Topic: Spain confiscates 0.03% of all bank deposits. (Read 5483 times)

That's likely true, but at least you would get something back.

Another interesting point to consider is that major crises are usually accompanied by deflation (at least part of which is a result of debt destruction).  So the inflation caused by printing dollars to cover bank deposits might be at least partially offset.  And the good thing about the inflationary part is that the dollars would be going more toward the working/middle class instead of the rich, which would keep the economy going better than giving banks bazillions of dollars.

The risk premium would increase greatly in a major crisis.  Look at the US downgrade in 2011.  The risk premium would expand in a really bad situation, and the result would be that the government would have to print money to cover the insurance.  So, yes, you'd get your money back, but it would be money that is worth less than what you had in the bank.

The point is that FDIC is nothing, you have to rely on the implicit government guarantee.

The FDIC is also backed by the US government, which can borrow basically unlimited amounts at a zero risk premium. With the backing of the FDIC deposit holders in the US do not need to worry about loosing access to the money in their bank accounts up to deposit limits.

The FDIC has 50 billion of equity, probably in the form of bank deposits. It's basically just babble that you like to hear.

Our government doesn't even have any money, so no, there is no bank insurance here lol.

I doubt that would make any difference.  As you pointed out, FDIC insurance pays out when banks fail.  I doubt it covers government theft.   Besides, even if FDIC insurance would somehow cover it right now, I'm sure they'd find a loophole or change the laws so it won't.

Not that I want the government to do that, but I'd greatly prefer that to messing with bank deposits.

So you're telling me spain didn't have any of their banks insured? (Not being sarcastic, genuine question)

In the US they'd just print 0.03% more dollars. Lot less likely to cause public uproar.

I don't think this could happen in the US. The FDIC insures all bank deposits up to $250,000 per depositor per institution. The bank would have to fail first and after that it could only apply to deposits above the above limits.

Banks already pay the FDIC an insurance premium based on how much money is on deposit at their bank. 

Well, if countries continue to do this, it will force people to use alternative ways to move or save money.. bitcoin is the obvious choice.

I feel like we wouldn't let this happen as easily, there would be a public outrage. But then again, we let NSA happen. So maybe not.

If you earned 0.025% APY in interest on your bank account but they took 0.03% from your account then they really only took 0.005% from what you had in your account at the beginning of the year. The amounts would likely be unnoticed to most people if they did not see it on their statement.

Just think where income tax rates began.  E.g in the US, what was the rate and what was the income that got that rate?  What income got the highest rate? 

It was the camel's nose under the tent.  Same thing here, bringing the water to a boil while the frogs are in it.

You forgot to say that when their expenses decrease, they don't pass it on, just so that they can grab more profit, lol.

Yeah, that's aggravating.  Of course they'll pass it on.  Banks and corporations always do.  Anytime their expenses increase, they pass it on.

Haha. In a normal account, our bank interest is 0.025%, even less than the tax. The next move that I am expecting is for all interest to be cancelled, and charging us more commision.
Bitcoin solves all these problems, no more unreasonable tax. If your coins get stolen, its your own fault for not storing them properly, and you need to know who to trust and who not to trust.

Sure, I definitely understand that sentiment.  But whether they take the money from bank deposits or sales receipts or income, it's basically a tax increase.  If they're going to do it anyway, they at least shouldn't screw with the banking system.

Bitcoin solves nothing without a change in politics. Also, we have the big problem of automation, more and more and more jobs get automated, so more and more and more ridiculous ways to counterfeit this are created. Not everyone can be a technician, and there will always be people coming from even poorer countries willing to work for peanuts, so the only solution for these that aren't lucky enough to be born with the genetics that it takes to become something like an engineer or are born in a well off family, is to deal with it and work for shitty pay that will gradually get shittier. Even if you were to ask for some help no one is going to help you with shit. Bitcoin rich people are the same as fiat people after all. I've been here for a year and i've never had a full BTC yet. Most people are struggling, how can BTC help if they can't pay the bills. The problem with this is the people. We need better politics and a change of mentality, not fucking minijobs. I support Bitcoin because it's a very interesting piece of tech but Bitcoin alone does nothing if the people remain the same. I can barely pay the bills, if I tell people they'll just tell me "work harder", or "move" (implying I can even pick up the local train let alone move to other countries) and all that shit that doesn't apply in the real world when you are on a dead end situation.

