2. Banks stopped making most of their money from deposits a long time ago.
I'm curious where you think they put all that currency. You could argue they're hiding it from the tax authorities by putting it in a safe deposit box, but by definition nobody knows how much cash there actually is in those boxes, and of course raising taxes on such cash hoards isn't going to affect such.
> Banks stopped making most of their money from deposits a long time ago.
Consider this advertisement:
https://www.key.com/personal/promotions/dda/200cash.jsp?sqkl...
If banks were not making money from deposits, why are they offering $200 in cash to open a checking account?
Monthly account-maintenance fee. ATM fee. Fee if you don't have direct deposit. Fee for cashing checks. Fee for using a teller. Fee if they process debits before credits so as to push you into overdraft even though, by chronological transaction order, you never overdrafted.
They don't make money by accepting deposits and making loans; they make money by squeezing fees out of people who don't have much money.
https://www.coastcapitalsavings.com/Personal/Banking/Chequin...
Unlimited debit/atm/teller/billpay/cheque/dd/dw transactions, no minimum limit, no requirement for direct deposit (but if you use it, its free too), no monthly fee.
> they make money by squeezing fees out of people who don't have much money
They do make money from people who don't pay attention to their balance - regardless of whether they are poor or not.
> They don't make money by accepting deposits and making loans
That perplexes me since they constantly try to sell me loans.
It is unfortunately the case that being poor is much more expensive than being rich. Banks on average know and take advantage of this.
i completely disagree.
first of all, you're arguing semantics, and you know very well that there are many fractional reserve bank accounts with lots of accumulated cash available for withdrawal at any time. that is a working, popular, valid definition of "hoarding cash".
second, do not underestimate the amount of cold, hard, paper (polymer?) cash hidden in safe deposit boxes distributed around the world. you can bet your bottom dollar (har har) that this cash isn't being lent out to commercial banking clients and mortgage buyers. it's sitting in boxes, unused. in a certain sense, it's an anti-inflationary savings mechanism.
that's not even counting the gold, platinum, pearls, diamonds, precious gems, and etc.
Note that the government requires this reserve because otherwise the bank will loan it out, i.e. the bank doesn't actually desire to keep cash on hand. Neither do rich people. Even drug lords don't want cash hoards, it's why they launder it.
It's not splitting hairs over semantics. People who have money in the bank do not have a cash hoard that they are withholding from the economy.
As far as people keeping assets in safety deposit boxes, nobody has any idea how much is in them, so it's rather pointless to talk about them. I do find it hard to believe that Apple's billions in "cash" is really a hoard in a safety deposit box that's withheld from the economy.
>that is a working, popular, valid definition of "hoarding cash".
Not in the sense we are discussing of it being withheld from the economy.
(For fun, watch Breaking Bad, where one of Heisenberg's biggest problems is trying to convert cubic feet of cash into something he can spend.)
Read about how this tax work before complaining about it, please. It's only for generally big amounts of money, and your mortgage and other stuff is subtracted, making it a non-issue for almost everyone. And you can fine invest the money instead.
Wait, what?