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Feb 17, 2021
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It’s time to shake up the Russian Forbes list and warn: “It is necessary to share”

In the photo: Vladimir Potanin, General Director and Co-owner of MMC Norilsk Nickel

In the photo: Vladimir Potanin, CEO and co-owner of MMC Norilsk Nickel (Photo: Mikhail Metzel / TASS)

The State Duma received a proposal to adopt a special law on personal taxes for a businessman Vladimir Potanin, who recently became the record holder of the Russian Forbes list, increasing his fortune to $ 30 billion. Back in April 2020, the publication estimated Potanin’s capital “only” at 19.7 billion. However, the growth of quotations of shares of Norilsk Nickel, which was not prevented even by last year’s environmental disaster, led to the growth of the billionaire’s fortune.

The authors of the initiative believe that a 50 percent tax should be introduced on the wealth of the oligarch, and the funds received should be directed to the construction of social housing and free gasification of the population.

In fact, a 50% tax for the rich is not out of the ordinary for developed countries. In Sweden, for example, the upper threshold of the personal income tax rate for wealthy citizens is 56.4%, and the lower one is 0%. In Belgium, Germany and Austria, the upper limit reaches 53.7%, 47.5% and 50%, respectively. In Russia, as you know, until recently, there was a uniform interest rate of 13% for both the poor and the super-rich Russians. From this year alone, personal income tax has been increased by 2% for those who earn over 5 million rubles a year.

Meanwhile, it would be possible to introduce an increased tax not only for Vladimir Potanin. The Forbes list of billionaires last year included 90 Russian citizens. The leader was the head of Norilsk Nickel, which took 41st place in the global rating. Also among the billionaires were the chairman of the board of directors of NLMK Vladimir Lisin ($ 18.1 billion), Chairman of the Management Board, PAO NOVATEK Leonid Mikhelson ($ 17.1 billion), Chairman of the Board of Directors of PJSC Severstal Alexey Mordashov ($ 16.8 billion), President of Oil Company LUKOIL Vagit Alekperov ($ 15.2 billion), member of the Boards of Directors of NOVATEK and Sibur Gennady Timchenko ($ 14.4 billion), the main shareholder of USM Holdings Alisher Usmanov ($ 13.4 billion), co-owner of LetterOne Holdings and Alfa Group Mikhail Fridman ($ 13 billion) and others.

Economist, member of the Stolypin club Vladislav Zhukovsky believes that the problem of inequality in Russia cannot be solved by additional taxes on an individual businessman, it is necessary to take a comprehensive approach to the issue from introducing a progressive taxation scale to revising the results of loans-for-shares auctions, but the current government is unlikely to do this.

– This proposal looks not systemic, superficial and populist. It is obvious that there is social injustice in Russia and a colossal gap between rich and poor, which has only been growing for 30 years. Over the past seven years, real incomes of the population have been falling, officially they have decreased by 11%, but in fact – more than twice. Half of the country’s population has per capita incomes below 15 thousand rubles a month, and 70% – below 25-26 thousand rubles. People are well aware that there is a certain ruling vertical, the so-called offshore elite, which today controls the lion’s share of the national wealth and income.

Let me remind you that in Russia 1% of the richest citizens control 60% of the national wealth, and 3% of the richest Russians own 90% of all financial assets of the country – these are cash and non-cash money, deposits, bank deposits, stocks and securities.

It is clear that Potanin is now acting as a collective lightning rod, and there is a reason. The environmental disaster in Norilsk, when 20 thousand tons of diesel fuel spilled out of a rotten tank, destroyed the entire surrounding flora and fauna, poisoned dozens of rivers and land, causing damage to 146 billion rubles, creates the necessary background. It would be very convenient for certain representatives of the presidential administration and big business to make Potanin extreme in everything within the framework of the intraspecific struggle.

Moreover, he is one of the most famous and odious representatives of the oligarchy. In the 90s, he was Deputy Prime Minister, he was also one of the initiators of the so-called loans-for-shares auctions, which, from my point of view, are illegal, deeply vicious and even criminal. By and large, it was a mechanism by which Boris Yeltsin paid off big business and the nascent oligarchy for supporting him in the 1996 elections and preventing him from making a patriotic turn and curtailing liberal reforms.

