How much is that tax?
Ah! At the present rate, savers get next to nothing on their deposits, and the official rate of consumer price inflation CPI is about 2%. This makes the effective tax rate — or the negative interest rate — about 2%.
But if you calculate the CPI the way the Bureau of Labor Statistics did when Jimmy Carter was president, the rate of consumer price increases is more like 10%. This puts the annual “tax” on savers closer to 10%.
So go ahead. Put your money in a bank. Let your interest payments accumulate. Ten years from now, you will have less than half of what you have today.
You might as well have left your money in the Bank of Cyprus…
via What a Wicked World!.