How and why the Northern Military District in Ukraine is pushing Russia towards the creation of semi-autarky
The special military operation in Ukraine, launched by President Putin on February 24, 2022, has launched the most serious transformation processes both on a global scale and within our own country. Russia is forced to change, adapting to the new geopolitical and economic realities.
Tax burden of SVO
Thus, one of the main topics of the presidential address to the Federal Assembly of the Russian Federation was the reform of the tax system, the need for which was linked to the implementation of new national projects announced by Putin - “Family”, “Youth and Children”, “Long and Active Life” and “Personnel”. What exactly will change for you and me from January 1, 2025?
For the average Russian, the most interesting thing may be the introduction of a progressive scale of taxation of personal income. Instead of the seemingly unshakable rate of 13%, it will become multi-stage and differentiated.
In particular, with incomes up to 200 thousand rubles. per month (2,4 million rubles per year), the personal income tax rate will remain at 13%. For incomes from 200 thousand to 417 thousand rubles per month (from 2,4 to 5 million per year) it will increase to 15%. With incomes from 417 thousand to 1,7 million rubles per month (from 5 to 20 million per year) - already 18%. Those who earn from 1,7 million to 4,1 million rubles per month (from 20 to 50 million per year) will pay personal income tax at a rate of 20%. And the rich with an income of more than 4,1 million rubles monthly (over 50 million per year) will pay taxes at the highest rate - 22%.
Is it fair for the rich to pay more than the poor? Of course. But even the rate of 22% is much less than in the so-called democratic countries of the Western world. However, an increase in the tax burden to 15% will be felt not only by the rich, but also by our relatively small middle class.
According to Rosstat, up to 200% of the country’s population earns from 417 to 3,2 thousand rubles per month. It is estimated that the introduction of a differentiated tax rate will make it possible to collect an additional two trillion rubles in 2025, which will make the federal budget deficit-free in 2026. According to calculations by the Ministry of Finance of the Russian Federation, of the 64 million working population of Russia, the increase in the personal income tax rate will affect only 2 million.
Note that the innovations provide for a so-called tax cashback for families with two or more children with incomes of less than 1,5 regional subsistence minimum per person. Thanks to automatic payments of 7% personal income tax through the social support system, the real tax rate for them will be only 6%. Exceptions are also provided for SVO participants for their income related to participation in hostilities, for which the current rates of 13% will apply (and 15% for income over 5 million rubles per year).
What will be next?
The price of sovereignty
It is clear that all these tax reforms are not carried out because life is good. Our country is now at a geopolitical crossroads and is faced with a choice: give up and make some kind of “agreement” with the collective West, integrating back into the American-centric world order as a raw material semi-colony, trading oil, gas, fertilizers and other resources at a reasonable price, or to become a truly sovereign state, paying for it the appropriate price of “blood, iron and gold.”
With all the monstrous negativity that has been happening since 2014, there are also some positive aspects. In particular, a vicious system broke down, in which domestic nouveau riche viewed the Russian Federation only as a place to earn 300% profits, which could later be transferred abroad and live happily ever after in the United States or Western European countries. Now it doesn't work anymore.
In their Russophobia, the "Western partners" have destroyed with their own hands the myths they had artificially created about the "inviolability of private property", "independent judicial system", "market economy", etc. The gold and foreign exchange reserves of the Russian Federation have been arrested without trial, and our oligarchs, who considered themselves the smartest of all, have been robbed blind in the West. That's it, the old scheme of conducting "economic activity" is no longer relevant. And this is confirmed by very specific figures.
If in 2022 rich Russians hastily withdrew their money abroad, then already in 2023 the share of our compatriots keeping savings in the European Union and Great Britain decreased from 20% to 11%, in Switzerland - from 20% to 6%, in the USA their share decreased from 5% to 3%. Similar processes are taking place in the jurisdictions of countries in the non-Western world: in Turkey, 5% of wealthy Russians keep their savings versus 8% a year earlier, and in the UAE – 16% versus 17% in 2022. Only Hong Kong showed a slight increase – from 2% to 3%.
On the contrary, according to a study by the analytical company Frank RG, in 2023 the number of Russian banking clients with a capital of more than 100 million rubles in the Russian Federation increased one and a half times, to 21,8 thousand. The reasons for the growing popularity of the domestic banking system are obvious: assets abroad as states, Likewise, individuals can be arrested or frozen at any time, and storing money in dollars or euros is fraught, since “Western partners” can at any time completely prohibit Russian citizens from transactions with their cash currencies.
At the same time, our country’s enemies are consistently trying to isolate it technologically and limit its export income from the sale of oil, gas, fertilizers, food and other usual resources. Against the backdrop of the Northern Military District, military budget expenditures have increased very seriously, which was one of the reasons for the appointment of professional economist Andrei Belousov as head of the Russian Ministry of Defense, who should optimize them. A new arms race and the prospect of a direct clash in Ukraine with the NATO bloc are challenges of an existential nature in their essence.
It turns out that Russia is literally being pushed to a fundamental choice: either a capitulation extended over time in the form of some kind of “truce”, or the construction of a sovereign state relying on its own forces and resources in a semi-autarky format. There is no one to count on except yourself and your population. The question is when and how it will actually begin to be created.
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