In what looks to become a trend, reports emerged today that Greece is finalizing capital controls that will take the form of a tax on withdrawals. The country is also considering a ‘ceiling’ on the withdrawals as well.
Specifically, the struggling nation will introduce a surcharge for all cashpoint withdrawals and financial transactions. The move is a desperate attempt to prevent citizens withdrawing their money from the country's beleaguered banks.
Ministers hope to raise as much as €180 million from the controversial move, which the Athens government hopes will help the country avoid defaulting on debts owed to international creditors.
A senior finance ministry official helpfully offered that the charge will not apply to money paid in to a bank account. At least not yet. With Australia taxing deposits its possible Greece could resort to similar moves as well.
The official said that Greece is also considering a ceiling on bank transfers over €1 million in what would signal the start for hard capital controls, if Greece does go bust in the coming months.
The trend towards stealing bank deposits from citizens is a worrying trend, as governments who already heavily tax citizens come back to the trough once they've mismanaged the tax revenues.
Readers should remember that elaborate tax structures are an incredibly modern invention. They are just over 60 years old - prior to that only minimal tax was paid on property. Further, they were supposed to be temporary wartime measures that would be repealed at the end of the conflict.
Governments have since become addicted to the stream of easy money and are increasingly inventing new and elaborate ways to part savers and their money.