Seizures at Cyprus Already Being Repeated, in Principle, in American Levies

” The prospect of a tax on deposits in the banks of Cyprus has even left-leaning economic commentators in a tizzy.“A tactical blunder,” declared Lawrence Summers, who was President Clinton’s Treasury Secretary and chairman of the National Economic Council for President Obama. A proposed tax of 6.75% on deposits up to about $130,000 and of 9.9% on deposits of more than $130,000 “would unfairly punish savers and could do lasting damage to confidence in banks in other euro-zone countries in financial crisis,” the New York Times wrote in an editorial denouncing the idea

  Is it the taking? Bloomberg View columnist Caroline Baum, a sage, criticized the Cyprus proposal on the grounds that it is a confiscation that “amounts to a seizure of private property.” For those of us Americans who will see the IRS or state governments withdraw funds from our own bank accounts next month for tax owed, or who are seeing payroll withdrawals and estimated tax payments this year that are higher than they have been in a decade, the distinction between “seizure of private property” in Cyprus and here at home will be, alas, an awfully fine one.”

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