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Author Topic: IMF floats idea of one time supertax on net wealth  (Read 2027 times)
ottodv
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October 11, 2013, 06:40:47 PM
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The latest IMF idea is a one time tax on net wealth:

Quote
The sharp deterioration of the public finances in
many countries has revived interest in a “capital levy”—
a one-off tax on private wealth—as an exceptional
measure to restore debt sustainability. 1
The appeal is that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be
repeated, does not distort behavior (and may be seen
by some as fair). There have been illustrious supporters,
including Pigou, Ricardo, Schumpeter, and—until he
changed his mind—Keynes. The conditions for success
are strong, but also need to be weighed against the risks
of the alternatives, which include repudiating public
debt or inflating it away (these, in turn, are a particular
form of wealth tax—on bondholders—that also falls on
nonresidents).

There is a surprisingly large amount of experience to
draw on, as such levies were widely adopted in Europe
after World War I and in Germany and Japan after
World War II. Reviewed in Eichengreen (1990), this
experience suggests that more notable than any loss of
credibility was a simple failure to achieve debt reduction,
largely because the delay in introduction gave
space for extensive avoidance and capital flight—in turn
spurring inflation.

The tax rates needed to bring down public debt to
precrisis levels, moreover, are sizable: reducing debt
ratios to end-2007 levels would require (for a sample of
15 euro area countries) a tax rate of about 10 percent
on households with positive net wealth.2

1. As for instance in Bach (2012).

2. IMF staff calculation using the Eurosystem’s Household
Finance and Consumption Survey (Household Finance and
Consumption Network, 2013); unweighted average.

From: http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf

You might want to hang on to those Bitcoins...
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Birdy
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October 11, 2013, 06:49:55 PM
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The appeal is that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be
repeated, does not distort behavior

I don't think this is possible, there will always be people who know about it before it happens and who are able to profit from this knowledge.
Also most people won't believe that such a thing will only happen once, politicans have broken too many promises before.


Also take debt down to 2007-level? That would probably just start the progress of building debt again.
If you go to such length, why not kill all debt and don't allow it to be built up ever again.
Carlton Banks
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October 11, 2013, 07:06:48 PM
 #3

Perhaps IMF big-cheeses should themselves step up and show us all how it's done, voluntarily. I wonder whether their "stateless" get-out clause will protect them, technically, from making a move like that.

IMF = Top Tier of Organised Crime (legitmised, easily the most pernicious form of organised crime)

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October 11, 2013, 07:37:47 PM
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Quote
The appeal is that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be
repeated, does not distort behavior

I don't think this is possible, there will always be people who know about it before it happens and who are able to profit from this knowledge.
Also most people won't believe that such a thing will only happen once, politicans have broken too many promises before.


Also take debt down to 2007-level? That would probably just start the progress of building debt again.
If you go to such length, why not kill all debt and don't allow it to be built up ever again.

There exist fundamental limit of where debt can be expanded to. And on other hand system can't be or won't be allowed to correct itself. That is massive defaults.

Full reset is only real option if we want to continue on what we are doing for considerable. The other is fundamental change in what fiat-currency is and how it's managed.

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RoadToHell
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October 11, 2013, 07:54:22 PM
 #5

There is no such thing as a "one-time tax."

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Kasper Gutman: Yes, sir, we were, but this is genuine coin of the realm. With a dollar of this, you can buy ten dollars of talk.
Ekaros
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October 11, 2013, 08:01:31 PM
 #6

I don't think they can tax enough...

The total debt is over the GDP...

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knight22
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October 11, 2013, 08:05:05 PM
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I don't think they can tax enough...

The total debt is over the GDP...

That's the whole point about of the national debt hoax. An ever growing tax system until... until we woke up and say NO or being completely enslaved.
It's up to us to decide.

Ekaros
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October 11, 2013, 08:20:22 PM
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I don't think they can tax enough...

The total debt is over the GDP...

That's the whole point about of the national debt hoax. An ever growing tax system until... until we woke up and say NO or being completely enslaved.
It's up to us to decide.


You mean global debt hoax?

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tvbcof
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October 11, 2013, 08:42:49 PM
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Quote
The appeal is that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be
repeated, does not distort behavior

I don't think this is possible, there will always be people who know about it before it happens and who are able to profit from this knowledge.
...

Contrarily, this is the only reason to believe that it can be done.

