The taxes are being imposed by the EU, the IMF, and the government of Cyprus. “But here’s the real nasty stuff: You’re asking the people who played by the rules, you’re asking the people who lived within their means to bail out the big banks that didn’t.”
News broke over the weekend that as part of the bailout of the banks in the small, European country of Cyprus, ordinary bank depositors would have to pay a “haircut” tax of at least 6.75%.
In other words, if you managed to save $10,000 in the bank, already having paid all the various taxes that hit your paycheck before you get to deposit it, you’re going to lose $675 of that to help pay for the bailout.
The unprecedented penalty meant that everyday Cypriots would have to give up a percentage of whatever they had saved in the back. Unsurprisingly, there was soon a run on the banks and ATMs as people tried to get their money out. But as Glenn warned on radio this morning, the real danger is that this unheard of penalty could be placed on other, larger European countries who are facing a growing and ongoing debt crisis.
“The announcement was intentionally made late Friday or early Saturday and buried in an avalanche of details,” Glenn said. “The only coverage of this issue when it came out, the only coverage was on Twitter. “
When the news started to spread that the bailout deal could happen, Cypriots started to go to the ATMs to get the money out before the tax hit them, but quickly found they couldn’t get their cash out of the banks.
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