Cyprus bank-account tax possible in US?

[petej0]

Read what I said... Your financial gain... you only gain from interest... Common sense helps sometimes

The exception to the rule however is, that your bank reports your balance to the IRS.... if your income from work or other sources you've claimed in your tax returns don't match with what goes in your bank, you do have some explaining to do.....

Let's say your incomes from work and/or other sources are 100k a year, yet your bank account shows that you got 200k. You have to explain to the IRS where the additional 100K come from, and why it isn't subject to taxes.

"in the USA your bank account is subject to taxation."

The wording can be easily confusing...your savings are not the item being taxed. The interest you earned is the portion that is taxed.

[Deleted]

To be fair Cyprus is know as the only remaining tax heaven in EU, fiscally. So you do know how akward would the meet be when EU representatives all in suites is thinking to bail Cyprus, and Cyprus representative comes as the guy in mid '30 still wearing "Power Ranger" shirt. That's a good comparison, on how their economy is. Now consider that about 50% bank deposits in Cyprus banks are owned by non-EU people, vast majority of russians you know some(more) of such money are "gray" at best.

Cypriot banks have a total 68 billion deposits (more or less). 43 billions deposits belong to Cypriots. So claiming that 50% of the deposits do not belong to Cypriots is not true.

So this measure does affect a very few of Cyrpus residents. And get your facts right: tax is only for bank deposits over 20k euro, from 20k-100k it's 7%, over 100k it's 10% and the "sweet" measure is that all bank deposits get's ensure by state in the case that the bank goes under (fiscally for the russians it's almost like money laundering with the state if the bank collapses).

Your comment regarding moneylaundering is obsolete. Cyprus is one of the most heavy regulated countries in the EU and the world regarding money laundering. Cyprus has more regulations against money laundering than Germany. The reason Russians come to Cyprus is due to bilateral agreements between Cyprus and Russian Federation hence they avoid double taxation. They get taxed in Cyprus and not in Russia with better terms. Everything is done within the law.

The vast majority of deposits over 100k euro have russian owners, so any taxation of them is a "good" for EU since they are non-EU and used Cypus banks since they give better interest then in Russia and less paperwork (gray money). Add on that the bank deposits are on term, 2-5 years, as in you can't operate that money else you will loose the nice interest you will gain once the period is over.

How do you know that the vast majority of deposits over 100k belong to russian owners. Post any statistic regarding that if that is the case. I have to remind you that there is a vast majority of Provident Funds of some big companies in Cyprus as well. Speculations of that kind i think do not reflect reality.

[Deleted]

Cypriot banks have a total 68 billion deposits (more or less). 43 billions deposits belong to Cypriots. So claiming that 50% of the deposits do not belong to Cypriots is not true.



Your comment regarding moneylaundering is obsolete. Cyprus is one of the most heavy regulated countries in the EU and the world regarding money laundering. Cyprus has more regulations against money laundering than Germany. The reason Russians come to Cyprus is due to bilateral agreements between Cyprus and Russian Federation hence they avoid double taxation. They get taxed in Cyprus and not in Russia with better terms. Everything is done within the law.



How do you know that the vast majority of deposits over 100k belong to russian owners. Post any statistic regarding that if that is the case. I have to remind you that there is a vast majority of Provident Funds of some big companies in Cyprus as well. Speculations of that kind i think do not reflect reality.

1. Out of that 43 billions belong of cypriots it includes people with british-cyprus citizenship, the ones that dodge taxes in UK and move their money to Cyprus. So the real number goes down at what I said. Subtract out of that the account that have under 20k euro, you know the accounts that most "normal" hard working cypriot has.

2. Because the sources of the money are unknown, it's gray money at best. And in case of legal problem in Russia, their accounts in Cyprus is protected, now even more. Since if the measure is in place, tha taxing done on accounts over 100k, that 9.9% tax will make the deposit be ensured by EU, so basically, gray money deposited by russians in Cyprus banks will be national guranteed. Seems about right, not? That's what the russian should do, pump more, then simulate a fall, break the system, bank collapse, government bails them out, ensured account get's their money, laundry 101 between russian mob - Cyprus/EU government.

