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Iceland Unleashes Confiscatory "Exit Tax" On Wealth Deposits

Tyler Durden's picture




 

While on the one hand, Iceland's decision to inch towards lifting its capital controls is a positive step, it appears what they give with one hand they are taking with another. Just as we predicted three years ago, the muddle-through has failed and there are only hard choices left and sure enough BCG's envisioned 'wealth tax' appears to be rearing its ugly head once more. As Morgunbladid reports, Iceland plans to impose an exit tax as part of removing capital controls, anticipating all bank assets will be subject to the levy, regardless of whether assets are held in local (ISK) or foreign exchange.

 

As Bloomberg reports,

Iceland’s plan to impose an exit tax as part of removing capital controls anticipates all bank assets will be subject to levy, regardless of whether assets are held in ISK or FX, Morgunbladid reports without saying how it obtained the information.

 

Part of program may also include forcing foreign holders of ISK assets to swap ISK at discount to a 30-yr FX bond; bond to carry interest rate less than 3%: Morgunbladid

 

NOTE: Iceland task force on capital controls’ removal met yesterday with representatives of Kaupthing Bank hf, Glitnir Bank hf and LBI hf. The country may proceed with lifting controls early next year, according to task force member Lee C. Buchheit

As we concluded previously,

...between household, corporate and government debt, the developed world has $20 trillion in debt over and above the  sustainable threshold by the definition of "stable" debt to GDP of 180%.

 

The facts according to which all attempts to eliminate the excess debt have failed, and for now even the Fed's relentless pursuit of inflating our way out this insurmountable debt load have been for nothing.

 

The facts which state that the only way to resolve the massive debt load is through a global coordinated debt restructuring (which would, among other things, push all global banks into bankruptcy) which, when all is said and done, will have to be funded by the world's financial asset holders: the middle-and upper-class, which, if BCS is right, have a ~30% one-time tax on all their assets to look forward to as the great mean reversion finally arrives and the world is set back on a viable path.

*  *  *

Slowly but surely it is being enacted...

 

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Wed, 12/10/2014 - 22:52 | 5539147 DoChenRollingBearing
DoChenRollingBearing's picture

Iceland has miners of Bitcoin.  Hmm...  

There are at least four companies in the USA who sell gold for BTC.

Wed, 12/10/2014 - 22:59 | 5539176 Thomas
Thomas's picture

Physical metals, dudes. 

Wed, 12/10/2014 - 23:24 | 5539252 El Oregonian
El Oregonian's picture

Their accounts have just been "Iced" indefinitely...

Wed, 12/10/2014 - 23:37 | 5539285 Ahoy Polloi
Ahoy Polloi's picture

Quick ~ Somebody get Simon Black on the blower.

Thu, 12/11/2014 - 00:10 | 5539350 CrazyCooter
CrazyCooter's picture

Folks need to realize that if you are working class, you are a tax donkey. Get it? So, this whole "OMG capital controls" shit doesn't impress me. The US doesn't have capital controls? Try flying anywhere in the world with more than 10k in your pocket. BUZZER. You gotta wire that money so they can follow it. They want to follow it so they can tax it.

FFS, if you move to another country, they will tax your ass once you make over a certain limit. So, to say that simple, if I move to China, get a job at some factory, and make more than the IRS limit, I get to pay income taxes/etc on that income.

If they engineer the inflation they want, we all become "millionaires" and suddenly a few million bucks is what you earn in a year and welcome to the top tax bracket - tax donkey. And assuming supreme US power, you can't run from it.

With all that said, New Zealand and Iceland are top on my list if I ever say fuck it and pack my bags and go for the exit.

Regards,

Cooter

Thu, 12/11/2014 - 00:23 | 5539377 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Spend at least eight weeks in any candidate country first, CC!  

That seems to be about the reasonable minimu to see if you would like it, learn the language, like the food (women, etc.), get all set up (lawyers, etc.).

Thu, 12/11/2014 - 01:44 | 5539490 CrazyCooter
CrazyCooter's picture

That is good advice for someone with capital/cash to fuss about.

I am looking at a longer term horizon where I can simply have a good job until old age claims my bones. Both countries I cite have very significant renewable energy infrastructure and that makes them fundamentally desirable.

All I really need in life is a warm cot, a flushing pot, and three hots. Everything else is a grace. When I was a young man, an old man told me that "pussy is the most overrated thing in the world and a good shit the most underrated."

