The Cyprus President, in cahoots with the EU, proposed a one-time tax on money in savings and deposit accounts. The tax would range from 6% to 10% depending on the amount in the account. If the proposal was approved the government of Cyprus would take the funds from peoples’ bank accounts.
How fantastically efficient and simple? For some reason this has outraged many people who are correctly calling this action robbery. Strange that taking money from peoples’ bank accounts is theft but taking it from their paychecks is just fine.
Why have other governments not thought of this approach?
The very idea was proposed to the Federal Reserve whose response to the proposal exposed the institution’s socialist tendencies.
From page 31 in theNovember, 1941 Federal Reserve Bulletin, the FED states:
“….proposal is not in accord with one of the fundamental principles of taxation in a democracy, namely, that taxes should be imposed in accordance with ability to pay.”
Later on in their response:
“…a result that is not consistent with the principle that the well-to-do should contribute a large share of their income than those in less comfortable circumstances.”
Huh? A democracy dictates that taxes should be levied based on one’s ability to pay? I’ve never before heard such an association with democracy. Besides, if you have more money in the bank doesn’t it follow that you have a greater ability to pay and thus a deposit tax would meet the requirement that those with more should pay more? Also, how is it principled to ask people to pay more based on their income? No products or services sold in the very principled free market are priced this way. When selling a loaf of bread the baker does not first ask the customer “What is your income?” No free market business prices their products this way.
The last paragraph gets to the true reason the FED does not advocate the policy of stealing directly from depositors. It states:
“…some depositors could easily evade the tax by making payments in currency and by means of re-endorsed checks passing from person to person without being deposited.”
Ahhhh….yes. People would start operating outside the banking system which would do severe damage to the US banking cartel headed up by the FED. This is the true reason the FED is against the policy.