Outright property confiscation by governments is something that’s ardently disparaged here at the Economic Prism. There’s no justification we can rationalize for state sponsored theft. This includes penalizing those who are young and healthy with a disproportionate burden of a compulsory health insurance program.
Along these lines, we don’t envy those who’ve managed to accumulate a greater pile of stones than us. Like Margaret Thatcher, we “do not know anyone who has gotten to the top without hard work.” Thus, it only seems right they should be free to enjoy the fruits of their labors.
Still, many people out there want to soak the rich. Somehow confiscating their property is the solution to the government’s spending problem. Scaling back government promises is politically unthinkable…even though that’s exactly what’s needed.
But these days it’s not just the property of the rich that’s being eyed by over indebted governments. It’s the property of anyone that has any assets, no matter how meager.
What we mean is your property really isn’t yours. It’s the governments. Most people don’t know this yet. However, soon they will…
The Case for the Direct Confiscation of Property
For example, in its October Fiscal Monitor Report, titled Taxing Times, the International Monetary Fund made the case for the direct confiscation of property. We wish we were making this up. But we’re not.
Taking property, in the form of a massive tax, is what the world elites want to do to solve the sovereign debt problem that’s plaguing governments the world over. What follows is straight from the IMF’s October Report…
“The sharp deterioration of the public finances in many countries has revived interest in a ‘capital levy’—a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).
“The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax—on bondholders—that also falls on nonresidents).”
Notice, the options: 1) Wealth confiscation by a one-off tax on private wealth; 2) Stiffing the bond holders through debt repudiation; and 3) Inflating the debt away by creating massive amounts of money.
Nowhere was the mention of reforming entitlements and transfer payment programs, which are the root of the problem. So, how much will it cost?
Property Confiscation Is Coming
“The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth.”
Recognize that this 10 percent tax is not just on annual income…it is on property. This includes your bank account, home equity, investment accounts, and retirement savings – like your 401k or Roth IRA. The IMF intends for your government to get its grubby hands on your property.
Quite frankly, this is outright robbery. Yet, unfortunately, there’s not much you can really do about it. Moving capital offshore is becoming increasingly more difficult. Besides, even if you do jump through all the hoops needed, where would you move your capital too, really?
You see, this is what the wholesale bankruptcy of the modern welfare state is coming to. We don’t like it. But by happenstance we are caught in the middle of it.
Clearly, the state will do whatever it takes to remain in business. Confiscation of your property through a “capital levy” is coming. These are the reality of what’s before us.
We always knew the New Deal dream of something for nothing would turn into a nightmare. Naturally, we’ll crack a smile and pay much, much more than our fair share. When it comes down to it, funding a bankrupt government is what we live for…we don’t have much choice in the matter. We might as well enjoy it as best we can.
for Economic Prism