Hi, I live there( i live in a dorm and i know a lot of other people interested in Bitcoin, even tho they are all new thus they barely have any, like me). I even did a presentation, talked about Bitcoin, the community etc.
This is in principle done to help certain local councils with the debts. It's all a joke, our beloved goverment has stimated in 0.03% the tax on the bank deposits. Pretends to get 375 million out of it..

They even laugh at us saying that the banks will pay it, as if they wouldn't put the weight on us in form of commisions or lower interests for our savings.

Also be sure that this 0.03% will do nothing but keep growing.

We have enough taxes, thank you very much. A huge capital gains tax, and then for gains again (same but they call it something else to get more), and then for the "retirement fund" (which the working ones will never get, since they are used to paid the eldery since the gov lost most of it), a 10% Tax on normal sales, even higher tax on special sales, etc, etc. The list goes on and on.

Ok, so that really is awful.  I could maybe see putting a "tax" on deposits with the idiotic idea of trying to get people to spend their money rather than put it in the bank, but taking money that's already there is just wrong.  Does anyone know what their rationale is for doing this over raising taxes?  No one likes higher taxes, but raising taxes of one form or another at least doesn't risk destabilizing the banking system like this does.

In Cyprus it was more like 20%.

That is correct. As we say to non-locals here, Welcome To Spain, Spain is different.

I don't think tax code work this way in any part of the world. Should consult your accountant and lawyer.

There are many tax problems here in Spain. For example, when you inherit something, you are taxed. A lot of family members lose money because they get taxed for more than what they inherit.
Another example: If you don't pay your mortgage, your house/car/whatever gets confiscated, and they sell it, and if you still owe money, you still have to pay it, correct?
Nope.
Here in Spain, the banks "lend" you money. For example, I owe a bank 30,000€. I stop paying my mortgage. They "lend" me 30,000€, so my mortgage is completed, but I never actually see the cash. This new loan is also a mortgage, but they don't call it that; they call it a "personal loan with property as collateral". This new loan has a higher interest rate, and I have to get taxed because those 30,000€ are capital gains.
I don't even have money, and now I have to pay even more debts. I love my country, -.-

They are taking 0.03% that was on deposit on x day

Wait a minute.  I may be confused by the term "bank deposit" as I attribute multiple meanings to it.  When they say they're taking 0.03% of all bank deposits, does that mean they're taking 0.03% of all money that has already been deposited in a bank, or does that mean that they're taking 0.03% of all money that is newly deposited in a bank?  I've been interpreting it as the former.

In terms of "reason to complain," yes, I think taking any percentage no matter how small from bank deposits is a reason to complain as it's completely unfair.  There has been a principle that once you have money, it's yours, and you can save up in the bank etc. and grow your wealth, and if you work hard enough you can make something of yourself.  On the other hand, I wouldn't see an uproar of .03% of deposits being taken, but it does open the door to major problems in the future.  I would certainly protest, as loudly as I could, if the US did something like that to my money -  even .03%

The spanish goverment has been taxing everything they can for the past few years, and it is a reason to complain.

there are other countries that charges up to 3% for bank deposits above 1,500 usd, so i think 0.03% there is no reason to complain, but anyway another reason to use bitcoin.

True.  And I would guess that if they try it again with a larger percentage, there may be an international uproar.  They're idiots playing with fire.  If everyone starts to think that their country is going to go after their bank deposits, bank runs will start.

