In the 100-plus-page report dryly titled Fiscal Monitor: Taxing Times, the IMF has essentially given lawmakers from deeply indebted countries a paint-by-numbers kit on how to extract larger tax revenues from anyone with any level of wealth. Though the IMF’s language is couched in faux-objectivity, the underlying message is shockingly clear: Many developed nations, especially the United States, have abundant opportunities “to raise revenue from the top of the income distribution,” using a variety of methods including the direct confiscation of personal wealth.
But it’s best that I let the report speak for itself and let you come to your own conclusions…
“The sharp deterioration of the public finances in many countries has revived interest in a ‘capital levy’ – a one-off tax on private wealth – as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). … The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away.”Those sentiments, from page 49 of the IMF report, should scare the hell out of anyone with even a modicum of wealth … for that wealth could soon be under assault.
Consider what that paragraph above is really saying. Its sentiment is clear: You, the developed countries of the world that have done such a masterful job of suffocating yourselves with more debt than you will ever be able to repay, have three options. You can default on your debt down to a level that is manageable … you can inflate the hell out of your economy and in that process destroy your currency and probably spark a bout of hyperinflation … or you can claim eminent domain over a portion of your citizens’ personal wealth and simply take it for the needs of the state.
And look at what the endgame is: “debt sustainability.” Not debt eradication. Not learning to live within the revenue stream you generate as a country. Just the ability to continue relying on debt … largely to pay for bloated welfare programs that will be the death of many Western economies in the not-too-distant future – and that just gets us to a point sometime in the future when debt levels are too high again and government once again imposes a capital levy.
Please understand that the IMF is not some wacky band of fringe-dwelling lunatics peddling daft ideas to no one of importance. It’s the central banker to the world, and it’s funded by the so-called G20 nations, the world’s 20 largest economies. What the IMF suggests is taken quite seriously inside the halls of congresses and parliaments throughout the developed world. Its reports often serve as the backbone for the various financial policies that lawmakers undertake across the globe.
The organization doesn’t publish random musings. It deliberately sends messages to those with the greatest influence in shaping the world’s monetary and taxation policies. The message it’s sending with this new report is that the developed world is in a seriously bad way, and that the radical steps required to keep the cart on the rails mean that anyone with any wealth will have to part with what they’ve worked so hard to accumulate … for the good of the state.
Scariest of all in the IMF’s assessment is the phrase:
“If it is implemented before avoidance is possible.”The IMF reflexively recognizes that the medicine it prescribes will not go down without force, and that those of us who can will rapidly seek ways to keep the government’s greedy paws away from our personal wealth.
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