The wealth tax: The tiny island of Cyprus gets a haircut

Cyprus is bailing out its banks, by robbing the bank deposits. Photo: AP

WASHINGTON, March 17, 2013 ― Instead of stealing from their children like a civilized government, the tiny island of Cyprus, home to just over 1.1 million people, is bailing out its banks by withdrawing the money directly from their account holders.

The move was announced Saturday morning, with the obvious result of empty ATM machines across the country. Those found guilty of tax evasion by emptying their accounts may face up to 3 years in prison or a 50,000 Euro fine. The fine is the obvious choice, providing an ample pool of lifelong debt-slaves as needed. Electronic transfers were halted to prevent any big fish from getting away.

Monday will be a bank holiday (all the banks are closed) while the government pretends to debate the issue and find an alternate solution.

Tuesday morning, millions of depositors will lose between 6.7 and 9.9 percent of their money based upon the size of their accounts.

They are not, however, discriminating in any way; all accounts, regardless of the citizenship or residence of the account holder, are subject to the scalping.

Un-named European officials claim that the theft “will not set a precedent.” Un-named “intelligence communities” concur.

A wealth tax is nothing new of course, France has a version of it called the “solidarity tax on wealth” for many years. You can’t expect a progressive government to function solely on 50-plus percent income taxes, can you?

The United States Constitution prohibits any direct tax on asset holdings, but lucky for us, we happen to have a fine constitutional lawyer on hand who is a whiz at circumventing that particular obstructionist document.

I’ll save him the time and trouble. The sixteenth amendment provides a clause that allows a direct tax on assets provided the revenue is apportioned among the states based upon their population, and not used directly by the federal government.

That clears up why Obamacare passed medicaid expansion to the individual states. It would appear that President Obama was thinking ahead when he studied constitutional law.

There would of course be stiff opposition to any kind of move like this within the US, but under the proper financial crisis, anything you can imagine becomes a possibility.

A wealth tax would be sure to lose Obama some of his most steadfast supporters of raising income taxes, such as billionaire investor Warren Buffet. Investors like Buffett have the means and the knowledge to avoid most income taxes legally, allowing such magnanimous statements as “my secretary should not pay more taxes than I do.”

Warren Buffett limits himself to a annual salary of $100 thousand, well under the top tax bracket level. Of course the many millions of non-taxable bonus dollars are nice. 

Try getting him on board for a 30 percent tax on all assets. His net worth is nearly $50 billion.

A wealth tax is simply not regressive enough. To sustain a government over 14 million employees strong, tens, if not hundreds of millions of debt slaves are needed. A 30 percent “haircut” to wealthy Americans, while fitting in with Obamas narrative, really would not accomplish much. It would cover deficit spending for a year or two, but it would cripple business growth to an extent that even Obama cannot pretend not to see.

He needs to bleed millions of little fish without taking so big a bite that they turn around and bite back.

It just so happens that there is about $20 trillion sitting in individual retirement accounts, “owned” by millions of individuals, none powerful enough to do anything about it.

Now all we need is the right crisis. I’m sure they’ll think of something.


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Mike Shortridge

Mike is a former Marine who served in the Middle East. He is disgusted with both the Republican and Democratic parties, seeing them as two heads of the same beast. He writes from the conservative perspective, with a focus on making complex subjects easy to understand.

 

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