IMF Discusses A Super Tax Of 10% On All Savings In Eurozone

" One of the latest reports from the IMF discusses a super taxation of 10% on savings in the Eurozone. That would solve the debt problem in most sovereign countries. It would be an alternative of higher taxes or spending cuts.

The economists who wrote the paper hasten to say that it is a theoretical proposal. Still, it appears to be “an efficient solution” for the debt problem. For a group of 15 European countries such a measure would bring the debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008 crisis.

The report itself is embedded at the bottom of this article. In the last section of the report, on page 58, right before the appendices, it says:

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 widely adopted in Europe after World War I and in 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 precrisis levels, moreover, are sizable: 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(*).

(*) IMF staff calculcation using the Eurosystem’s Household Finance and Consumption Survey; unweighted average. "



http://goldsilverworlds.com/money-c...a-super-tax-of-10-on-all-savings-in-eurozone/

 

Hope there is not anyone dumb enough to have money in a Eurozone bank here!

 

Don't worry. I don't know where they got the idea it would be limited to the Eurozone. The pdf from the IMF, if I am right, concerns a GLOBAL solution:

http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf

 

Haven't read that pdf, does it say 10% on all savings globally?

I think it's time to pull the IMF's funding!

 

No, but to my understanding, it's just a pdf about taxes and fiscal solutions worldwide and this capital tax is one solution( p 49 )...I don't know where they got the idea it was for the eurozone.

I posted an article by forbes last month about it( economics forum ) and it was about "global wealth confiscation"...

 

the thieves could just take over the swiss banks

 

I'm not sure this is a politically viable option because there would be hell to pay for any politicians in office. It seems there are more "stealthful" ways to confiscate money.

 

no honor among thieves,the thieves would stand upright while accusing the tax dodging thieves of a heinous crime...on 2nd thought, the banks are running the crime ring and wouldn't confiscate from themselves

 

What would the reaction be in the EZ?

 

it's not up to the IMF, so their opinion isn't that relevant. no way this will happen, every single politician in power will be finished. politicians are way too much short term focused and power-hungry to let this happen.

the imf guy should be fired. not for the idea itself, but suggesting the population might perceive such a supertax to be "fair". of course, looking at the bigger picture, the euro-economy, perhaps it isn't such a bad idea. but it is extremely unfair to the individual, which would make it full-out criminal to charge such a tax, which, i can assure everybody with euro-savings, just won't happen.
there are lots of measures one can take to improve the economy as a whole and specifically the level of government debt, like for example to euthanize everybody on welfare in the eurozone. just think of the amounts you will save. i don't see the imf arguing we should to that though.