Skip to comments.The U.S. Already Has Cyprus-Style Taxes
Posted on 04/22/2013 6:32:22 AM PDT by SeekAndFind
When bailout negotiations among European finance officials and Cypress proposed seizing a portion of bank balances, an enormous outcry arose in many countries at the idea that people's savings could be confiscated by governments with essentially no warning. There have been whisperings in Europe recently that any future bailouts (Spain?) will also include such requirements. People should not be so shocked because wealth taxes or policies that act in a similar manner are much more common than they realize, even in the U.S.
Wealth taxes are currently levied in Europe by France, Iceland, the Netherlands, Norway, and Switzerland, as well as in India. They also have been used within the last twenty years by Austria, Denmark, Finland, Germany, Luxembourg, Sweden, and Spain. They generally charge an annual tax of less than two percent and usually measure nearly all forms of wealth including bank balances, stocks, bonds, real estate (including primary residences), and equity in private businesses.
The U.S. federal government is prohibited from directly levying a wealth tax by the Constitution which restricts such a "direct" tax, allowing it only if the amount is proportional to each state's population. Clearly, a "wealth" tax that is proportional to population instead of wealth makes no sense. This restriction on direct taxes is why a constitutional amendment (the 16th) was needed before the U.S. could have a national income tax.
Absent another constitutional amendment, an overt federal wealth tax would appear to be prohibited. However, the federal government has found a few ways around this restriction, states have no such restriction and freely use wealth taxes, and then there are a myriad of indirect and sneaky ways that financial penalties are put on those who have acquired wealth that serve very much like wealth taxes.
The most obvious way the government gets around the restriction on wealth taxes is patience. The government simply waits until you die. Then the estate tax takes a share of your wealth (currently after an exemption on the first $5.25 million in wealth). Seventeen states also levy estate taxes with exemptions ranging from $675,000 to $5.25 million. So we tax wealth in the U.S. now, on the total value of all assets (even counting non-financial assets like your possessions), we just wait until you cannot complain about it.
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Try making more than 3 transfers a month from your savings account...
They will nail you for that as I have been nailed for that once before...
He forgot the newest one: the 3.8% “Medicare tax” thanks to Obamacare on the sale of your house if you recognize capital gains and have an income of $200K. It doesn’t hit most people, but then again the original AMT wasn’t supposed to hit a lot of people either. When the hyperinflation starts, everybody will get to pay this.
Misspell the country’s name in lede of article about said country = loss all credibility.
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