October 28, 2015 No.4
https://www.facebook.com/mehtarahulc/posts/10153104526046922
How bank-owners across the world rob rob citizens of their respective countries
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By bribing apex-MPs , the bank-owners across world have managed to print law-drafts which enable them to rob commons aka non-bank-owners. I described one such law-drafts yesterday --- Almost all countries have law-drafts that if a non-banker owns a property, then he has to pay wealth tax, municipal taxes, inheritance taxes etc. But if a bank-owner owns property via bank, then these taxes are practically nil. (see details athttps://www.facebook.com/mehtarahulc/posts/10153102501176922 ).
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Here is one such law-draft
.
(a) Say a property value is Rs 1 crore. Say buyer gives down payment of Rs 20 lakhs and bank gives loan of Rs 80 lakhs. Say buyer has paid Rs 20 lakh principal. So now bank's principal due is Rs 60 lakhs. But say buyer defaults and bank takes over the house. And say bank sells it for Rs 90 lakhs later. Then bank isnt required to pay CAPITAL GAINS tax on Rs 30 lakhs !!! It can take the amount as profits and adjust it against losses / expenses and pay income tax only on the profits after expenses losses. But a non-bank-owner has to pay capital gains tax, and he can adjust it ONLY against capital losses and not against expenses. Also, in many cases, he can adjust ONLY against capital losses of same category. IOW, the capital gains tax laws favor bank-owners over non-bank-owners.
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(b) Say a property value is Rs 1 crore. Say buyer gives down payment of Rs 20 lakhs and bank gives loan of Rs 80 lakhs. Say buyer has paid Rs 20 lakh principal. So now bank's principal due is Rs 60 lakhs. But say buyer defaults and bank takes over the house. And say bank sells it for Rs 90 lakhs later. Then bank is allowed to keep WHOLE Rs 90 lakhs, not just Rs 60 lakhs plus changes. The bank-owners rationalize this as --- "see, if the house had fetched only Rs 50 lakhs, then bank would have lost Rs 10 lakhs. So since bank has to bear losses, the bank should be allowed to keep profits from sale as well". The argument has hole because the interest that bank charges already covers the profits. IOW, bank owners have two opportunities to make profits --- from interests if the buyer defauts and from sale after repossession if the buyer defaults. This double advantage is at the cost of naon-bankers
.
Suffices to say that bank-owners have too many tax benefits, and so in real estate market, they manage to benefit at the cost of non-bank-owners aka commons.
.
Solution?
.
As far as India goes, solution I propose is wealth tax on land / construction, and Right to Recall RBI / SBI Chairman. The wealth tax will reduce speculation in real estate and also reduce tax benefits bank-owners get at the cost of non-bank-owners. And RTR-RBI-Chairman and RTR-SBI-Chairman will reduce many other such practices that go via banking.
https://www.facebook.com/mehtarahulc/posts/10153104526046922
How bank-owners across the world rob rob citizens of their respective countries
.
By bribing apex-MPs , the bank-owners across world have managed to print law-drafts which enable them to rob commons aka non-bank-owners. I described one such law-drafts yesterday --- Almost all countries have law-drafts that if a non-banker owns a property, then he has to pay wealth tax, municipal taxes, inheritance taxes etc. But if a bank-owner owns property via bank, then these taxes are practically nil. (see details athttps://www.facebook.com/mehtarahulc/posts/10153102501176922 ).
.
Here is one such law-draft
.
(a) Say a property value is Rs 1 crore. Say buyer gives down payment of Rs 20 lakhs and bank gives loan of Rs 80 lakhs. Say buyer has paid Rs 20 lakh principal. So now bank's principal due is Rs 60 lakhs. But say buyer defaults and bank takes over the house. And say bank sells it for Rs 90 lakhs later. Then bank isnt required to pay CAPITAL GAINS tax on Rs 30 lakhs !!! It can take the amount as profits and adjust it against losses / expenses and pay income tax only on the profits after expenses losses. But a non-bank-owner has to pay capital gains tax, and he can adjust it ONLY against capital losses and not against expenses. Also, in many cases, he can adjust ONLY against capital losses of same category. IOW, the capital gains tax laws favor bank-owners over non-bank-owners.
.
(b) Say a property value is Rs 1 crore. Say buyer gives down payment of Rs 20 lakhs and bank gives loan of Rs 80 lakhs. Say buyer has paid Rs 20 lakh principal. So now bank's principal due is Rs 60 lakhs. But say buyer defaults and bank takes over the house. And say bank sells it for Rs 90 lakhs later. Then bank is allowed to keep WHOLE Rs 90 lakhs, not just Rs 60 lakhs plus changes. The bank-owners rationalize this as --- "see, if the house had fetched only Rs 50 lakhs, then bank would have lost Rs 10 lakhs. So since bank has to bear losses, the bank should be allowed to keep profits from sale as well". The argument has hole because the interest that bank charges already covers the profits. IOW, bank owners have two opportunities to make profits --- from interests if the buyer defauts and from sale after repossession if the buyer defaults. This double advantage is at the cost of naon-bankers
.
Suffices to say that bank-owners have too many tax benefits, and so in real estate market, they manage to benefit at the cost of non-bank-owners aka commons.
.
Solution?
.
As far as India goes, solution I propose is wealth tax on land / construction, and Right to Recall RBI / SBI Chairman. The wealth tax will reduce speculation in real estate and also reduce tax benefits bank-owners get at the cost of non-bank-owners. And RTR-RBI-Chairman and RTR-SBI-Chairman will reduce many other such practices that go via banking.
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