IMF: Confiscate Savings Quickly – Before People Can Take Out Their Money

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Debt levels are the highest they have ever been in history. Rather than considering a plan on how governments can reduce the deficit by cutting spending, the IMF has proposed that countries institute a tax, for at least 10%, on people’s private wealth and savings, quietly and quickly – before they have a chance to get their money out of the banks. 

They call it a “wealth tax”, conjuring up images of millionaires and billionaires. Yet, they are talking about everyone. Everyone who has any money saved and in a bank is well – “wealthy”. 

In the publication Fiscal Monitor, Taxing Times, by the IMF (International Monetary Fund) p. 49, it states,
 

 

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 appeal may be seen by some as fair? By the few central bankers, no doubt. Not by the people whose money is being stolen! And Keynes doesn’t like the idea? This is the same Keynes that the Keynesian money printers, whom the Fed bases their so-called ‘rationality’ of printing trillions of dollars to ‘stimulate’ the economy –  actually changed his mind on this idea. 

That crackpot didn’t like the idea- yet the IMF does. These are the people who run the World Bank, whom are expected to save the world with their currency, the SDR, in the next currency collapse. These geniuses are supporting a ‘one-off levy’. 

It’s only a ‘one-off’ until it’s done a second time. This is a sanctioned theft. Yet, no one is called on the criminality of it. 

“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). “

Have you ever wondered why the Fed wants inflation? Who wants rising prices? That only destroys one’s purchasing powers. But that’s what the Fed says is good for this country. No, it’s good for them, as it helps them pay down the debt faster. But it makes you and me progressively poorer with each rising price. 

“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.”

In other words, because there was a delay in the introduction of the policy, it gave people time to get their money away (capital flight). That was a lesson learned, apparently. This time they won’t delay, and won’t make it known. They will just do it fast. 

“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.”

Read the entirety page 49 from the IMF paper here:

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). 1

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

 

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