Given the Russian cash funding the Tory party.....

I don't know enough about it Maizie, but I would have thought that once set out on that path, you could gradually bring the two into line within each of the tax tranches. It would take some of the burden of taxes off those who only earn their income by salary or wage. Such a change might have a balancing effect on the age groups too.

Or perhaps I'm missing something

You're missing shares in startups or new issues. But they aren't the only shares on the market. And they are more risky as you don't know how profitable the company will be. But, as I said, it could be arranged that their dividends have a different rate of taxation to'reward' the risk takers who are investing directly in the company. It wouldn't be beyond the bounds of possibility.

So, if the tax on dividends went up to, say, 10%, you would stop investing in shares? It's still a good return. Better than 20% on earned income.

Germanshepherdsmum

*Daisy*, people can invest in shares and pay 5% income tax on the dividends they receive. This encourages investment in companies with a share capital does it not? If the money were invested in another income producing way they would pay full tax on the income. So investment in shares is beneficial to the company and the investor. I would have thought that was pretty obvious.

Aren't you describing the buying and selling of shares as opposed to dividends? The buying and selling of shares surely attracts Capital Gains? My point was about income.

I can't see how the buying and selling of shares helps the company. They just get a change of shareholder. No additional money is invested in the company.

Or perhaps I'm missing something.

I understand the point you’re making Maizie but companies are ‘going public’ all the time as well as existing public companies issuing new shares. I own shares which were bought directly from the company. Eventually I will either sell them on the market or back to the company. If the incentive to buy shares were to disappear we would soon see the results in terms of new investment in companies crashing.

An interesting article in the Guardian about who to target with sanctions against Russia - and it's not the oligarchs. According to this, it's the ruling classes and not the oligarchs who are the ones to be hit. Those who like to travel to Europe on holiday - stop their visas for example.

On holiday in Menton a few years ago we visited the Ephrussi Villa and Gardens on Cap Ferrat. Having been there some years previously we were surprised at the guide books in Russian. No other languages apart from English and French. The reason being there are so many Russians who holiday on the Riviera. If they were prevented from taking their annual holiday in the West they would soon start to complain.

www.theguardian.com/commentisfree/2022/feb/23/obsession-sanctions-oligarchs-putin-hurt-russian-leader-ukraine

Germanshepherdsmum

*Daisy*, people can invest in shares and pay 5% income tax on the dividends they receive. This encourages investment in companies with a share capital does it not? If the money were invested in another income producing way they would pay full tax on the income. So investment in shares is beneficial to the company and the investor. I would have thought that was pretty obvious.

you're ignoring the point I made earlier, GSM. The only time the money from share purchases goes to the company whose shares they are is when the company issues shares to raise money, either at start up or if they make a new share issue. The rest of the share transactions are between the owner of the shares and the purchaser. I own shares in a company, I sell some to you. I get the money you pay for them; it goes into my bank account; nowhere near the company's accounts.

People buy shares as a speculation, in anticipation of getting an income from dividend payments. Dividend is paid from the company's net profits after taxation. The rationale for the lower rate of tax on dividend income is that the money has already been taxed. Which I find absurd because one could argue that wages and salaries are already taxed, so why should one have to pay other taxes, such as VAT, out of their income. However, taxing unearned dividend income at a higher rate will have no affect at all on the company that has paid out the dividend. They've already paid their taxes (we hope...)

The counter argument, of course, is, why do people who work have to pay more tax on their income than those who have just purchased some shares and done nothing to contribute to the company's profits?

I do realise that some people have invested directly in a company and so contributed to its success. I'm sure that an accommodation could be made for them.

Kali2

Caroline Lucas has just raised this issue at PMQT and asked if the PM has read the Report on Russian Interference. He said he sees none! So he is blind as well as all the rest then!!!

The speaker was downright rude to Caroline. Yet again throwing his weight around by reprimanding the opposition benches whilst letting the government get away with not answering questions, when they do telling lies.

Daisy, people can invest in shares and pay 5% income tax on the dividends they receive. This encourages investment in companies with a share capital does it not? If the money were invested in another income producing way they would pay full tax on the income. So investment in shares is beneficial to the company and the investor. I would have thought that was pretty obvious.

Caroline Lucas has just raised this issue at PMQT and asked if the PM has read the Report on Russian Interference. He said he sees none! So he is blind as well as all the rest then!!!

MaizieD

DaisyAnne

AGAA4 Russia appears to have an economy of between half and two thirds that of the UK. Interestingly, we have a higher percentage living in poverty.

Do we?
The figure I saw quoted recently (but admittedly haven't checked) is that 53% of Russians are living in poverty.

I think it depends on how you define poverty. The figures came from here where it says: "In Russia, 13.3% live below the poverty line as of 2015. In United Kingdom, however, that number is 15.0% as of 2013." It is very dated. I think it took me by surprise as it has you but I should have followed it up rather than quoting it.

I was trying to check the size of the two economies as I heard a commentator say Russia's economy was half the size of ours, yesterday.

