Wealth tax to pay for EU bail-outs

vivatifosi

Interesting story on the website and in tomorrow's early editions of the Telegraph.

Angela Merkel's senior advisors are pushing for a wealth tax on people in countries asking for a bail out. The article suggests that this could hit Brits with homes in such countries if adopted:

http://www.telegraph.co.uk/finance/financialcrisis/9993790/Wealth-tax-to-pay-for-EU-bail-outs.html

Extract:

Senior figures in Germany are now arguing that some richer home owners in countries like Spain, Portugal and Greece have so far avoided paying their fair share to rescue the euro, leaving Germany paying too much.
Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs for eurozone members. Until now, the cost of rescue packages for countries like Ireland, Greece and Portugal has fallen largely on people who invest money in either those countries’ bonds or – in the case of Cyprus – bank accounts.
Prof Peter Bofinger, an adviser to Mrs Merkel, said that levies on bank accounts are the wrong way of funding bail-outs, because rich people are able to shift their money out of the country.
“The resourceful rich just move their money to banks in northern Europe and avoid paying,” Prof Bofinger told Der Spiegel, a German magazine.
Instead of taxing cash, European Union governments should in future target property and other, less mobile assets, he said.

TruckerT

The money, and the appetite, for taxpayer bailouts seems to be running out of steam. I have no problem with the idea of letting banks go to the wall.

TruckerT

CLAPTON

TruckerT wrote: »

The money, and the appetite, for taxpayer bailouts seems to be running out of steam. I have no problem with the idea of letting banks go to the wall.

TruckerT

that because you don't understand what that means.

TruckerT

CLAPTON wrote: »

that because you don't understand what that means.

We have tried bailing them out, and they have taken the money and run!

The EU helicoptered in billions of Euros so that Cyprus could keep the cash machines loaded.

Anything is possible.

TruckerT

CLAPTON

TruckerT wrote: »

We have tried bailing them out, and they have taken the money and run!

The EU helicoptered in billions of Euros so that Cyprus could keep the cash machines loaded.

Anything is possible.

TruckerT

yes but do you understand what going bankrupt means?

TruckerT

CLAPTON wrote: »

yes but do you understand what going bankrupt means?

It means you go out of business, and are not allowed to start up again.

We have heard all the tales about how we cannot manage without the banks, but businesses cannot get finance, and housebuyers cannot get mortgages.

And the banks continue to make huge profits and pay huge bonuses.

Lots of Mrs Thatcher's ideas were greeted with similar shock-horror 'She can't do that' reactions, but she did it nevertheless.

TruckerT

CLAPTON

TruckerT wrote: »

It means you go out of business, and are not allowed to start up again.

We have heard all the tales about how we cannot manage without the banks, but businesses cannot get finance, and housebuyers cannot get mortgages.

And the banks continue to make huge profits and pay huge bonuses.

Lots of Mrs Thatcher's ideas were greeted with similar shock-horror 'She can't do that' reactions, but she did it nevertheless.

TruckerT

what I mean is the YOUR bank goes bankrupt today.

unfortunately you had a good weekend so you have no cash so you go to the ATM tomorrow:

cash refused.
your mortgage was due to be paid tomorrow: refused

unfortunately your employer (if you have one) also used that same bank so now has no money

tomorrow at work the entire work force is laid off as your employer has no money to pay his suppliers or wages or electricity, water, rent etc.


unfortunately the suppliers of your company now have no money so they lay off their workers


but you console yourself that some of the bankers have retired to their pads in France but have lost this years bonus.

result.

TruckerT

CLAPTON wrote: »

what I mean is the YOUR bank goes bankrupt today.

unfortunately you had a good weekend so you have no cash so you go to the ATM tomorrow:

cash refused.
your mortgage was due to be paid tomorrow: refused

unfortunately your employer (if you have one) also used that same bank so now has no money

tomorrow at work the entire work force is laid off as your employer has no money to pay his suppliers or wages or electricity, water, rent etc.


unfortunately the suppliers of your company now have no money so they lay off their workers


but you console yourself that some of the bankers have retired to their pads in France but have lost this years bonus.

result.

That is what I mean by a 'stranglehold'!

It is not dissimilar from the union stranglehold which Mrs Thatcher identified at the beginning of her reign.

TruckerT

CLAPTON

TruckerT wrote: »

That is what I mean by a 'stranglehold'!

It is not dissimilar from the union stranglehold which Mrs Thatcher identified at the beginning of her reign.

TruckerT

if you are saying that Thatcher wouldn't have allowed the banks to become as powerful as Blair/Brown then I agree

TruckerT

CLAPTON wrote: »

if you are saying that Thatcher wouldn't have allowed the banks to become as powerful as Blair/Brown then I agree

The banking collapse was caused by the casino management style of the banks. It was a worldwide phenomenon. It was not caused by any UK government.

But there must be some reason why the collapse occurred simultaneously in so many western countries.

The Conservatives, beginning with Mrs Thatcher, coalesced with world governments as the banking crisis developed. Mrs Thatcher may well have been the one to spot the approaching storm, but even she would have struggled to stop the final collapse.

But, as I posted on another thread, I think that she would have hated having to bail them out, and would have made them pay a heavy price.

TruckerT

Graham_Devon

vivatifosi wrote: »

Interesting story on the website and in tomorrow's early editions of the Telegraph.

Angela Merkel's senior advisors are pushing for a wealth tax on people in countries asking for a bail out. The article suggests that this could hit Brits with homes in such countries if adopted:

http://www.telegraph.co.uk/finance/financialcrisis/9993790/Wealth-tax-to-pay-for-EU-bail-outs.html

Extract:

Senior figures in Germany are now arguing that some richer home owners in countries like Spain, Portugal and Greece have so far avoided paying their fair share to rescue the euro, leaving Germany paying too much.
Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs for eurozone members. Until now, the cost of rescue packages for countries like Ireland, Greece and Portugal has fallen largely on people who invest money in either those countries’ bonds or – in the case of Cyprus – bank accounts.
Prof Peter Bofinger, an adviser to Mrs Merkel, said that levies on bank accounts are the wrong way of funding bail-outs, because rich people are able to shift their money out of the country.
“The resourceful rich just move their money to banks in northern Europe and avoid paying,” Prof Bofinger told Der Spiegel, a German magazine.
Instead of taxing cash, European Union governments should in future target property and other, less mobile assets, he said.

So seems those who sited Cyprus as a test bed were right.

I don't think this will go very far in all honesty. It will merely push things to the point where more and more find themselves affected by the Euro. That sounds a bit "end game" to me.

It's one thing stating "x amount of your tax money goes to Europe" but another entirely to have a new tax.

At the end of the day, if were going to have to start paying new taxes for this on top of existing taxpayer cash, you have to start asking "what are we actually getting out of this"?