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NIRP Strikes: Spain To Create Tax On Bank Deposits
It was a little over a year ago, just as the Cyprus deposit confiscation aka "bail in" was taking place, when we asked, rhetorically, if "Spain is preparing for its own deposit levy" when an announcement by Spain's Finance Minister, Montoro, hinted at the imminent arrival of just that.
Specifically we said:
While Spain's economy minister Luis De Guindos proclaimed in the Senate today that bank deposits under EUR100,000 are "sacred"and that "Spanish savers should stay calm," Spain, it would appear, has changed constitutional rules to enable a so-called 'moderate' levy on deposits - as under previous Spanish law this was prohibited. For now, they claim the 'levy' will be "not much higher than 0%" and is mainly aimed at regions in Spain that have "made no effort to collect taxes" based on new revenue expectations.
As El Pais reports, the minister of finance and public administration, Cristobal Montoro, defends the need for such a 'levy' in their constitution on the basis of standardizing taxes across regions (and is preparing a proposal on the amounts to be paid) and although it would appear that while the European Commission could previously argue that such a 'tax' would violate the free movement of capital in Europe, it now leaves the door open to eventually effectively taxing the deposits.
Of course, back in March 2013 imposing such a tax would immediately bring up images of parallel bank runs in Cyprus and visions of confiscated deposits, culminating in an immediate collapse of the otherwise already insolvent Spanish banking system. In other words, the timing picked by Montoro to reveal what was coming couldn't have been worse.
Now, however, things are different.
Not only is Europe supposedly recovering, not only is the Cyprus bail in a distant memory (until it comes back front and center with a bang), but it was only a few weeks ago when the ECB - desperate to crush the same EURUSD which just two years ago seemed would implode under the weight of Europe's artificial political and monetary union - revealed NIRP, aka ZIRP on steroids: a negative deposit rate.
Or, as Spain may have called it, a tax on deposits. Because some 16 months after it was first hinted, its time has finally come, and as Bloomberg reported a few hours ago:
- SPAIN TO CREATE A TAX ON BANK DEPOSITS: MONTORO
The details are along the lines of what is already known:
- Advances to be boosted by almost EU3.9b, Budget Minister Cristobal Montoro tells reporters in Madrid.
- Tax on bank deposits to be created: Montoro
- Tax rate on deposits to be determined: Montoro
- Montoro and regions’ budget chiefs to meet in July
Or just as El Pais reported over a year ago:
The Minister of Finance and Public Administration, Cristobal Montoro, has advanced on Tuesday that the government will impose a type "moderate" to bank deposits to compensate communities that saw their tax autonomy canceled after the Executive created a state tax 0% rate. This tax on bank deposits, which has nothing to do with Cyprus, does not affect savers but requires credit institutions to pay for that capture deposits.
"The autonomous communities receive timely and therefore financially compensation shall implement a moderate rate in the state tax on bank deposits," said the minister, adding that this kind "will not be much higher than 0%" .
The Minister of Finance has clarified that such "moderate" will have no tax collection effort, "but that these regions serve to offset the revenue loss to see." So, he assured that the amount will correspond to the amount "exact has been undermined by the cancellation of regional taxes".
...
The Government announced in November 2012 the creation of a tax on bank deposits with type 0%, with implementation on 1 January 2013, to prevent the regions implement your own. A week earlier, the Constitutional Court had endorsed the tax on deposits of Extremadura, which launched in 2001 and turned in the day the government of José María Aznar.
Thus, this tax was in force before the imposition of the 0% and in the case of Andalusia, the Canary Islands in 2010 and established, who created it in June 2012. Only after it established Asturias. So this type Montoro 0% justified by the need to standardize the tax system and maintain the unity of the internal market, after the European Commission will send a letter to the Government on the grounds that these taxes in the regions could violate the free movement of capital. While leaving the door open to eventually effectively taxing the deposits.
In other words, the funding of the Spanish regions is now in the hands of those dumb enough to work hard and save their money. Because it is only "fair" that they - not the banks that year after year are bailed out by the ECB - end up with the short stick.
But please don't be surprised: after all as we said on June 5 when Draghi revealed that "NIRP Has Arrived" when we said that "Europe Officially Enters The "Monetary Twilight Zone." It is all downhill from here.
And yes: coming to an insolvent country near you... everywhere.
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S...P...A...I...N
Or is it P...A...I...N?
I seem to have forgot.
It'S PAIN.
There will be another awful consequence of any serious move to tax (incrementally confiscate) savings. Posters are correct that this will inevitably influence our behavior. We will withdraw funds and convert to other durable forms or just stash cash.
