Mar 192013
 

Wait a sec! You can’t eat gold either.

As many commentators have pointed out, this move to grab money from bank deposits in Cyprus is a violation of the sacrosanct deposit insurance guarantee we all think keeps us safe. The fact is that if you save money in a bank, the authorities know exactly how much and where it is and can take it anytime (and call it a “levy” or a “tax”). This is not a good trend.

The original terms of the bailout called for a one-time tax of 6.75 percent on deposits of less than €100,000, and a 9.9 percent tax on holdings of more than €100,000. The moves are designed to raise €5.8 billion of the total €10 billion bailout cost — a condition imposed by Cyprus’s E.U. partners.

Under a new plan put forward by Mr. Anastasiades early Tuesday, depositors with less than €20,000 in the bank would be exempt, but the taxes would remain in place for accounts above that amount.

via Cyprus Set to Reject Bailout, Citing Tax on Bank Deposits – NYTimes.com.

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