IMF Proposing a NEW 10% SUPER-TAX BAIL-IN taken from ALL Accounts!

The Independent – The economic nightmare may not be over for Europe

35-Mario-Draghi-EPA

The October 2013 IMF report: Fiscal Monitor : Taxing Times,
Further details on the topic from page 23, in the chapter called:

Taxing Our Way Out Of – Or Into? – Trouble

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. (1) 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 non-residents).

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 pre-crisis 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 . (2)

(1) As for instance in Bach (2012).   (2) IMF staff calculation using the Eurosystems Household Finance and   Consumption Survey (Household Finance and Consumption Network, 2013);   unweighted average.

It should probably be obvious that there is one key sentence here, one   which explains why the IMF is seriously considering the capital levy   (supertax) option, even if it’s presented as hypothetical:

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). !?

 

2 thoughts on “IMF Proposing a NEW 10% SUPER-TAX BAIL-IN taken from ALL Accounts!

  1. Pingback: Is a Large Wealth Grab on the Way? | « Olduvaiblog: Musings on the coming collapse

  2. Pingback: IMF Lays The Groundwork For Global Wealth Confiscation | Global Clarity

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