This means people will die.
Thieves at the other end of the spectrum from the Wall St./Congressional thieves will concoct new and violent home invasions and inflict methods of extortion that used to be common a century ago, when the average person did not have a bank account. The Fed could not be unaware of this chain of consequence. Blood will be on their hands.
And so it continues. Are the people really this stupid to not understand what is going on?
When inflation isn't enough just steal what you need directly.
Con mucho gusto pagaré te el martes por una hamburguesa hoy.
no papas fritas?
If you have money in any of the various forms, pay off a house.
A rat shack is better than nothing.
Alternatively, if you plan to flee from the homelands buy gold. Smelt it into luggage handles or car engine parts.
You Don’t Own Your Home and Never Will
I’m not talking about the bank holding the mortgage on your home. Even if you think you own your home free and clear, you really don’t own it at all. You lease it from the State and it sets the terms and conditions that allow you to occupy the house or sell it to another lessee. The State owns the house and land in perpetuity and you can not alter this arrangement.
http://www.informationclearinghouse.info/article37300.htm
You don’t own your house, or your car, or your labor. Everybody should have some Bitcoin because it’s one of the few things you can truly own.
Nor do you own your car, since most states and countries require a yearly “registration” or “use” tax. Again, if you don’t pay your taxes, your property can be taken from you.
We are left with no true ownership over anything
http://chralash.wordpress.com/2013/05/07/you-dont-own-your-house-or-your...
And you think bit coin is immune to state excess????
It nothing but a electronic tulip bulb or poker chip, he who controls the ether it resides, controls the chips.
‘Terrorists’ knocked out power in Yemen for two weeks. How did the Bitcoiners spend their Bitcoins there?
As for ownership, I see your point - Charlie Sheen has it right - blow your Bitcoins on hookers and coke now because you don’t take any of it with you in the end anyway.
I only "truly own" something if it is in my hand. You idiots who think that when this all comes crashing down there will still be internet and electronics are delusional.
Sticks and rocks
tick tock
My bank thinks I've developed a bad coke habit. And now they've raised my credit limit.
My friends, there are givers and takers in this world. I have always been a giver, maybe that is why I am broke today, but I always made it myself, no .gov.
But I'll be damned if these leeches take any more, it is time to stand up and get out of the system. Cash, gold, black market. Fuck .gov and let them know what reality is.
Israeki banks are trying to go cashless. Coming to everywhere else soon......as soon as the glitches are ironed out.
Oh they are working on 'fuck.gov' right now, nothing like institutionalized sheep F'ing.
so, if you're smart enough to have over a 100k, you're smart enough to get around this tax. it can't be that hard.
:)
Bitcoins anyone
No, thanks............... Just a fiat fool's journey..
Well the fine fine banksters in Georgia are already haircutting money from 12 month "dormant" accounts. Strangely, no one went apeshit when they redefined "dormant" down to a year. Most places are 3+ years. Of course, every state in which you leave your money can haircut that deposit without much difficulty, it just takes longer than the fast lane in GA.
See zio total program in Atlanta, Georgia
Atlanta is little Israel. Soon grasshopper the Shite/Sunni ....... African/Euro total confrontation will be evident to you. Divide et impera.
America was designed by the crown to mine the gold and then be re-wilded. Drink your fluoride, take your vaccines and eat GMO./
A: Filter your water and eat organic food. Take only traditional vaccines and skip all the Flu crap.
p.s. The reason I appear to be an obnoxious ass toward "Christians", is to shake & wake them out of their sheeple-state of consciousness - which pisses me off. If the other two monotheistic religions are kicking their ass, it is because they deserve it. And they 'deserve' it, because they allow it. And they allow it because their false secular and clerical leaders have betrayed them and sold them out for their own selfish benefits. Christians are their own worst enemy: They must learn the concept and practice of "Reciprocity" and "Quid Pro Quo" when it comes to dealing with non-Christians, and to "turn the other cheek" only to fellow-Christians. Or they're toast.
We have survived being eaten by the Lions in the Roman Coliseums. We have survived being turned into Human Torches to light the streets of the Roman Empire.
Many of us will die as a result of the folly of today. Some may live through it. But we are not toast.
Just because we are Christian does not mean that we are not flawed...Hell I am the most flawed of the Christians on this Comment Board.
Just because we are flawed does not mean that God does not exist. In fact our survival is a testamony to the miracle of Divine Providence.