I am slowly coming around to the man's world view.

That said, I got a good gal and am very happy to have her and hope we ride into the sunset together.

But life ain't fucking fair.

Regards,

Cooter

Thu, 12/11/2014 - 08:26 | 5539749 Coke and Hookers
Coke and Hookers's picture

When the old Icelandic banks went bust in the crash in 2008 they were sort of put in stasis and have been overseen by "resolution committees". Their assets were moved to new banks that are operating now. All their assets belong to the old banks. The debts of the old banks were virtually all picked up by hedge funds for 4 cents on the dollar. These funds (which are rumored to be associated with Goldman Sachs) now own the new banks and all their assets, which means that they own a large part of the Icelandic economy, including private debt and a bunch of companies. The hedge funds want to move their "money" out of the country but for that they need foreign currency. If that were allowed the Icelandic Krona would crash along with the economy. So the capital controls are designed to lock in these assets to protect the country. The exit tax on hedge fund money moved from the country is a method to control the exit and at the same time to screw the funds.

There has been a behind the scenes war in Iceland for years between the funds and elements of the political class. The funds have "exerted influence", probably including bribes to improve their situation and have even attempted to influence politicians to buy infrastructure such as public roads and energy companies. The funds have leveraged political elements wanting to join the EU as well, which see the bankruptcy of the country as a good way to change the view of Icelanders who don't want to join the EU at this point. However, it seems the elements opposing the funds have landed on top and for the last 2 years or so the Icelandic government has taken a hard line against he hedge funds and has refused to even meet them. The next few months are going to be interesting over there.

Thu, 12/11/2014 - 04:13 | 5539564 Harbanger
Harbanger's picture

There is no place to run to, ...

Thu, 12/11/2014 - 05:50 | 5539635 HowdyDoody
HowdyDoody's picture

New Zealand used to be on my list of exit nodes too. However, like Sweden, it is no longer the country it used to be. The leaders are neoliberal clones as are all western leaders. They have gone full US total surveillance and their politics system has also gone full US ('do anything to stay in power').

Thu, 12/11/2014 - 15:39 | 5541212 layman_please
layman_please's picture

my fucking list has only Marie Byrd Land left. i'm stalling with the moving though. with international sea that's all that is left of Common heritage of mankind and of Terra nullius

Thu, 12/11/2014 - 11:33 | 5540297 Duke of Earl
Duke of Earl's picture

No real point in increasing taxes (or inflating to capture more in a higher bracket) when money is created at will.  Taxes are a diversion.  Totally unnecesary now with the new money printing scheme.

Thu, 12/11/2014 - 07:46 | 5539705 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

I love Gold, but try to flee with 10 kg of gold in the airport without the gubernment attention.

Thu, 12/11/2014 - 08:21 | 5539743 Hobbleknee
Hobbleknee's picture

Boat travel is the preferred method.

Wed, 12/10/2014 - 23:03 | 5539183 Buster Cherry
Buster Cherry's picture

I read an outfit uses the abundant ice to provide cooling for the data centers

Thu, 12/11/2014 - 00:25 | 5539379 DoChenRollingBearing
DoChenRollingBearing's picture

Probably the same article I read, very interesting.  In the NY Times, about Dec 2012, IIRC.  They also use Iceland's abundant geothermal energy to generate electricity (a major cost factor in BTC mining).

Wed, 12/10/2014 - 23:08 | 5539202 junction
junction's picture

Nazi Germany was big on capital controls for Jewish people leaving the country.  Soon everyone trying to take their money out of the Western country they live in now will be treated like the German Jews in the 1930s.  If it was good enough for Hitler, it is good enough for you.

Wed, 12/10/2014 - 23:49 | 5539309 runswithscissors
runswithscissors's picture

we hitlered some folks

Thu, 12/11/2014 - 03:37 | 5539574 Harbanger
Harbanger's picture

And they all agreed it was good.  For their own safety and well being.

Thu, 12/11/2014 - 05:50 | 5539637 HowdyDoody
HowdyDoody's picture

The probably used IBM systems to keep track of it all too.

Thu, 12/11/2014 - 00:57 | 5539426 Haole
Haole's picture

Forget the U.S.

There are numerous ways to buy gold with BTC if one wishes in places like Singapore.

No Icelandic capital controls but they tax you until your eyes bleed if you try and expatriate any of it.  Hilarious.

