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Saturday, March 16, 2013

Cyprus Says Deposit Levy to Involve Bank-Share Compensation - Bloomberg

Wow. This is pretty extreme. Cyprus Says Deposit Levy to Involve Bank-Share Compensation - Bloomberg: "The Cypriot government decided earlier today to impose a 6.75 percent tax on bank deposits as high as 100,000 euros ($130,580) and a 9.9 percent levy on deposits in excess of that amount in order to win a European aid package."

I suppose I can see their point. I guess they figure that most of the large deposits are black money from Russia so no-one is going to complain much about it being "taxed" and, in a way, it's better to extract the money from oligarchs rather than from taxpayers.

Many years ago I was living in Indonesia. One day, the government closed all the banks and abolished the highest denomination banknote which if memory serves was the 10,000 Rupiah note. This was essentially a tax on the Chinese diaspora, because the Chinese didn't trust the banks and kept their money in cash. They woke up and discovered that their stash was worthless and, on the other side of the monetary fence, the government's liabilities for the outstanding notes were wiped out.

Perhaps Baronet Osborne might consider a combination of the two. Close the banks for the day, impose a levy of 10% on all accounts with more than, say, the limit for deposit insurance in them, and simultaneously abolish the £50 note. Yes, there would be a bit of squawking from criminals, drug dealers and money launderers, but I'm sure they'd be prepared to sacrifice for the greater good.

In the future, everyone will be famous to fifteen people.

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