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19 Mar 2013
Forex Flash: Many claim that a Rubicon has been crossed in Cyprus - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that many, including the French Finance Minister, are claiming some taboo has been broken. Others claim a Rubicon has been crossed. However, they are not so convinced.
Firstly, they note that the generic category of wealth tax in contrast to income and sales tax is not uncommon in Europe. Secondly, they highlight that a tax on deposits is also not unprecedented. For example, recall that in July 1992, Italy's government under Prime Minister Amato took 0.6% of all bank deposits (imposed a 0.3% tax on all real estate). They feel that it is not the amount of the tax or the moral justification that is the issue, but the principle and precedent. Third, they comment that throughout this crisis, the burden of the adjustment has fallen on those who are generally less well off. They write, “Minimum wages have been cut. Health care benefits have been cut. Pensions have been cut. All for the sake of keeping some investors whole.”
Firstly, they note that the generic category of wealth tax in contrast to income and sales tax is not uncommon in Europe. Secondly, they highlight that a tax on deposits is also not unprecedented. For example, recall that in July 1992, Italy's government under Prime Minister Amato took 0.6% of all bank deposits (imposed a 0.3% tax on all real estate). They feel that it is not the amount of the tax or the moral justification that is the issue, but the principle and precedent. Third, they comment that throughout this crisis, the burden of the adjustment has fallen on those who are generally less well off. They write, “Minimum wages have been cut. Health care benefits have been cut. Pensions have been cut. All for the sake of keeping some investors whole.”