Sounds like a job for Bitcoin, BTChez. 

 

 

Thu, 12/11/2014 - 05:29 | 5539625 shouldvekilledthem
shouldvekilledthem's picture

Why would anyone need gold when they have btc?

You cannot move, store, spend gold efficiently.

 

Besides hedging for the worst gold is completely useless.

Exchanging it involves a lot more hassle compared to exchanging btc.

Thu, 12/11/2014 - 07:28 | 5539688 Harrison
Harrison's picture

Bitcoin, ice beeyotches!

Wed, 12/10/2014 - 22:55 | 5539160 nmewn
nmewn's picture

You can check out anytime you want but your money can never leave.

Wed, 12/10/2014 - 22:55 | 5539161 Greenskeeper_Carl
Greenskeeper_Carl's picture

what part of no debt= no money don't they understand. All our currency is created with interest, and is therefore debt based. WHich means if you extinguish all the debt, you would extinguish all the money, since it is all someone elses counterparty risk. Debt must there fore continuosly expand until it eventually collapses on ourselves. And even if this could be stabilized, anyone who things this "one off wealth tax" will be anything like 'one time' is deluding himself. Just like you are deluding yourself if you think its only going to be 30%. You arent escaping this with 70% of your cash, no way.

Wed, 12/10/2014 - 23:18 | 5539240 noben
noben's picture

He who cashes in first, cashes in best.

I favor having Nominal amounts in the Direct Deposit checking account, that's free of Fees because of the Direct Deposit. The combo of using the Debit card and cash works just fine for almost anything.

Banks want you to use Credit Cards because it caters to their biz model: Fees, Interest, and the FRB game.

Thu, 12/11/2014 - 01:20 | 5539465 stacking12321
stacking12321's picture

i don't need to escape with cash...i'm dumping cash like it's going out of style.

oh, wait...it is!

 

Wed, 12/10/2014 - 23:10 | 5539211 MATA HAIRY
MATA HAIRY's picture

iceland is the best nation on earth.

 

 

Wed, 12/10/2014 - 23:22 | 5539244 CunnyFunt
CunnyFunt's picture

... for picking up drunken sluts.

Wed, 12/10/2014 - 23:29 | 5539268 Prober
Prober's picture

Iceland is 2nd best, ShangriLa is 1st best.

Wed, 12/10/2014 - 23:50 | 5539315 Freddie
Freddie's picture

ShangriLa - The Kinks

Oddly the song is directly related to this topic.  The aspiration to get a little ahead until you realize you are imprisoned by the elites.  Written about just before the pound was destroyed and lost global currency reserve status.

https://www.youtube.com/watch?v=mPNWGv1aE0I

The song describes a man named Arthur, the title character from the album. Arthur lives in a house which is called, somewhat sarcastically, a Shangri-La. In the beginning of the song, the Shangri-La appears to be a true paradise but, as the song continues, it becomes clear that Arthur's house is as much of a prison as it is a haven. In a compassionate, ironic mood the verses depict British middle-class aspirations and material progress in the years after World War II.

Thu, 12/11/2014 - 00:11 | 5539351 MATA HAIRY
MATA HAIRY's picture

but seriously, who doesn't know that iceland is the best nation on earth. Really, in many ways it is.

 

Also norway is really great. And Finland. Austria, too. Denmark, too.

 

What do all these nations (and the other great nations on earth) have in common?

 

Small, mostly white and homogeneous, with a strong culture.

 

Why am I the only person on earth to notice this?

Thu, 12/11/2014 - 00:40 | 5539402 kamikun
kamikun's picture

Pretty much the way I feel about Japan. Despite the economic hell it has created for itself, the Japanese will survive. And I plan to be there with them as much as my 6'4" 240lbs. gaijin-ness will allow. I have completely given up on the US... been here for almost 20 years; no plan to ever go back to the craziness of a multi-cultural dystopia.

Thu, 12/11/2014 - 01:13 | 5539460 Seize Mars
Seize Mars's picture

kamikun

Yeah, because as widespread hunger takes hold, and knowledge of banking spreads, they're going to look at you like their trusted friend and look out for you. Just kidding. They're going to fucking tear you to shreds.

Thu, 12/11/2014 - 02:23 | 5539526 kamikun
kamikun's picture

Real friends, real assets, and real skills. It works in every culture. Thanks for your concern, but I think I'm gonna be ok. 