This is my initial reaction too. 0.03% is honestly too small a percentage to have any significant effect. Others have argued that government can take a higher percentage next time. They sure can, but there is a limit of times they can tax deposits before a national uproar.

Agreed,  I didn't necessarily mean in the immediate future of Bitcoin would benefit.  Surely didn't think that anybody was going to close their bank accounts over this news I should have been more clear. I was thinking more potentially long term if things got worse this type of story could be helpful to attract new people.

Maybe things will be different in the future, but at least right now, I think all cryptos hinge on the success of bitcoin.  If bitcoin falls, they all go down.  And I'm not just talking about regulation.  Regulating bitcoin into oblivion would be the "nice" way of killing it.  There are other much more nasty ways.

I wouldn't think so. I would say that most people would not even notice as there are just so many people that don't even check their credit card statement or bank statement and just assume there is money there, and call to check their balance every so often.

They would definitely kill it. Or at least lose a lot of its value. But i guess there would be so many different coins that they can't "regulate" them all.

They may not be able to just skim a little off the top with bitcoin, but they could kill it.  If a large government or other organization wants to destroy bitcoin, there are a number of things they could do that would at least damage it.

As for Spain's "confiscation," it sounds like an experiment to me--see what kind of reaction it draws from its citizens and the financial markets to gauge the feasibility of doing it again, probably with a higher percentage.  I mean really--how much good would 0.03% do for their economy anyway?  It's just a drop in the bucket.  That's not going to help anything.

It's just like theft, but they call it politics.
Now try to picture it with bitcoin... nah

Perhaps if the citizens think this is just a test and will become something larger later on.
Kind of hard to say for certain what will happen though

Despite the small %, shouldn't this cause a panic of people taking all their money out of Spain's banks?

If I was a politician who wanted to steal this small of a portion of people's bank deposits, I would just implement a special tax on interest that equates to the same thing, justifying it because "the depositors aren't working or doing anything to earn that income anyway." Maybe toss in some leech imagery if the tax is at all unpopular. Or even better, just print 0.03% more money and thereby tax even people holding cash, without anybody noticing at all.

Doing it this way just seems like a terrible political decision.

Well you know what they say start small and work your way up
But basically it's the government saying we can't manage our books so we are introducing this fee to allow us to keep spending without needing to worry about fiscal austerity, do not worry its only going to be a small tiny fraction of a percent. (But it could become more if we need it)
http://www.reuters.com/article/2014/07/04/spain-tax-deposits-idUSL6N0PF2SF20140704

The country has one of the lowest tax takes in the European Union after a burst property bubble crippled the construction sector, one of the largest contributors to government coffers.

Madrid passed in June a blueprint for tax reform which aims to cut income and corporate taxes to stimulate consumer demand and investment in the midst of a nascent economic recovery.

Kind of backwards in a sense but who knows that might work lower taxes in the hunt for that Laffer Curve that probably was set at a higher tax bracket but this looks more politically appealing .
http://en.wikipedia.org/wiki/Laffer_curve

Hopefully a larger percentage of bank deposits will not need to be confiscated. If it does then I would say that people would move their money out of spanish bank deposits and into bitcoin, like what happened in cypris.

But the amount taken was very small, less the what Spaniards likely earned in interest in their bank accounts in one year so the net effect was essentially zero.

The EU banks are still very questionable in reference to their health and may or may not be able to payout deposits as needed.

That was my thought as well. Get people used to the idea by taking a small amount then take larger and larger amounts over time. Sort of like a progressive income tax but using time to dilate the process instead of progressively larger amounts from smaller and smaller groups of people.

Start small have a tiny precedent no one will complain about
But a precedent nonetheless to set and to pave the way for making a larger confiscation in the future.
Not a good sign at all here.

This new supports Bitcoin, buy more now before is too late, it is a great long-term profitable investment.

