Per last week's FT:
... private shareholders now own just 9.6 per cent of the UK’s listed companies – the lowest level since the privatisations of the 1980s.
In the grander scheme of things, of course, it doesn't matter who owns the big companies (as long as they're not nationalised!), but the demise of the small shareholder is usually - and probably rightly - seen as A Bad Thing. Why? Because small shareholders are more likely to be in it for the long term and be prepared to kick up a stink at AGMs, as opposed to hedge funds etc who are in it for a quick buck* or pension funds and other 'institutions' who are in cahoots with the Board Of Directors and are happy to nod through their bonuses and turn a blind eye to underperformance.
As I have said before, this is easily fixed.
* Not that there's anything wrong with making a quick buck, but it often seems to go in tandem with dodgy accounting, insider knowledge etc.
A simple solution
3 hours ago
3 comments:
Perhaps surprisingly considering I make a living (sort of) from being a financial adviser I have long advocated the removal of all the tax breaks and schemes for the likes of pensions, PEPs/ISA, insurance fuds, EIS, etc etc. It's all bollocks and distorts sensible capital allocation. People make decisions based on tax regime rather than investment quality, which is bonkers. And now and especially as Gordon has broken the social contract that pensions are deferred pay and should not be taxed until the pay is paid the argument for tax relief on pensions is weak. People need to think
'capital'; "How do I acquire capital?". This'll make them think more about the tax they pay and might be good for freedom. (That's enough I'm boring myself now)
...having posted that I should point out that I am pro Unit Trusts, OEICS, Investment Trusts etc because they permit diversification and the use of passive and index investing, which serves most small savers well. Plus they are about as close to the market as you can get and the tax due is in the hands of the unit holder.
Lola, totally agreed on scrapping/reducing pension breaks, EIS and so on.
The obvious use of the extra revenues (besides cutting taxes generally) should be getting rid of CGT, higher rate tax on dividends and Stamp Duty, and maybe taxing interest income at a flat 20% (part of the nominal return is just inflation), which would level up the playing field enormously.
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