Thu, 12/11/2014 - 01:41 | 5539486 Buster Cherry
Buster Cherry's picture

How accepting are the japs of you as an ex-pat? I'll bet you run into some that hate your guts.

Id much rather be in scandanavia.

Thu, 12/11/2014 - 02:28 | 5539529 kamikun
kamikun's picture

I'll never really be part of the society... I have no illusions about that- but I kind of like having a foot in two cultures and not really a home in either. And, sure, there are bottom-feeders in every pond. But the amount of racial antagonism I run into (or more accurately, that I notice and which affects me) is a fraction to that I meet on the streets of the US.

Thu, 12/11/2014 - 02:32 | 5539532 gwar5
gwar5's picture

There's nothing there in those countries. You would also like Salt Lake City, Utah. Also all white, about the same size as those countries, strong culture, and  gas at the pump does not cost $9 USD.

 

Thu, 12/11/2014 - 05:50 | 5539636 nufio
nufio's picture

What do all these nations have in common?

they all have cold winters?

Thu, 12/11/2014 - 08:33 | 5539769 Hobbleknee
Hobbleknee's picture

For real. The lack of sunlight is enough to drive you insane.

Thu, 12/11/2014 - 07:39 | 5539698 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

Well you forgotten the s/ at the end.

Thu, 12/11/2014 - 00:45 | 5539408 Northern Lights
Northern Lights's picture

"Iceland is the best nation on earth"

 

To a woman maybe.  Can't see why any dude would willingly want to be exposed to the feminist policies of Iceland.

A country that is most favourable to women, is certainly more unfavourable to men. The politics in places such as Iceland, Sweden, Finland cannot be viewed as a zero-sum game.  If you're going to give more power to women, you will by it's inverse, be taking power away from men.

 

Thu, 12/11/2014 - 05:54 | 5539640 HowdyDoody
HowdyDoody's picture

Have they gone the 'It is rape if we (the women) say it is - even 10 years retrospectively' route?

Thu, 12/11/2014 - 06:45 | 5539666 nobita
nobita's picture

Not sure you are right about that. Men and women should be equal with regards to pay for example. I live in Sweden and I don´t see a problem with empowered women at all. Our immigration policies on the other hand...

Thu, 12/11/2014 - 06:49 | 5539669 Ghordius
Ghordius's picture

have a look at Sweden's laws regarding prostitution. in my humble opinion, borderline... lunatic

Thu, 12/11/2014 - 08:38 | 5539773 Hobbleknee
Hobbleknee's picture

Wait until you get divorced in Sweden, and then you'll find out just how unequal it is (if you have kids).

Thu, 12/11/2014 - 07:37 | 5539697 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

Scandinavian cuntries are hellish leftist feminist countries, I wouldn't want to live here even if they paid me...

Some mangina cunt downvoted you because you are saying the truth, bro.

Wed, 12/10/2014 - 23:10 | 5539216 Spungo
Spungo's picture

I'm sure these policies will not scare away rich foreign investors.

Wed, 12/10/2014 - 23:20 | 5539243 Bunga Bunga
Bunga Bunga's picture

Icelanders are not so stupid to sell themselves to fuckin' foreign investors.

Thu, 12/11/2014 - 04:44 | 5539587 Harbanger
Harbanger's picture

Yeah sure.

Wed, 12/10/2014 - 23:16 | 5539235 q99x2
q99x2's picture

Morgunbladid. Sounds like something I'd say.

Wed, 12/10/2014 - 23:26 | 5539259 Harriet Wanger
Harriet Wanger's picture

Hmmmm... Iceland is the only country that's gotten things right so far, i.e., Icelandic Citizens > Foreign Robber Barons. Not sure what the import of this story is, since it's doubtful that anyone's been heavily invested in Iceland for quite some time.

Thu, 12/11/2014 - 00:05 | 5539341 dirtyfiles
dirtyfiles's picture

yes it means don't take your money from US and invest abroad

if you do that see what happens?

Wed, 12/10/2014 - 23:43 | 5539296 Catullus
Catullus's picture

What a great way to start a bank run

Wed, 12/10/2014 - 23:56 | 5539326 Surging Chaos
Surging Chaos's picture

So... Icelanders are getting Cyprused?

Thu, 12/11/2014 - 00:39 | 5539399 ApparentlyAPseudonym
ApparentlyAPseudonym's picture

Good.