I was watching the episode, recently, of ST DS-9 where the Commander Cisco stages a False Flag in order to draw the Romulans into the War. He justifies his actions. That is a good episode which exposes the statist and relative morality. (Remember when he cuts the deal with Quark to get that Cardassian Data Disk?)
Regards.
The reason you don't understand Christians is you don't understand the Bible. The reason you don't understand the Bible is that you don't know God. God has his own way of doing things that are not easily understood. If you had a garden with a few precious plants and many noxious weeds, you might spend a lot of effort battling the weeds and all their roots. Or you might wait until the few good plants could be moved and then torch the entire thing and start over...
17 And another angel came out of the temple which is in heaven, he also having a sharp sickle. 18 And another angel came out from the altar, which had power over fire; and cried with a loud cry to him that had the sharp sickle, saying, Thrust in thy sharp sickle, and gather the clusters of the vine of the earth; for her grapes are fully ripe. 19 And the angel thrust in his sickle into the earth, and gathered the vine of the earth, and cast it into the great winepress of the wrath of God. 20 And the winepress was trodden without the city, and blood came out of the winepress, even unto the horse bridles, by the space of a thousand and six hundred furlongs.
Revelation 14 King James Bible
7 For the mystery of iniquity doth already work: only he who now letteth will let, until he be taken out of the way. 8 And then shall that Wicked be revealed, whom the Lord shall consume with the spirit of his mouth, and shall destroy with the brightness of his coming: 9 Even him, whose coming is after the working of Satan with all power and signs and lying wonders, 10 And with all deceivableness of unrighteousness in them that perish; because they received not the love of the truth, that they might be saved. 11 And for this cause God shall send them strong delusion, that they should believe a lie: 12 That they all might be damned who believed not the truth, but had pleasure in unrighteousness.
2 Thessalonians 2 King James Bible
10 But the day of the Lord will come as a thief in the night; in the which the heavens shall pass away with a great noise, and the elements shall melt with fervent heat, the earth also and the works that are therein shall be burned up. 11 Seeing then that all these things shall be dissolved, what manner of persons ought ye to be in all holy conversation and godliness, 12 Looking for and hasting unto the coming of the day of God, wherein the heavens being on fire shall be dissolved, and the elements shall melt with fervent heat? 13 Nevertheless we, according to his promise, look for new heavens and a new earth, wherein dwelleth righteousness.
2 Peter 3 King James Bible
So you hardly make any profit from keeping money in the bank due to low interest rate and present inflation rate and on top of that they want to tax the deposits? Time for the Spanish people to make a big bankers' and politicians paella.
Methinks policy makers just put their life savings into gold and silver. Now they're trying to cause a banking crisis by taxing deposits, which would logically push people toward gold and silver.
Quick Catalonia. Call Crimea and ask how you ram through a referendum vote to leave Spain with your bank deposits intact?
All these smart people here on ZH and no one gets the big picture of what's going on.
Thieves. All of them.
"China’s Manhattan Project Marred by Ghost Buildings"
http://www.bloomberg.com/news/2014-06-26/china-s-manhattan-project-marre...
Catchy name.
so what comes first - bank runs or bank holidays
1st bank notices to the elites, then bank runs, then bank holidays
Dude where is my gold?
re-re-hypothecated
If it is not around your neck, you don't own it
Where is the link to Bloomberg confirming this? A google search restricted to the last few hours finds nothing from Bloomberg or other large news source.
Tengo un bonito dicho para Spain's Finance Minister:
"Me cago in la leche de tu puta madre."
First real negative interest rates, then nominal negative interest rates, the tax the remaining deposits. Sounds like a perfect recipe to me ("Plus Ultra" !!!) to create a BANK RUN. RUN FOREST RUN, RUN FOR THE BANK AND GOTS WHILE U CAN. Global shyte storm drawing near now...
Napolean was the best thing that ever happened to the oligarchs. Adolf Hitler was #2. The American slave revolutions were #3.
BTW, the tax is to be applied only to bank deposits (now with an interest between 1,5-3%), not current accounts. Also, the tax will go directly to the banks, not to the public; obviosuly, the banks will reduce the interest in deposits, but the competence for liquidity between banks is kinda strong.
Bitcoin users not affected.
They will not be affected......they will just be disconnected.
Governments will do what they want to whoever they choose.
The blockchain is distributed all over the world. Disconnect will prove to be only a short term inconvenience.
Btw, if the internet goes off the peasants should be on the streets fighting for their freedom...
double post, sorry
No, they have a whole bag of other problems not the least of which is the fundimental concept of electronic fiat existing out in the ether....