Soon or later everyone will get infected by the only virus which brings more benefits than bad things: Bitcoins

I don't think that they took a large enough percentage of bank deposits for this to be bullish for bitcoin. I am sure that people will not like this however It would amount to losing around a years worth of interest and would likely not get a lot of people to stop using the banking system.

This decision once again confirms the reliability of Bitcoin as a long term investment

Moves like these is why people trust the decentralized virtual currency, and this move begs for spanish people to unify for bitcoins

And often living off their parents' income ("the person commenting is usually young").

These people are generally very liberal and will come to expect that everything will be paid for by the government and the successful.

A step in the wrong direction and is bullish for bitcoin.  These types of fees have a way of going up incrementally over time.  Thanks alot for bringing this to our attention I plan to follow this story as things progress.

Exactly. And you see it here often too - all the talk about "hoarders" and "redistributing their bitcoins" if they aren't used it X time.  It is always easier to try to get someone else to pay more to support you than to do so yourself.

Nope...those damn Spaniards are famous for loving/hoarding their gold.  Only the uber-wealthy Spaniards will take a serious look at bitcoin as a store of value given the volatility over the past 8 months.  Once things settle down for awhile or the next big surge comes then watch out whatever government is in charge of the next collapsing economy.  Domino effect has begun fellas.  So much for the Debt-based Fiat systems lasting forever huh?

maybe it's one of those people who have a decent amount of savings but never pitch in. i know plenty of those as well.

It is just another form of the "fair share" garbage that politicians are spewing to demonize the well to do. It makes it easier to take their wealth if the average voter buys into the lies.

Funny thing is, I've spoken with people who regard savers as selfish pricks that are hoarding money instead of spending it and helping to keep others employed.  The person commenting is usually young, without any savings, and with huge debts for rapidly value depreciating products.

Not exactly. It is an agreement, you give the bank the money and you have a claim to redeem them. Important difference in case of bankruptcy.

The saying about the frog in a pot of water comes to mind. They won't suddenly take our freedoms, they will simply evaporate a little bit here and there while we go on about our business.

It should have more bad publicity! It's no coincidence that it is happening in summer while world cup is still running...

That's just the beginning, it's merely a test run. People are acclimatized with small amounts, then bigger amounts will follow.

ya.ya.yo!

you mean what other hedge vs. the dollar is available? oil, gold, or other raw materials. maybe they don't have the kind of room for growth that bitcoin has, but they are at least more stable.. and that's an important thing when you want to protect your investments.

Umm how would they do that exactly? Any attempt to tax crypto holdings would have to be completely voluntary and fail miserably.

The law is meaningless in regard to making it illegal to transfer the tax.  Taxing banks like this is a stealth way to tax people while looking like they are making someone else pay.  Banks will just pay less interest to depositors to make it up, or charge more for loans etc.

PEOPLE pay the taxes, the money only comes from the effort of people, but politicians want the naive to see them saying "oh, we are protecting you" when in reality they just want to have extra money without calling it a tax on people and having the bank be the (hidden) tax collector for them.

The more they confiscate, the higher the price of bitcoin will be. When the Cyprus events began unfolding, the Bitcoin rate surged significantly in several waves, ultimately reaching +1100 dollars per coin as people became more and more aware of it.

put your money in the bank, trust us, it's safe.

Hence taxing the bank is no difference than taxing the bank customer.

Government should just let all the banks compete with each other to lower fee and offer better benefit. Not taxing the entire industry into oblivion.

I have no idea what's he's talking about. I wouldn't trust anything but a cryptocoin there days.

WTF, this post title is SO full of bullshit.

Spain isn't confiscating anything, nor are they touching bank deposits.

The central government is unifying and ALREADY EXISTING tax in many regions "comunidades autónomas" aimed at banks NOT customers. Not only are they not touching customers deposits, they are further protecting them by making it illegal with this new law for banks to transfer the tax to their customers deposits, it's expressly prohibited in the same law. Now, maybe the banks still try to transfer part of this tax to their customers indirectly via fees or whatever, but that is the same with any other private/public business that is taxed and has to figure out how to balance a new tax with their margins.

