Taxing Savings Accounts Is All the Rage: Why Cyprus Should Matter



The United States has been only a few steps behind the Marxists in Europe on a number of issues, especially when it comes to levying a bank transactional tax. We have been told it is meant to tax the evil rich, but that is hardly the case.

Look at what is happening in Cyprus as a good example of where we appear to be heading and how a financial tax can be easily abused and used against the common man.

Cyprus has just delayed a vote on whether or not to allow a tax on all bank deposits – including all savings accounts.

A financial tax is something that our leaders have discussed and asked for, including such notables as, Richard Trumka, Eliot Spitzer, VanJones, Joe Biden, Ralph Nader, the NY Times, USA Today, Warren Buffet, Center for American Progress, Mark Cuban, Bill Gates, Paul Krugman, George Soros, Francoise Hollande and almost all Socialists in Europe, Nancy Pelosi, and so many others.

These are people who have theirs and now want yours. They believe in taxing according to ability to pay, i.e., if you have any discretional funds, they are fair game. The more your earn, the more they take. It is also known as theft. It discourages savings, which is not good for the economy or our way of life.

Of course it doesn’t apply to them as we see when Bill Gates avoids paying taxes through various loopholes or when Warren Buffet sues the government to get out of paying his. They are the super wealthy, the elite, and they are exempt.

Cyprus is now faced with having to accept a financial transaction tax, specifically taxing savings accounts that were placed in banks in good faith.

Imagine going to take money out of your savings, money that has already been taxed, to find that you have 6.75% less than you did. Instead of accruing interest, you are losing money to bail out creditors. You have done the right thing and must now pay for those who did not.

If Cyprus doesn’t levy the tax, i.e. steal money from savings accounts, they could be pushed into bankruptcy. There could be a run on banks in either case. Greece is in a different position than we are in that they have taken billions in bailout money from the EU.

However, if we keep spending, the Democrats in power will have us in the same position. We will be faced with an economic Sophie’s Choice at some point. There will be no end to what they will tax.

For now, the tax in Cyprus is a one-time 6.75% tax on all deposits. This will be the first time that the IMF and EU have gone into peoples’ savings to finance a bailout of Greece.

Foreign nationals also have deposits in Cypriot banks and stand to lose, among them Russia. Some accuse the Cypriot banks of laundering dirty cash from Russia. That is being used to make the tax more palatable. It’s a straw man regardless of whether or not it’s true.

Who will deposit money in a Cypriot bank after this?

Getting back to the United States, we must understand that if we allow this Marxist idea of taxing bank transactions, as a social justice equalizer, to enter into our economic principles, there will be no end to what they can do with it to abuse our economic freedom.

President Obama wants us to be like the Democratic Socialists of Europe and it isn’t all he thinks it is cracked up to be. They pretend they want to tax the rich, but they really want to tax anyone who has more than they need for the basics.

Does it sound like fiction? It isn’t. I don’t believe this will happen in the United States at this time. It could, however, happen in the EU and eventually reach us.  In fact, what do you think the government is doing now with spending and taxing and robbing future generations?

The supporters of the financial transaction tax: CEPR Documents

Full story of Cyprus savings account tax: [AP]