Why not tax he trillions printed by central banks?
Or tax trillions parked in central banks by rapacious banks?
They already do - it's called inflation and deflation.
ZH wrote one year ago: "Spain, it would appear, has changed constitutional rules to enable a so-called 'moderate' levy on deposits - as under previous Spanish law this was prohibited."
The very idea that the Spanish government can change (or ignore) the country's Constitution without substantial voter approval (~65%+) is beyond ridiculous. But such acts of political treachery have become normal across the whole of Europe and US. The EU constitution (aka Lisbon Treaty) never even had any citizen input when it was drafted(!!)
No one should be fooled by Spain having a Rajoy government which calls itself "conservative". He is an EU "true believer".
If "conservative" means on the political Right of centre, there are NO conservative governments anywhere in Europe. Every last one of them - including Britain's Tory Party nowadays under Cameron/Osborne - are all shades of the Left and committed to Left-wing policies including expanding the EU into a new EUSSR. Those who dare to believe in citizen/constitutional supremacy, small accountable government, personal freedom and responsibility etc etc are now seen as 'extremists' or even 'terrorists'.
Exactly the same process of citizen subordination is going on in the US irrespective of which political party is in office.
Cheer up Bunky,
You can still vote on your dog licensing fees.
It vill becomez mandatory, vether you have ze dog or not (!)
Anyone stupid enough to keep money in a bank deserves to get fucked. NO sympathy here
Yeah - put it all in the market!
Well my "free" Wells Fargo account started charging a $2 a month BS fee several months ago, followed by another $7 BS fee a few months after that. So closed the account and went with a small local bank that is still free (and gives instant credit for a deposit). Why would anyone take abuse from Wells Fargo?
I give the Spanish Folks credit (Ha, funny) for being a country of innovators.
First out front with the Spanish Inquisition to keep wandering minds hewing to Orthodoxy...
And now finding new methods of finanacial repression to keep the leaky boat afloat. Sure, it's a small effort, comparably speaking, to their larger brethren, but it's built in, and not a one off, so I expect it soon to be copied world-wide.
Unless I am not understanding something:
1. this bank deposit tax would not be a one time event but an ongoing monthly fee based on total depostits or total balances.
2. It is a response to certain 'Autonomous' regions ( think States or Counties if You are in the U.S. ) deciding to abolish income and/or sales taxes on thier Citizens although these 'autonomous' regions have NOT dissolved and continue to support local Government institutions and services in these same localities.
This has created a situation wherer the 'Autonomous' regions are not actually autonomous in the sense of funding Government internally although they are denying the pooling of local tax receipts with other regions; because they refuse to collect any from the local populace.
The Bureaucracy and the segments of the population demanding traditional government and social services within the 'Autonomous' region are only being funded by transfer payments from outside/other regions: the free ride.
It appears that the rest of Spain is addressing the insistence of a parasitic economic relationsip under the guise of local political autonomy.
Correct me if I am wrong in my assement of the information provided; but, it appears to me that these 'Autonomous' regions are trying to make other People pay for their local Government with transfer payments from other regions... that they want a 'federalized' system WITH taxation with collections outside theri region when it pays for what they want and an 'Autonomous' system with NO taxation inside their region at all when it comes to paying for what other people want.
I imagine what will happen is that the wealthy will move most if not all of their accounts off shore/out of the region and beyond the deposit levies -leaving the less than wealthy who have little or no choice but to deposit and cash checks and do business with local banks, have mortgages and business accounts, etc.; - paying all of the costs to maintain the local government... Making this whole charade little more than a very complex exorcise in tax avoidance by wealthy individuals...
Zero Hedge, I love, you...but as Yves Smith once put it, you do tend to 'hyperventilate".
I can find no mention on Bloomberg of Montoro saying anything about a deposit tax (though it may show up there at some point). AND, the El Pais article you cite from a year ago, using the translation you provide, says the putative tax "does not affect savers but requires credit institutions to pay for that capture deposits" - i.e. the tax is on the deposit-taking institutions, not on individual bank accounts. By your reasoning, then, when the U.S. collects taxes from, say, B. of A. or Citi, they're actually taxing those companies' depositors. That's a rather self-servingly distorted view.
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Interesting how we ZH'ers read all this conspiracy theory shit, and months, years later, it turns out to be true or accurately predicted?
We are sliding down a shit-slide, into a shit hole, to paraphrase the great philosopher, J. Lehey.
And we are in deed facing a double barrelled shit shotgun.
Buckle up.
Watch for the signs. They're all over the place.
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V-V