Rishi pays tax at 22% and NI.

[GPTec1]

This really, £5m in earnings, tax 1m, rate at 22% and no National insurance.

Not bad is it? yet all we get from the 'right is "the wealthy pay enough already"

Do they?

I bet all those on/or have been striking in NHS, education, rail would love an overall rate of 22%.

Should we all pay tax at 22% ? regardless of earnings?

I had a quick google and that tax was replaced by another wealth tax and the potential tax lost was in the single €billion figures?

Our wealth tax rates are lower than France, so I don’t see what the issue is about raising them.

Rishi Sunak, while I don’t like getting into individuals, is a good example of why the idea of taxing wealth = reduced investment is fallacy.

He has made a mint out of the financial crisis. Places that money in stocks and shares. Makes money on dividends, share/stock sales etc.

He isn’t investing in businesses in the UK. His “contribution” when he’s not the PM, is just to buy and consume stuff. And there is only so much he can buy/eat/consume.

That’s why it isn’t a good idea to have a smaller number of individuals with vast wealth. Because those individuals can only consume so much.

It’s why the postage stamp, when introduced, was only a penny. They recognised that it was better to have loads of people buying cheap stamps rather than a handful buying expensive stamps - because individuals can only send so many letters.

I mean in terms of how well off the average person is doing compared to the UK….

The reason that tax is lower on dividends and capital gains is that both are signed of a successful business.

Dividends are the distributions of profits from a company and aren't a tax deductible expense in that company, so the theory is that to have made a profit that can be distributed to its shareholders it must pay tax on it first.

So while an investor might only pay 39.35% on the dividends, the company paying the dividend will, if UK based, have paid 19% corporation tax on its profits (this is going up to 25% for larger businesses next month).

So, for example, a company makes £250,000 profit. It pays £47,500 in corporation tax and distributes the remaining £202,500 as a dividend. If the shareholder is an upper rate tax payer, they'll pay £79,684 in tax.

HMRC will have received, from a £250,000 profit £127,184 in tax (50.9%).

Similarly, if someone has disposed of assets at a profit (and let's face it - all Rishi's come from investment funds, not property), then it's again a sign of a successful business as share prices generally only increase if a company is doing well. Those companies will have been paying tax, so the capital gains tax is an additional tax take.

For anyone interested, the full document is here - Government link

Based on his 2021/22 figures, he will have paid £7,002 in NI on his Employment income, which isn't mentioned on the letter.

In 2020/21 this would have been £6,986 and in 2019/20 £5,939

I hate all this eat the rich, politics of envy BS. Judge Rishi on his performance, not his money: plus he objectively pays A FUCK TONNE of tax.

And what did Rishi do to make that business successful? Aside from having a blind trust invest in the right shares for him?

I have to say I find the hero worshipping of the rich really sad. As if having a load of zeros at the end of your bank statement makes you a better person. That the only worthy contribution is the taxes that you pay, fuck anything else.

@Believeitornot invest money towards the sides of that company. Or does he have to be down the pit for it to count?

@Believeitornot speak for yourself. I didn't start a thread idolising Rishi's financial value. Neither do I think he should be criticised for it, especially when he contributes massively to the public purse

How does buying shares invest in a company? Unless they are newly issued shares - how?

I wouldn’t say it’s hero worshipping, just recognising that those who pay colossal sums in tax have paid more than their way regardless of the %.

It would be fantastic if the CoL could be brought down though as I think it’s unfair that decent housing is now an extortionate investment and, in some areas, the preserve of the rich, rather than something which is available to normal people working in ordinary jobs. I am mortgage free now but would happily see the price of my house tank along with that of all other properties if it meant the ordinary young could get on the property ladder and not have to work so hard for so little return.

Not as a proportion.

The bigger picture is that we have a broken system where those earning average wages have no way of getting living wages and those in power have no interest in making it better. Those in power take away their bargaining power. Those in power talk about difficult choices, but they’re not difficult for them because they don’t feel the result in their pockets.

Our economy is broken.

He doesn't have to do anything. Anyone can be a shareholder of a business.

You don't have to do anything to benefit from being the recipient of a dividend from British Telecom, for example.

The bottom line is, he married well and has a lot of family money, which he pays tax on based on the rules. The rules that have been in place for a very long time before he was ever Chancellor. The tax rates have actually increased significantly on dividends in the last 10 years (previously they were tax free within the Basic Rate Band and 25% for higher rate tax payers).

Should people only be allowed to become PM if they are Basic Rate tax payers? Should they give up their other income if they become PM?

I know for sure I wouldn't want to do the job for the £165k a year the PM gets paid.

To bring down the CoL, you have to tackle the massive slew of wealth towards the very rich, and the disproportionate power that the wealthy have in setting wages, tax and hoarding gains.

And ditto eating good, healthy foods without stressing about the cost.

But there aren’t many Rishis. Would taxing him and those in the same position more really achieve that?

Further taxing a handful of successful individuals isn't going to fix society.

You tackle wealth inequality by tax redistribution and by giving ordinary people the power to get higher wages (which will, by default lower the wealth of the Uber rich).

It’s bigger than tax rates.

There’s a connection between the cost of living crisis, the state of the economy and inequality.

I would rather encourage net contributors. People like Rishi could fix our economy if we had enough.

I’m tired of rich cheerleaders who’ve fallen for the line that them earning way way more at the expense of everything else is ok? And hasn’t been harmful.

It’s very much worth doing some reading on this and just educating yourself. Pointing at individuals doesn’t help because you miss the bigger picture.

It is no coincidence that countries with extremely high net worth individuals has problems with the cost of living. It won’t change until people clock that.

@Believeitornot it's ideological for you; not about how we actually fix the public finances

Er….. money is not infinite so that’s literally impossible.

Is that you Liz Truss?

I work in fiscal policy, with a degree in PPE and economics masters. But sure, I'll try to educate myself.

I’ve taken the time to research this. Shame I can’t say the same about others.