3. Look it up, lots of sources specifiy it.

Bottom line still is: this measure is one of the mildest ever, you should be greatefull you didn't have to experience asking bailout from IMF. Thanks to eu currency and EU bank, IMF can't even "play". While even this option of aditional taxation is not very good, I don't like it, it's necessary since the bank deposits were and are almost like an industry for Cyprus.

And since Cyprus taxation is very low in the EU, this measure is done to have the least impact on it's economy and it's people.

So bottom line is: you want to save money, keep it in your country and don't use offshore account, or bitch when set country changes it's laws and you as non-citizen have nothing to say in it.

[SirRobin]

Are we finally getting a reckoning?

03/19 15:27 CDT Cyprus simmers, gold rush continues

Cyprus simmers, gold rush continues

By The Associated Press
Investors kept plowing money into gold on Tuesday, seeking a safe-haven
investment as tension over the bank bailout in Cyprus intensified.

Gold for April delivery was up $6.70 to $1,611.30 per ounce, even as prices
fell for other key metals, oil and many U.S. stocks.

The financial crisis in Cyprus has thrown markets around the world into
disarray since Monday. Europe's bailout plan for the small country included
taxing deposits in the country's banks _ essentially making anyone with money
in a bank help pay for the bailout. The plan met harsh resistance, and Cyprus
lawmakers rejected it on Tuesday.

For many investors, tension like that is a prime opportunity for buying gold,
which can be viewed as a low-risk investment in times of geopolitical or
economic turmoil.

"The situation in Cyprus has caused uncertainty," said Jim Wyckoff, senior
analyst at Kitco.com. "We're hearing all kinds of rumors and reports, and
that's caused further unease."

Industrial metals were down. May copper fell 2.25 cents to $3.4055 per pound.
June palladium plunged $29.65, nearly 4 percent, to $735.20 per ounce. April
platinum fell $23.80, or 1.5 percent, to $1,555.40 per ounce.

May silver was virtually flat, slipping 3.1 cents to $28.843 per ounce.

Benchmark oil for April delivery fell $1.58 to $92.16 a barrel on the New York
Mercantile Exchange. Brent crude, used to price many kinds of oil imported by
U.S. refineries, dropped $2.06 to $107.45 per barrel in London.

In other energy trading, wholesale gasoline lost 8 cents to $3.05 a gallon.
Heating oil fell 6 cents to $2.86 a gallon.

Natural gas was the exception. It rose 9 cents to $3.97 per 1,000 cubic feet,
boosted by predictions that cold weather will continue through the rest of the
month.

Prices for key agricultural commodities were split. Wyckoff said they have
struggled for direction in the absence of any major macroeconomic news, though
that could change when the government releases the "planting intentions" report
at the end of the month.

Prices for wheat and corn both rose more than 1 percent. Wheat was up 9.25
cents to $7.22 per bushel. Corn rose 8.5 cents to $7.285 per bushel. Soybeans
slipped, edging down 2.75 cents to $14.0675 per bushel.

[Deleted]

Cypriot banks have a total 68 billion deposits (more or less). 43 billions deposits belong to Cypriots. So claiming that 50% of the deposits do not belong to Cypriots is not true.

This is in agreement to the numbers that I have read as well. It seems to be a 60:40 split.

Your comment regarding moneylaundering is obsolete. [...]

Nope. While Cyprus does have decent regulations for money laundering but they simply are not enforced. An analogy is the Greek taxation system. It had normal regulations but nobody was enforcing it that lead to tax evasion.

How do you know that the vast majority of deposits over 100k belong to russian owners. [...]

According to German analists (these are estimations of course) around 15 billion euros in deposits (or 60% of foreign deposists) are held by Russians. Since normally only wealthy individuals invest their money into foreign countries it is save to say that almost all of these accounts have more than 100k euros in them (which really is not a lot).