Of course it's falsifiable. The problem is it would need to involve climate science, which deniers hate.

"Climate terrorism"

Climate change sounds like something that has all the necessary elements for a complete private property rights revocation. It affects everyone and it is totally unfalsifiable.

It is not right to penalise those who worked hard and save up for retirement, over those who spend every penny they earn.

Reuters article on bank deposit tax:
http://www.reuters.com/article/2014/07/04/spain-tax-deposits-idUSL6N0PF2SF20140704

They're already being violated. Civil asset forfeiture, anyone?
Private property rights will only be respected until there is a good enough reason to not respect them, such as a national emergency.

Bank accounts are private property. I think the bigger question is how much longer will the US government respect private property rights.

When the printing presses break down from the stress.

How long before this happens in the US?

Read this thread:
"My bank account's got robbed by European Commission. Over 700k is lost." - https://bitcointalksearch.org/topic/my-bank-accounts-got-robbed-by-european-commission-over-700k-is-lost-160292

Come to think of it, I wonder when they'll start thinking that holding cryptocurrency in your own wallet is basically a "deposit" in the wider cryptocurrency network? Don't laugh please...If they can do this to banking accounts, it won't be a far stretch to do it to Bitcoin.

It really went that high in Cyprus? ...wow!
I remember lower numbers at first, and then they dramatically raised the "take".

Lets see this for what it actually is. Theft. Pure and simple.

The sole purpose of a bank (in my mind at least) is to provide security for your deposit. I don't care if it is 0.03%, 10% or .00001% the fact that they are retrospectively taxing is theft. Don't expect citizens to play by the rules when you change them 6 months down the road.

What are alternatives besides Bitcoin?

I could be wrong, so bear with me...

If the price doesnt fluctuate by as much as it did in the past 3-4 months, we would be a viable escape route for people getting fleeced by their nation's draconic policies (or in my country's case, uncontrollable inflation).

Encouraging more people to spend their bitcoins for actual goods and services, and not just speculative trading, would be one of the best ways we could help stabilize the price. That, and merchant acceptance.

Cyprus took 47.5% on all deposits above 100k €

It may be small but its just the start, wait and watch

Wow, amazing. Taking money just for holding it in the bank. It's punishment!

How do you propose to make price stability a priority? What kinds of actions does that actually involve?

Give them an inch, they'll choke you for the mile.

This leaves us with the responsibility of making Bitcoin a good place to move their assets to once the banks come down on their necks like a pack of hungry wolves. Price stability, merchant adoption and core development funding should be at the top of our priority list.

.03% is innocuous, so who knows.. the people there might be just fine with paying such a small percentage.

True, that's 0.03 cents on the Euro, so in a 1000 euros deposit the tax is 30 cents.

Actually this law is mostly for cutting bank's profits, as banks will also pay this tax, and they loan a lot of money to each other without any interest, now they'll pay at least 0.03% on that.

That is just the foot in the door.

0.03% is such a small amount for all the bad publicity that comes. Didn't Cyprus take 10% or more?

they're so knee-deep in shit that there's not really much else they can do.


it's not like bitcoin is the only other alternative option though.

It's really time that people see the benefit of Bitcoin.

Plus it also limits how much banks can charge businesses for accepting debit and credit card payments.

I just think this may have the same significance as Cyprus.

And it is only the beginning.

Original article in Spanish:

http://www.libremercado.com/2014-07-04/la-banca-no-podra-repercutir-a-los-clientes-el-limite-a-las-comisiones-de-las-tarjetas-1276523068/

Joe

edit: short version in English: http://globaleconomicanalysis.blogspot.co.uk/2014/07/spain-issues-retroactive-003-tax-on.html