“The US and EU are coordinating sanctions, including now on Russian sovereign debt. Meanwhile the UK appears to be out of the loop with the weakest sanctions package of all. This should be a matter of national embarrassment and concern. What’s holding our Government back?”

Germanshepherdsmum

*Daisy*, taxing share income at the same rate as other income would have a disastrous effect on investment in UK companies.

If you believe that to be true, could you explain? Currently, it is just an opinion - which may or may not be true but won't convince me, or possibly others, without facts.

Germanshepherdsmum

Pammie1

According to a news report this morning, places like Kensington and Knightsbridge are known as ‘the launderette’ because of the massive amounts of dirty Russian money. If we’ve allowed this to happen it’s going to be very difficult to impose sanctions without hurting ourselves. So far the UK sanctions have involved five banks and three individuals - Putin must be having sleepless nights !!

Not all Russians are crooks and not all their property is bought with dirty money. English solicitors and accountants have to comply with strict money laundering rules and their files are regularly inspected by their professional bodies to ensure compliance. Believe me, you fail to comply at your professional peril.

Wouldn’t disagree with you at all - just pondering the news report, which seemed to be saying that these areas were awash with dirty Russian money and a blind eye was being turned to it.

Coastpath

Continuing the divergence briefly - I would like to pay higher taxes if it would help raise children out of poverty and provide really effective and fair education, health and social services. I have always felt this way. I believe I'm not alone in this.

Lovely thought. Never gonna happen under a Tory government. They still cling to the notion that poverty is the fault of the poor, and since most of the government are rich, they have no need for the NHS, so they pay it lip service.

Pammie1

According to a news report this morning, places like Kensington and Knightsbridge are known as ‘the launderette’ because of the massive amounts of dirty Russian money. If we’ve allowed this to happen it’s going to be very difficult to impose sanctions without hurting ourselves. So far the UK sanctions have involved five banks and three individuals - Putin must be having sleepless nights !!

Not all Russians are crooks and not all their property is bought with dirty money. English solicitors and accountants have to comply with strict money laundering rules and their files are regularly inspected by their professional bodies to ensure compliance. Believe me, you fail to comply at your professional peril.

DaisyAnne

AGAA4 Russia appears to have an economy of between half and two thirds that of the UK. Interestingly, we have a higher percentage living in poverty.

Do we?
The figure I saw quoted recently (but admittedly haven't checked) is that 53% of Russians are living in poverty.

GrannyGravy13

Whitewavemark2

Well if it is the case, and I very much doubt it, it will not be as a result of what Johnson has done.

It is being reported on the news Vladimir Putin ready for diplomacy

To be honest I do not care what sanctions have got to him, as long as war in Eastern Europe can be avoided.

Unfortunately just seen on the news that Biden has said there will be no summit unless Putin pulls back the troops. Looks like the USA are out.

Germanshepherdsmum

*Daisy*, taxing share income at the same rate as other income would have a disastrous effect on investment in UK companies.

Why should that be, GSM?

When someone buys shares the money they pay for them goes nowhere near the company whose shares they've bought, unless it is new share issue by the company. The purchase price goes to whoever owned the shares that have just been purchased. Most of the stock market is pure speculation. Nothing to do with investing a a company.

Daisy, taxing share income at the same rate as other income would have a disastrous effect on investment in UK companies.

Whitewavemark2

What I would like is fair tax.

But we diverge.

"But we diverge" Whitewavemark2

I'm apologise if I have taken this off-topic. However, Boris's "Dirty Government" is about the rich getting richer while others get poorer. The ties between Russia, this government, and money feel as if they have a bearing on why the sanctions are so feeble. To me, it's all part and parcel of the same attitude.

Germanshepherdsmum

You said we should all pay the same rate of tax. That would certainly mean many of us paying a great deal more and probably the very rich paying a great deal less. I don’t what you said was what you meant.

I think you misunderstood my use of "all income". I agree it wasn't as explicit as it could be. (Note to self: do not post while making a phone call )

Let's take an example. Say, you get half what your neighbour gets in salary/wages. You also earn the same amount from investments. Your neighbour has no other source of income. You both, therefore, have the same amount of income. However, currently, they are taxed differently. Surely it would not be unreasonable for income from investments to be added to income from earnings and the total amount treated in the way your neighbour's income - only from earnings - is treated?

The three individuals do not live in the U.K. and the banks are not the biggest players.

I suspect that those who wish to do so are busy moving their money out if the U.K. now.

Johnson is a good friend to the crooks.

Given the amount of donations the they receive from Russian donors the Conservative Party are going to find it very difficult to impose sanctions without hurting itself.

According to a news report this morning, places like Kensington and Knightsbridge are known as ‘the launderette’ because of the massive amounts of dirty Russian money. If we’ve allowed this to happen it’s going to be very difficult to impose sanctions without hurting ourselves. So far the UK sanctions have involved five banks and three individuals - Putin must be having sleepless nights !!