Cyprus bank-account tax possible in US?

[Twotonsteak]

On Friday Cyprus, a small island-nation east of Greece and south of Turkey, announced a 6-10% tax on all bank accounts. They announced the tax AFTER banks had closed. As expected the announcement caused a run on ATM's...most of which were "out of order." Monday is a bank holiday in Cyprus and the countries Government, fearing the banks would be wiped out, closed all of them until Thursday.

Now here is the real "kicker." The individual doesn't have to file anything for the "tax." Instead, as part of the plan, the countries Government was just going to go in to the bank accounts and take it.

Cyprus decided on this rather rash act as part of an effort to acquire an EU bailout. And it's already had effects on the US markets.

I will be the first to admit that we, in the US, aren't that bad...yet. However we have a President that has shown a distinct interest in raising taxes when-ever, where-ever, he can. So my question is this: should the US be concerned about our own government attempting something similar to what Cyprus is doing?

[finchna]

well, looking at your sig it would probably serve no purpose replying to the question you asked so....

[Twotonsteak]

well, looking at your sig it would probably serve no purpose replying to the question you asked so....

My only intent was to explain recent events that are effecting the US economy. The question was designed to spur discussion. I would have preferred constructive discussion.

You are capable of constructive discussion, yes?

---------- Post added 2013-03-18 at 10:42 PM ----------

No, and where is your evidence saying the US' economic conditions would get so bad we would even have to consider such a thing?

And also, if I were a citizen of a country, would I rather keep all my money, and not have the 6-10% tax taken out, and have the country's economy then completely collapse and then I'm left with no money, or lose 6-10% of my money in my bank accounts, to prevent the further loss of money.

I would choose the later, lose a little money now, keep the country afloat, and regain my money later.

It's a terrible situation, but the decision to try and prevent the collapse of the country, by taxing bank accounts seems to me to be the right decision, since the alternative is complete economic collapse.

Running in a continuous debt with no interest or plan to balance the budget? I'd say that's a fairly good start. However try to stay on topic. And the topic is whether what is happening in Cyprus, in terms of the tax, is something we in the US should be worried about happening here?

[Deadvolcanoes]

Can't we just print money? Pretty sure Cyprus doesn't have that ability.

[Ult92]

I would say that it is unlikely. You have to consider that small EU member states (and to some extent even the larger ones) are at the will of the European Commission, the European Central Bank, and the IMF (and and Germans, of course, who hold considerable sway). They need this bailout and have little influence over the institutions that force it upon them.

As far as I'm concerned, a tax is a tax. We tax cigarettes, gas, earned income, etc. For employees, the government already withholds much of the taxes from their paycheck. My primary concern when it comes to the type of tax is which type of person it would impact the most. Sales taxes tend to be harder on low-income people, as opposed to say, taxes on dividends and capital gains (as low-income people don't usually own stocks).

So long as the tax is progressive, and other taxes are perhaps reduced in turn, I would be open to at least consider a tax on bank accounts. It does seem counter-intuitive though, especially for lenders. Nobody will want to keep their money in a bank account unless the amount received from interest exceeds the amount taken away by the tax.

It's no different than any other tax. You just do a cost-benefit analysis.

[Lefeng]

Can't we just print money? Pretty sure Cyprus doesn't have that ability.

1. http://www.youtube.com/watch?v=Vg4-gMW89E0 for a lesson on inflation.

2. How do you figure Cyprus can't print more money? They obviously have printed currency, and I seriously doubt they outsource it to another nation. Also, refer to #1 for why that is a very bad idea.

A small European nation in financial crisis taxing private bank accounts hardly is an indicator of what the US will do. Oh, and by the way OP, President Obama can't raise taxes without the consent of Congress. Oh, and by the way, raising taxes was an absolutely necessary step to offset the catastrophic federal deficit that President Bush created. Even if a Republican was elected in 2008 they would have had to raise taxes as well. The Bush tax cuts were a political move, the kind that they pass on to "the next guy" to deal with.

[Ult92]

1. http://www.youtube.com/watch?v=Vg4-gMW89E0 for a lesson on inflation.

2. How do you figure Cyprus can't print more money? They obviously have printed currency, and I seriously doubt they outsource it to another nation. Also, refer to #1 for why that is a very bad idea.

