Capital levy

In ancient Athens during its democracy, there was a form of capital levy known as a liturgy (Ancient Greek: λειτουργία, romanized: leitourgia, lit. '"work for the people"; from litos ergos, "public service"').[1] The liturgy might anything from financing a public play to supplying and manning a trireme for the navy. An Athenian could volunteer for such a levy, but if no-one volunteered, a wealthy person meeting the eligibility requirements would be ordered to supply it. They could escape by nominating someone wealthier to take over the duty; if the nominated person disputed this, the nominator could take the liturgy, or offer to exchange property with their nominee (antidosis). If the nominee refused, the matter went to court, and the liturgy was assigned whoever the court case determined to be wealthier. Athenians often concealed their wealth to escape taxation, and sycophants who discovered concealed wealth might use it as blackmail material. Antidosis helped the state identify the wealthiest people, and kept the rich suspicious of one another.[2][3] Athens also had a wealth tax called eisphora (see symmoria), and for this purpose the city required each rich person give an estimate of his fortune (τίμημα). These self-assessments were not very accurate.[4]^:p.159 The liturgy has not been much studied by economists.[2]

During both World Wars, capital levies were introduced, with the generally-stated aim of distributing the sacrifices required by the war more evenly. This had a significant effect on both income and wealth distributions, lasting decades into the post-war period. Such policies were commonly referred to as the "conscription of wealth".[5]

a fundamental objection to the government's policy of conscription is that it conscripts human life only, and that it does not attempt to conscript wealth...

— Liberal party election platform, autumn 1917, Canada

The Economist, a British publication, opposed capital levies, but supported "direct taxation heavy enough to amount to rationing of citizens' incomes"; similarly, the American economist Oliver Mitchell Wentworth Sprague, in the Economic Journal, argued that that "conscription of men should logically and equitably be accompanied by something in the nature of conscription of current income above that which is absolutely necessary".[5]

The Italian government of Giuliano Amato imposed a 0.6 percent levy on all bank deposits on 11 July 1992.[6]

In 1999, Donald Trump proposed for the United States a one off 14.25% levy on the net worth of individuals and trusts worth $10 million or more. Trump claimed that this would generate $5.7 trillion in new taxes, which could be used to eliminate the national debt.[7]

The Cypriot government levied 47.5 percent of Bank of Cyprus deposits over one hundred thousand Euros in July 2013.[8][9] In October 2013, the International Monetary Fund released a report[10] stating, "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."[11][10] The next year the Bundesbank proposed that Eurozone countries should attempt a one-off levy of bank deposits to avoid bankruptcy.[12][13]

A February 2014 report by Reuters showed the idea had gained traction in the European Commission, which will ask its insurance watchdog later that year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing".[14]