations know the trick to hold foreign cash in different countries.

    If you had to keep some cash somewhere, would you keep it where socialist governments can take it? The more that governments threaten to tax bank accounts, the more likely it will be that excess cash will be kept somewhere safer than their home country. It is easy to do when business is conducted on an international basis and harder to do when it is all domestic.
    I guess you are mistaken on this case. The socialist countries tax more than others, but everybody knows that. Now if the political decisions are made to stop the bails out (taxpayers money), and tell the banks that if they make some bad investments, play their customers money and lose at Wall Street or else, the governments could make mandatory that the money lost by bankers will be paid by their customers in a form of bank tax, then if you are rich, where are you going to keep your cash safe?
    Those who can make you believe absurdities can make you commit atrocities.

    Voltaire


  8. #8
    Quote Originally Posted by Franc Tireur View Post
    I have read that temporary excess cash is becoming permanent cash coffer...
    That is very likely because there are very limited opportunities for investment today. Almost no return on their money is better than a negative return from a bad investment.

    The economy is in much worse shape today than it was in 2009. But governments are actively hiding that information and preparing for riots if the worldwide economy crashes completely. They know much more than they are telling us.


    Quote Originally Posted by Franc Tireur View Post
    I guess you are mistaken on this case. The socialist countries tax more than others, but everybody knows that. Now if the political decisions are made to stop the bails out (taxpayers money), and tell the banks that if they make some bad investments, play their customers money and lose at Wall Street or else, the governments could make mandatory that the money lost by bankers will be paid by their customers in a form of bank tax, then if you are rich, where are you going to keep your cash safe?
    I don't think I'm wrong because it is only socialist countries that have the power to confiscate people's bank accounts. The Democrats call for it here, but it is not likely to happen. If you want to protect cash in the bank from being confiscated, you hide it somewhere overseas. You cannot hide it here unless you are storing gold, but even the value of gold crashed over the past year. Swiss bank accounts were always popular in the past because they kept the account holders' information private. Somehow the Obama administration forced the Swiss to turn over that information for the first time, so now Swiss bank accounts are no longer a safe haven for funds.
    "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin


  9. #9
    Quote Originally Posted by TopDogger View Post
    That is very likely because there are very limited opportunities for investment today. Almost no return on their money is better than a negative return from a bad investment.
    If they are real investors and smart people which made them rich already, they will always find a way to make money either in a great economy or in bad economy.


    The economy is in much worse shape today than it was in 2009. But governments are actively hiding that information and preparing for riots if the worldwide economy crashes completely. They know much more than they are telling us.
    That's right it is much worse than 1929. Riots will not resolve anything, just make things worse, now people can protest peacefully against policies and be heard by the legislative and executive branches.

    I don't think I'm wrong because it is only socialist countries that have the power to confiscate people's bank accounts.
    I don't think it would be only socialist countries when it come to state survival, governments cannot save the banks all the time and use the taxpayer's money, the bank need to take responsibility somehow.

    Bundesbank calls for capital levy to avert government bankruptcies
    , it means what the ECB already applied in Cyprus which the banks took more than 10% above 100,000 Euros deposit. Now this policy tend to spread across Europe, and I am sure across other continents.
    Those who can make you believe absurdities can make you commit atrocities.

    Voltaire


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