A small European nation in financial crisis taxing private bank accounts hardly is an indicator of what the US will do. Oh, and by the way OP, President Obama can't raise taxes without the consent of Congress. Oh, and by the way, raising taxes was an absolutely necessary step to offset the catastrophic federal deficit that President Bush created. Even if a Republican was elected in 2008 they would have had to raise taxes as well. The Bush tax cuts were a political move, the kind that they pass on to "the next guy" to deal with.

What are you talking about? (point #2). Cyprus has indeed outsourced its currency - it no longer has its own and CANNOT print money. Cyprus is on the EURO.

[Wells]

On Friday Cyprus, a small island-nation east of Greece and south of Turkey, announced a 6-10% tax on all bank accounts. They announced the tax AFTER banks had closed. As expected the announcement caused a run on ATM's...most of which were "out of order." Monday is a bank holiday in Cyprus and the countries Government, fearing the banks would be wiped out, closed all of them until Thursday.

Now here is the real "kicker." The individual doesn't have to file anything for the "tax." Instead, as part of the plan, the countries Government was just going to go in to the bank accounts and take it.

Cyprus decided on this rather rash act as part of an effort to acquire an EU bailout. And it's already had effects on the US markets.

I will be the first to admit that we, in the US, aren't that bad...yet. However we have a President that has shown a distinct interest in raising taxes when-ever, where-ever, he can. So my question is this: should the US be concerned about our own government attempting something similar to what Cyprus is doing?

Oh christ can we have some less fear mongering about raising the tax rate to what it was under Clinton?

[Twotonsteak]

1. http://www.youtube.com/watch?v=Vg4-gMW89E0 for a lesson on inflation.

2. How do you figure Cyprus can't print more money? They obviously have printed currency, and I seriously doubt they outsource it to another nation. Also, refer to #1 for why that is a very bad idea.

A small European nation in financial crisis taxing private bank accounts hardly is an indicator of what the US will do. Oh, and by the way OP, President Obama can't raise taxes without the consent of Congress. Oh, and by the way, raising taxes was an absolutely necessary step to offset the catastrophic federal deficit that President Bush created. Even if a Republican was elected in 2008 they would have had to raise taxes as well. The Bush tax cuts were a political move, the kind that they pass on to "the next guy" to deal with.

As a member of the EU Cyprus share's it's currency with other EU nations. As a result they don't have the authority to just print money. As Deadvolcano pointed out we could just print money. However that would devalue the dollar even further and lead to inflation.

---------- Post added 2013-03-18 at 11:04 PM ----------

Oh christ can we have some less fear mongering about raising the tax rate to what it was under Clinton?

I opened this thread up to discussion to get the opinion and views of other people. At no point have I expressed any opinion either way regarding whether this would or would not happen.

Are you so paranoid that the simple act of relaying a story, widely covered by various media sources, somehow constitutes "fear mongering?"

[Ult92]

As a member of the EU Cyprus share's it's currency with other EU nations. As a result they don't have the authority to just print money. As Deadvolcano pointed out we could just print money. However that would devalue the dollar even further and lead to inflation.

You make two assumptions here:

1) Printing money would "devalue the dollar even further." When you say this, you seem to imply that devaluation of the currency is bad. It is not always so. A cheaper currency makes important goods from other countries more expensive for us, and makes our exports cheaper for people in other countries (thus boosting exports). A weak currency can be a bad thing sometimes, but don't just assume it always is.

2) Printing money does not always lead to inflation as many like to suggest. In particular, when the economy is deeply depressed, inflation becomes unlikely. The Fed is now on it's third round of "quantitative easing" and inflation is still at reasonably low levels (as has been at record lows for the past few years).

[Wells]

I opened this thread up to discussion to get the opinion and views of other people. At no point have I expressed any opinion either way regarding whether this would or would not happen.

Are you so paranoid that the simple act of relaying a story, widely covered by various media sources, somehow constitutes "fear mongering?"

Taking a story then going "HEY GUYS OBAMA LOVES TAXES MAYBE HE'LL DO THIS TOO" is exactly that.

[Laize]

On Friday Cyprus, a small island-nation east of Greece and south of Turkey, announced a 6-10% tax on all bank accounts. They announced the tax AFTER banks had closed. As expected the announcement caused a run on ATM's...most of which were "out of order." Monday is a bank holiday in Cyprus and the countries Government, fearing the banks would be wiped out, closed all of them until Thursday.