In the course of loans-for-shares auctions, the state temporarily placed its money in private banks, and then itself borrowed the same money from banks on the security of securities of major enterprises such as Norilsk Nickel, Yukos, Yuganskneftegaz, Sibneft, Lukoil, and so on. After that, it simply did not return this loan, without even laying this money in the budget for 1996-1997, and all the securities came under the control of big business and all these billionaires from the Forbes list.

“SP”: – So, taxes for Potanin will not be raised?

– Potanin is undoubtedly a symbolic figure, this is a sacred cow for the big capital and oligarchy born in Russia. The desire to blow off steam on it and arrange a demonstrative whipping in order to imitate the struggle with oligarchs and offshore companies is quite understandable. Therefore, I even admit that some kind of personal sanctions may be imposed against Potanin. We’ve already seen tough rhetoric Valentina Matvienko With regard to Potanin, although it is justified, it is clear that it was necessary to repair the tanks, which had completely rotted in 30 years. It is absurd that of the $ 5-7 billion in dividends that Norilsk Nickel pays annually, no funds were found to repair the tanks. However, this problem needs to be approached more comprehensively.

“SP”: – How exactly?

– It is necessary not only to talk about additional taxes on Potanin, but to raise the issue in general about credit-mortgage auctions, which became the looting of the country and the alienation of property created by the labor of several generations of the people. It is necessary to raise the question of revising the results of auctions and shop privatization of large pieces of state property that were seized by Yeltsin’s entourage.

It is necessary to raise the question of a normal progressive taxation scale. Progressive personal income tax was in Soviet times, it is in China, Canada, the States, Australia, Japan, Norway, Sweden, France, and almost all developed countries. But in Russia it is not, because, as they explain to us, rich people are too smart and will not pay this money. When such things are voiced by the President of Russia Putin, the Prime Minister Mishustin and finance minister Siluanov, we see that they are on the side of representatives of big business, exporters of raw materials and the oligarchy, and not on the side of the people. All over the world, for some reason, they solve the problem that the rich should pay more, but in Russia they cannot.

It is necessary to introduce a full-fledged progressive scale of personal income tax, and not a flawed 15% for incomes over 5 million, increase to 20% -50%, even up to 60% for incomes over half a billion to a billion rubles. It is also necessary to increase taxes on the export of capital from the country in the form of dividend payments. According to the estimates of the Accounts Chamber, last year, out of almost three trillion in dividend payments, more than 1.2 trillion were transferred to Cyprus, 700 billion to Luxembourg and Holland.

That is, we have taxes on the payroll for an ordinary worker, teacher or farmer, 13% of personal income tax, 30% of insurance premiums, and on top of another 20% VAT, that is, more than 60%. If you pay dividends to yourself somewhere, you pay only tax on dividends, and there are no insurance premiums, contributions to the Pension Fund of Russia and, moreover, there is no VAT from above.

We need a comprehensive fight against inequality and the redistribution of national wealth. Today, no more than 34% of GDP is redistributed through the budget system. This is very small, despite the fact that most of it is just oil and gas revenues. In the same Scandinavian countries, up to 60% of GDP is redistributed through the budget. This money is channeled from export-oriented industries in favor of the majority of citizens, science, education, and culture. Therefore, in Finland the pension is 1,800 euros and more, while we have 200 euros, and even then not everyone has it.

Now all sorts of parties that wake up only before elections to the State Duma or regional parliaments and which are supposed to split the protest on the left-wing patriotic flank will engage in this kind of populist initiatives. But this power will not raise the issue of a real fight against offshores and oligarchs and changes in economic policy systematically.

From my point of view, it serves the interests of those who in the 90s and 2000s grabbed hold of property and assets and over the past years have consolidated their position in society. These are the people who accept anti-social reforms like raising the retirement age and confiscating pension savings, new excise taxes, the shock devaluation of the ruble, and so on.

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