tax

Greek Tax Trap: overtaxing even zero-euro income with ‘deemed income criteria’

A shock is awaiting 2,400,000 Greek taxpayers with annual real income between zero and 5,000 euro. This year, they will have to pay tax even if they have no income at all. The tax law applied this year for the income of 2012, will be based on so-called “deem income criteria.” According to this Troika-imposed austerity measure, regardless of the actual income, every taxpayer is “charged” with a presumptive income of minimum 3,000 euro – for married couples 5,000- per year to cover living needs. In addition, another “presumptive income” is calculated by the tax authorities, if the taxpayer owns the home he lives in. Greek finance ministry will tax it presuming the owner needs several hundred euro per year for maintenance.

Daily Eleftheros Typos published on Saturday several examples of the injustice of this measure:

A pensioner had an annual income 4,800 euro in 2012. He lives alone in his home of 80 square meter in an area with objective value below 2,800 euro per sq.m.

Based on the income tax bracket the income of 4,800 euro is tax-free as the lower taxable cap is 5,000 euro.

when he will fill his income declaration this year though, he will have to add:

-3,000 euro for minimum living presumption and

-3,200 euro (40 euro/sq. m.) as residence maintenance presumption.

Based on these two ‘deemed income’ criteria, the tax office will calculate, the man has to have an income of 6,200 euro.

The pensioner will be charged with income tax of 10% for the amount of 1,200 euro (6,200 deemed income -5,000 tax-free threshold = 1,200 euro.). The pensioner will have to pay 120 euro even if the tax law officially grants him 5,000 euro are tax-free.

If this man has the luxury of owning a car, additional ‘deemed income’ will be added for vehicle maintenance cost. (more…)

It Can Happen Here: The Bank Confiscation Scheme for US and UK Depositors

By Ellen Brown

Global Research, March 29, 2013

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Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.  

New Zealand has a similar directive, discussed in my last articlehere, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19th:

The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

Can They Do That?

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state: (more…)

NEVER ENDING MISTAKES OF AN INCOMPETENT EU MAY BE LEADING TO ITS DISSOLUTION

lc--280In the morning hours of March 16,2013 the Eurogroup issued its infamous statement which could precipitate the dissolution of the eurozone and perhaps of the EU. It starts with words of welcome. ”The Eurogroup welcomes the political agreement reached with the Cypriot authorities on the cornerstones of the policy conditionality underlying a future macroeconomic adjustment programme…………” It continues wth difficult to understand words with double meaning until it gives the coup de grace. ”These measures include the introduction of an upfront one-off stability  levy applicable to resident and non-resident depositors……”  With this sentence the Eurogroup put an end to economic stability in the EU since for the first time in its history, the EU steals money belonging to bank depositors, under the guise of a so-called stability levy. A tax would be imposed on accounts under 100.000 euros and a heavier tax for accounts over 100.000.

Two days later, Cypriot Parliament voted against this decision. Not one member of Parliament voted in favour. The banks closed for more than a week, as depositors were able to get some money from ATM machines. The population, rightfully angry, demonstrated and protested against state robbery, while one angry depositor tried to break in his bank with a tractor. The President of the Eurogroup, simply took note of the decision of the Parliament while Merkel said that she would respect the decision. The decision of Parliament gave courage to the people of Greece, which were quite disappointed with the docile position taken by its Parliament which adopted with a great ease, measures that were even violating the Greek Constitution. (more…)

Savers across Europe will look on in horror at the Troika’s raid on Cyprus

It’s now become clear: the threat to European savers and banks isn’t anti-austerity parties but the Troika

The GuardianSunday 17 March 2013 17.06 GMT

People withdraw money from a cashpoint machine in the Cyprus capital, Nicosia

Account-holders withdraw money from a cash machine in the Cyprus capital, Nicosia. Photograph: Barbara Laborde/AFP/Getty Images
 

The imposition of a levy on savers in Cypriot banks marks a new turn in the European crisis. Savings of over €100,000 will be subject to a 10% tax, and those under €100,000 one of 6.7%, although it’s reported these levels may change. The raid has been instructed by the “Troika” – the European commission, the IMF and the European Central Bank – as part of a characteristic “take it or leave it” ultimatum to the Cypriot government. The parliament in Nicosia is being pressed to ratify the deal with the threat that without it there will be no bailout funds and the ECB will withdraw all liquidity support to the stricken banks.

The Troika and its supporters have justified the levy by arguing that the state could not support the debt burden of a bank bailout. But this simply means the debt burden has been transferred from the banks, where it properly belongs, to households, who had no part in their lending decisions.

As part of that propaganda campaign, the focus has been on Russian oligarchs and tax evaders who have been laundering funds through Cypriot banks. In fact, among those caught in the upper savings bracket are bound to be pensioners for whom this represents their entire life savings, and others who have recently borrowed enough money to buy a modest home. But even if only oligarchs were affectedE, this is surely an admission of guilt by the European and international authorities, who are responsible for the global regulation of banks and co-ordinating anti-money laundering activities. Their own failure can hardly be a justification for expropriating the small savers of Cyprus. (more…)