Thu, 12/11/2014 - 01:11 | 5539453 tarabel
tarabel's picture

 

 

We've gotten pretty far off the trail of human liberty when we allow any government to dictate what we can or cannot do with our own money. And it will only get worse until we are all either supine and broken slaves or else we redeem our stolen rights from those who now claim that they are merely privileges and indulgences granted to us by our masters. 

Thu, 12/11/2014 - 05:33 | 5539627 The Most Intere...
The Most Interesting Frog in the World's picture

But its not your money when the government is in hock up to their eyeballs which youger and future generations will be stuck paying.  I welcome wealth and exit taxes and would add an age component as well so older wealthier citizens are finally held accountable for the governments they installed.  Bring it on.

Thu, 12/11/2014 - 08:31 | 5539761 Prober
Prober's picture

HOW is that change going to become reality ????

Thu, 12/11/2014 - 08:42 | 5539776 Hobbleknee
Hobbleknee's picture

4 .gov trolls downvoted you.

Thu, 12/11/2014 - 01:09 | 5539454 esum
esum's picture

revenge of the PACKAGE MORTGAGE deals..... horse shit sold as GOLD

Thu, 12/11/2014 - 01:11 | 5539455 Seize Mars
Seize Mars's picture

LOL. You idiots thought that Iceland had really "stuck it to the bankers." What a laugh.

They have fiat money, which means Rothschild is still in charge. Expect capital controls, high(er) taxes, inflation and finally "the big reset."

Just like everybody else.

Thu, 12/11/2014 - 16:18 | 5541325 layman_please
layman_please's picture

that little piece of rock would be obliterated if they would try implementing anything even remotely celebrating human liberties, including financial. there are no freedoms under any government. it's an oxymoron.

entire fucking human history/civilization is evolution of tyranny, heading towards singularity of the one world government. even if there's no grand plan, that's what we'll end up at least according to the current trends. only reason we have seen temporary developments like democracy, human rights and other shit, is only to make us believe governments are for our benefit and that we would start to love our fucking serfitude. our children will embrace the one world king because governments are inherently GOOD. ICELAND, ICELAND, ICELAND! whatever, RANT OFF.

Thu, 12/11/2014 - 01:19 | 5539466 starman
starman's picture

I prefer "black Mondays" in Fergusson! Shits free.

 

Thu, 12/11/2014 - 01:33 | 5539478 the0ther
the0ther's picture

wealth taxes are frigging awesome! fuck the filthy rich. eat the 0.01%. pitchforks and torches, a gun for every citizen. 

Thu, 12/11/2014 - 15:08 | 5541059 StandardDeviant
StandardDeviant's picture

Right: looting, armed robbery, rape, rioting mobs, and even cannibalism are "awesome".  You're a real prize, aren't you?  FFS.

Thu, 12/11/2014 - 04:17 | 5539594 smacker
smacker's picture

"Iceland Unleashes Confiscatory "Exit Tax" On Wealth Deposits"

Coming to a bank near you sometime soon methinks.

 

It's even worse, as Tyler's earlier quote says:

"...when all is said and done, will have to be funded by the world's financial asset holders: the middle-and upper-class, which, if BCS is right, have a ~30% one-time tax on all their assets to look forward to as the great mean reversion finally arrives and the world is set back on a viable path."

Did I hear you say 30%??

Thu, 12/11/2014 - 06:22 | 5539660 Urban Redneck
Urban Redneck's picture

What up with the Orwellian propaganda double speak?

Iceland task force on capital controls’ removal met yesterday... Iceland’s plan to impose an exit tax AS PART OF removing capital controls anticipates all bank assets will be subject to levy

Joseph Goebbels would be proud. Perhaps there were more Nazis who relocated to Iceland after WW2 than reported.

Thu, 12/11/2014 - 16:30 | 5541437 layman_please
layman_please's picture

nah, quite sloppy still. one can't use tax in a sentence. even gruber knew that, though he shoot his mouth off.

till this day, nothing can beat one-time levy!

Thu, 12/11/2014 - 07:29 | 5539690 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

Well socialist have struck again, leaving capital control but imposing an exit tax, well it's same thing as capital control...

Meanwhile, Bullish for Bitcoin, a currency that you can pass the border with 100 million dollar in a encrypted wallet like it was nothing, the big thing is that the gubernment can do nothing to stop it.

 

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