There would be, of course, a carefully chosen cut-off between who is allowed to exploit such a construct.  Sometime the 'wrong' people may end up on the uphill side of the threshold via dumb luck or particularly prescient situation.  Clawbacks could mitigate that issue, and in fact could be implemented in such a way as to provide an extra confidence boost in the important competent of marketing such a thing to the masses.


knight22
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October 11, 2013, 08:45:06 PM
 #10

I don't think they can tax enough...

The total debt is over the GDP...

That's the whole point about of the national debt hoax. An ever growing tax system until... until we woke up and say NO or being completely enslaved.
It's up to us to decide.


You mean global debt hoax?

I mean all national debt of occidental countries. The process is basically the same for each one of them and this is just a hidden ever growing tax system for feeding the banks.

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October 11, 2013, 11:14:52 PM
 #11

such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II
So for this tax USA must lose a World War and be governed by an occupation administration Smiley

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pand70
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October 11, 2013, 11:26:49 PM
 #12

I don't see this being very different from the bail in in cyprus...

galbros
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October 13, 2013, 12:43:05 AM
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Unless it is in a highly visible form, e.g. real estate, or in an account at an institution it is pretty hard to tax wealth.  Not impossible, nor as hard as it used to be, but tough.  Expect a run on $100 bills and 500 euro notes!
Spendulus
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October 15, 2013, 05:27:12 PM
 #14

The latest IMF idea is a one time tax on net wealth:



I'd like to float the idea of a one time transfer of bank wealth to bitcoins.
tvbcof
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October 15, 2013, 06:16:53 PM
 #15

The latest IMF idea is a one time tax on net wealth:



I'd like to float the idea of a one time transfer of bank wealth to bitcoins.

lol.  Nicely put.

It worked for me back in 2011, and it's looking like it may work almost as well for those who undertake the operation at the end of 2013 as I read the landscape.

Unfortunately it is a bit more 'one time' than I might wish due to the harassment that exchanges are undergoing in trying transferring portions of it back for the purposes of personal enjoyment.  It would/will be a happy time if/when Bitcoin becomes well enough known so that I don't need to play in fiat land in order to obtain things I like.
 
If Bitcoin continues on it's trajectory of recognition and the utility of fiat continues on it's trajectory of fail, I wonder if there will be a market space opened up for something like:

 - I pay BTC to someone who wants it and has fiat to buy me something I want in mainstream-land.

Maybe someone can put together a service which organizes such transactions.  It's a shame to need to go through such contortions here in 'the land of the free', but there it is.  Someone playing around with Bitcoin will get a real world view of how capital controls are currently much more than a theoretical future issue.


Spendulus
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October 15, 2013, 06:29:49 PM
 #16

The latest IMF idea is a one time tax on net wealth:



I'd like to float the idea of a one time transfer of bank wealth to bitcoins.

lol.  Nicely put.

It worked for me back in 2011, and it's looking like it may work almost as well for those who undertake the operation at the end of 2013 as I read the landscape.

Unfortunately it is a bit more 'one time' than I might wish due to the harassment that exchanges are undergoing in trying transferring portions of it back for the purposes of personal enjoyment.  It would/will be a happy time if/when Bitcoin becomes well enough known so that I don't need to play in fiat land in order to obtain things I like.
 
If Bitcoin continues on it's trajectory of recognition and the utility of fiat continues on it's trajectory of fail, I wonder if there will be a market space opened up for something like:

 - I pay BTC to someone who wants it and has fiat to buy me something I want in mainstream-land.

Maybe someone can put together a service which organizes such transactions.  It's a shame to need to go through such contortions here in 'the land of the free', but there it is.  Someone playing around with Bitcoin will get a real world view of how capital controls are currently much more than a theoretical future issue.


Capital controls are one of those things that you suddenly wake up and find you've got them.  Probably the idea has been to get them in place before the average guy on the street starts thinking about moving his money offshore.

But I have an idea that the dynamics of money have changed more than the control freak attitudes of our friendly government representatives have generated controllability.

The free flow of trade and currency has never in human history been more than temporarily impeded by government law, even when the penalties were beheading.  The only question is how much human suffering occurs before the natural readjustments occur.
Spendulus
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October 15, 2013, 06:35:41 PM
 #17

Unless it is in a highly visible form, e.g. real estate, or in an account at an institution it is pretty hard to tax wealth.  Not impossible, nor as hard as it used to be, but tough.  Expect a run on $100 bills and 500 euro notes!
Governments try to control this by issuing new currencies, say like the "New Dollar" and the "New Euro", then having a limited time for redemption of the old notes at some official exchange rate (another place they screw you).

And of course an Executive Order banning private ownership of gold and silver should be expected.

Not much panic has set in at this point.
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