Now here is the real "kicker." The individual doesn't have to file anything for the "tax." Instead, as part of the plan, the countries Government was just going to go in to the bank accounts and take it.

Cyprus decided on this rather rash act as part of an effort to acquire an EU bailout. And it's already had effects on the US markets.

I will be the first to admit that we, in the US, aren't that bad...yet. However we have a President that has shown a distinct interest in raising taxes when-ever, where-ever, he can. So my question is this: should the US be concerned about our own government attempting something similar to what Cyprus is doing?

Wait a second.

Cyprus is going to remove 6-10% of their money from their banks?

Good fucking lord... if they didn't need a bailout before they'll need one now.

The Great Depression in the US was caused by a removal of 30% of the money supply... and Cyprus is removing 10%? It might not be a worldwide catastrophe, but it sure as shit won't be good.

[Masark]

Wait a second.

Cyprus is going to remove 6-10% of their money from their banks?

Good fucking lord... if they didn't need a bailout before they'll need one now.

The Great Depression in the US was caused by a removal of 30% of the money supply... and Cyprus is removing 10%? It might not be a worldwide catastrophe, but it sure as shit won't be good.

Nothing is being removed. It's being moved in the form of a tax.

Though this is still a horrible idea. It's going to utterly destroy faith in depository institutions and strongly discourage saving.

[Twotonsteak]

Taking a story then going "HEY GUYS OBAMA LOVES TAXES MAYBE HE'LL DO THIS TOO" is exactly that.

I highlighted our current presidents interest in finding "revenue." That's a known, heavily documented, fact. I used it as a reminder of the atmosphere we live in. I also said that we weren't in the sort of fiscal mess that Cyprus was.

I mean do I REALLY have to outline every single detail, of every single fact, just so people like you won't try to derail the conversation with unfounded accusations? Are you THAT bent on politics and Obama that you see everything as an attack against him?

Look at the other responses in this thread. Look at my other responses in this thread. Have you seen me post anything partisan in this thread other than ::gasp:: acknowledging that our President has raised taxes? (And even you have to admit that that's pretty much a fact.)

[Caiada]

That would require assuming American economists are morons and that conditions have degraded far beyond what anyone would reasonably predict, so no, I seriously doubt this would ever happen in the US. Small European island states are not significantly comparable with the US.

[The One Percent]

Nothing is being removed. It's being moved in the form of a tax.

Though this is still a horrible idea. It's going to utterly destroy faith in depository institutions and strongly discourage saving.

Saving isn't good for economy. You want people out spending. People will still hoard their money though, just in personal safes most likely.

[Wells]

I love how responding to the OP is derailing the thread.

Of course the president has raised taxes. Slightly. Questioning whether the government is going to supersede its authority and just take a ton of money out of accounts is just stupid at best and intentional fear mongering at worst.

[Abysal]

Is it possible? Sure, given enough time almost anything is possible. Is it something to expect any time soon? No.

[Bonsaii]

On Friday Cyprus, a small island-nation east of Greece and south of Turkey, announced a 6-10% tax on all bank accounts. They announced the tax AFTER banks had closed. As expected the announcement caused a run on ATM's...most of which were "out of order." Monday is a bank holiday in Cyprus and the countries Government, fearing the banks would be wiped out, closed all of them until Thursday.

Now here is the real "kicker." The individual doesn't have to file anything for the "tax." Instead, as part of the plan, the countries Government was just going to go in to the bank accounts and take it.

Cyprus decided on this rather rash act as part of an effort to acquire an EU bailout. And it's already had effects on the US markets.

I will be the first to admit that we, in the US, aren't that bad...yet. However we have a President that has shown a distinct interest in raising taxes when-ever, where-ever, he can. So my question is this: should the US be concerned about our own government attempting something similar to what Cyprus is doing?

You sound like a very unhappy camper. Possibly one whos spent a long time in the woods not following real politics. Obama does not just raise taxes for the fuck of it, although he does find more use in raising them than cutting. I haven't seen anything that's really that excessive though.

In addition such an action would be declared unconstitutional.

[bufferunderrun]

In italy when euro was created the fuckers of the gov put a 0.6% tax on all the accounts, from that day this bastard is called "the vampire".