These numbers are further strengthend by the strong discouragement of the Russian government to tax the deposits (both Putin and Medwedew comdemned it).

---

As my opinion:
I thought this was a very sensible move honestly. Do you expect your neighbours to pay your taxes/depts for you? I don't. 10% or 6% is really not much if it means that many people can keep their jobs and also most of their deposits.

I mean they even modified it to leave rather poor people out of it (accounts of less than 20k euros).
Yet the parliament declined it with 0 approving votes.

I personally hope that now the EU will just let them go bankrupt. There were debates if Greece was systematically important (due to it's small economic power), Cyprus definately is not. I see no reason for the other EU members to act. It was their right to make the decision but now they have to live with the consequences.

---

As on topic:
Once the US banks are as fucked as ones in Cyprus are I think that a step like a 10% tax would happen and be sensible. However the US has a completely different banking system (mostly private) so it is hard to compare.

What is important to remember:
If you bail a bank out with tax money (which the US has done) it is essentially the same thing as taking money from your deposits as you will have to come up with that bailout money in the future (anyone that thinks the banks will pay you back with interest is just silly).
A taxation like this is just less visible to the citizen so people probably don't care as much.

[Laize]

If it prevents the total economic collapse of the country, then sadly it is the best course of action that the government can currently pursue.

Either way, the country is in a pretty shitty spot, hopefully this will get them out of the mess quicker, and less painful than full on collapse would.

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.

I don't think you understand.

Coercively removing money from the banks is a very bad idea.

The nature of fractional reserve banking dictates that for every dollar you put into a bank, $9 more are created. The same works in reverse. If you take $6 billion from the banks, that effect will ripple throughout the system until $60 billion is removed.

This is exactly what happened that was the primary cause of the Great Depression. The United States economy lost about 30% of its money supply over 10 years due to runs on banks causing failures, which caused further runs on other banks, causing further failures.

The end result was a massive reduction in the money supply in the US which resulted in horrid deflationary spiral.

[Deleted]

I don't think you understand.

Coercively removing money from the banks is a very bad idea.

The nature of fractional reserve banking dictates that for every dollar you put into a bank, $9 more are created. The same works in reverse. If you take $6 billion from the banks, that effect will ripple throughout the system until $60 billion is removed.

This is exactly what happened that was the primary cause of the Great Depression. The United States economy lost about 30% of its money supply over 10 years due to runs on banks causing failures, which caused further runs on other banks, causing further failures.

The end result was a massive reduction in the money supply in the US which resulted in horrid deflationary spiral.

Except you have the European Bank that supervises them and does ship ton of money. Each week they fly euro cash into Greece to help them maintain their cash supply...I know it's fucked but that's how it is right now. The only thing they don't understand yet that a crisis you can't fix via a pen, cut here, add there, keep inflation on check and so on. You need to stimulate development, real physical ones, help business make jobs, help the advance and so on.

That being said, this bailout measure was voted against in Cypruss yesterday so it won't be applied. Let's see what they will do next.

[Cthulhu 2020]

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.

I've come to find that "Having a civil discussion" in the eyes of some people on this forum is, rather than exploring and discussing multiple points of view and the merits and downfalls of various systems, they will instead bandstand the merits of their own system of beliefs, while ignoring the downfalls, meanwhile denouncing any merits of opposing views as utterly false and exaggerating the overall downfalls of opposing systems.

In short, there often isn't a discussion to be had, but rather an attempt at indoctrination that "TAXES IS BAD, OBAMA IS DICTATOR".

[Planetarism]

I find myself in the admittedly extremist position of agreeing w/ OP's sig, though I must frown heavily at his transparent grab to at some sensational news to twist it into a contrived red herring..

Also, you guys realize banks like all big corporations have huge government lobbying right especially in the US? So..they WANT people to keep depositing their savings & leaving 'em there at piddly <1% APR's..they certainly don't want to lose any. Neither does the gov, who's been shown to vigorously protect banks' & big companies' interests at every turn. So obviously it's ridiculous to conceive of a world currency country like US going w/ such a law.