Still on hiatus, but had to share this.
From the International Monetary Fund (IMF) October 2013 Fiscal Monitor: Taxing Times, page 49 (my bold added):
Box 6. A One-Off Capital Levy?
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) …
Yes, no doubt “some” of those who have enjoyed the benefits of debt-financed “prosperity” would see a raid on households with real savings as “fair”.
… 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…
We’ve done it before. Why not do it again?
… 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…
Hurry up. Take the prudent savers’ money, before they find out what we’re planning.
… 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.
And there are still some — usually those pillorying excessive private debt — who argue that the level of public debt does not matter.
Some excellent commentary on this IMF document from John Ward at The Slog here.
In other news, it appears the USA has begun to introduce capital controls. From Sovereign Man, October 16:
The path to tyranny is almost always paved with good intentions.
And so, enter stage left, the innocuously named Consumer Financial Protection Bureau (CFPB).
These government agencies with the catchy, high-sounding names are always the most dangerous. After all, it was the ‘Committee for Public Safety’ that was responsible for wanton genocide during the post revolution Reign of Terror in France.
Recently, the CFPB ‘encouraged’ retail banks in the Land of the Free to ‘help’ their customers regarding international wire transfers. And by ‘help’, they mean prohibit.
Of course it’s all for ‘consumer protection’.. So under the guise of safety and security, several banks will curtail retail customers’ abilities to send international wire transfers.
Chase, for example, will start to limit cash withdrawals and ban business customers from sending international wire transfers from November 17 onward.
And starting October 20th, HSBC USA’s Premier clients will have to wait a minimum of five days before transferring funds to their OWN international accounts!
This is the very nature of capital controls– restricting the free flow of capital across borders until it is trapped inside the country and forcibly denominated in a rapidly devaluing currency.
Moral of the above: If your government knows you have it, they will take it.