Theoretical foundations of building a system of taxation of the population

Introduction

In the modern world, taxes on income, property and expenses levied on citizens in direct and indirect forms cannot be considered as fiscal instruments that provide income only for the state. Although these taxes perform their fiscal functions, they must simultaneously meet the requirements of social justice. Income taxes and wealth taxes should be considered from the point of view of the social aspect in addition to their fiscal aspects, and in some situations it should be noted the mandatory use of taxes on wealth and expenses based on the principles of establishing a welfare state ^[1].

The tax determinant has a direct impact on the life of a particular individual and the formation of society as a whole, which is why the formation of an integral system of taxation of the population is an essential element of the entire tax system of the country.

The theoretical genesis of the taxation system of the population

According to the Great Russian Encyclopedic Dictionary, the system is a set of elements that are in relationships and connections with each other, which forms a certain integrity, unity ^[2]. In the economic literature, the concept of a system is usually associated with taxation in general, characterizing the tax system in the national aspect. There are an extremely limited number of studies that give an essential idea of the taxation system of the population. Most scientists either consider as a preferential tax on the income of individuals and entrepreneurship (Izotova O.A., Fironova V.P., Khoroshunova A.S., Maslov A.A., Yumaev M.M., Zhverantseva M.S., Volokhov S.P.), naming it as an independent income tax system (Shlyankevich S.V.), or a simple set taxes levied from the population (Tyurina Yu.G.).

A.-V.B. Bamataliev noted that the system of taxation is formed by the coordination of the economy and its profitability as the basic conditions and foundations of the taxation process, focused on budgetary needs ^[3].

Zakharova A.V. defined taxes from the population as a special subsystem within the unified tax system of the state, including income, property and other taxes and fees for which individuals are payers by law, as well as direct and indirect taxes that are transferred from legal entities to taxpayers-citizens in the process of consumption of goods and services ^[4]. Totikova T.E. adheres to a similar position, which includes unified taxes in this system, recognizing them as income taxes in fact ^[5]. The presented approach demonstrates the relationship between income, property and taxation of consumption, but at the same time does not take into account the internal unity of the structure of taxes included in a single system.

In this aspect, the approach of Lobanova E.V. is more impressive, which considers an interconnected system of taxes levied on individuals based on their essence, functions, principles, forms and methods of collection. The author considers all elements of taxes taking into account the unity of their economic essence, principles and mechanisms of collection within the framework of the requirements for the taxation system of individuals as a whole ^[6]. However, the interpretation of the tax system of individuals by Lobanova E.V. is very narrow and does not take into account all the functional specifics of taxes: "The tax system of individuals is an integral part of the totality of taxes established by the state, as well as the forms and methods of their collection from citizens." In later studies, Shmeleva Yu.D. the system of taxation of the population was expanded to social payments ^[7].

It is necessary to pay attention to such an important aspect as the affiliation of the taxation system of individuals. Unlike the classical tax system, of which it is a part, the system of taxation of the population is an important structural element of the social structure of Russia, and therefore it has a dual character and corresponding features of construction. As M.V. Chernyshova notes, the social structure of society is an objectively determined stratification, division into large and small groups and communities of its members, differing in a special status and position in the system of internal and external social relations ^[8]. Moreover, these relationships are not limited only to social aspects, according to the formed opinion of scientists, they are determined by political, cultural, and what is important for this study, economic framework. Moreover, in any structure of modern society, its economic structure, class division, which is one of the cornerstones in the implementation of fair taxation, is most clearly manifested. The nature of the relations within the social structure directly affects the formation of the taxation system of individuals (Figure 1).

Source: compiled by the author.

Figure 1 – Factors affecting the taxation of individuals

Principles of building a system of taxation of individuals

To form the author's comprehensive approach to the interpretation of the taxation system of individuals, it is necessary to determine its theoretical basis – the principles laid down for the construction of such a system. The positions of scientists in this aspect are heterogeneous, but most of them are built on the classical principles of Adam Smith (A study on the nature and causes of the wealth of nations, 1776), postulating the general foundations of the formation of the tax system. It is important to note that the historical factor determined the orientation of Smith's principles, first of all, on the population, which is due to the structural composition of the categories of taxpayers of the 18th century.  These basic principles have been described as follows:

1. Each taxpayer must contribute to the state's income to the same extent (the principle of fairness). This principle is the most controversial, since its literal interpretation does not indicate a priority choice between progressive or proportional forms of taxation. It is noted in the economic literature that Adam Smith himself was a supporter of a fixed (proportional) tax. On the other hand, the principle of fairness does not deny the possible diversification of the tax rate.

2. Each taxpayer must be sure how much taxes he will have to pay (the principle of certainty). According to Adam Smith, this rule is of great importance in building a rational tax system. The tax security of citizens is largely at the heart of democratic life and the state system. He pointed to certainty as one of the most important features of the tax system. Confidence in how much taxes should be paid often determines the general state and assessment of the tax system, contributes to building competent tax relations between the state and the population. Adam Smith insisted that the government should know in advance the amount of revenue it can collect and the time in which it can mobilize these revenues. As for taxpayers, their clear understanding of the amount of tax, the timing and methods of its payment of tax brings people confidence in their obligations, contributes to the planning of their expenses and the awareness of taxpayers that tax is an objective necessity, not a fine. It is for this reason that the principle of certainty should be perceived as one of the dominant ones in the formation of an optimal system of taxation of individuals.

3. Each tax must be collected at the time and in the order that is most suitable for the taxpayer (the principle of convenience). Adam Smith shows that the implementation of the convenience principle is extremely important for all participants in tax relations: for the taxpayer who will be able to pay taxes on time and in the most convenient way, for tax authorities who are able to collect taxes on time. For example, sales tax (value added tax and other forms of indirect taxes) paid on any product is included in the price, and the consumer does not feel when he pays the tax (although he is a carrier, not a payer of the tax). At the same time, the government is able to effectively collect the tax without any possibility of evading its payment. The third principle, formed by A. Smith, makes effective tax administration an integral element of the taxation system of individuals, ensuring state control over tax discipline and budget filling.

4. Each tax must be returned to the company in a value similar to the value of the tax levied on the company (the principle of economy). The ideal situation would be in which the same amount that was collected is returned to the company, but this would mean no administrative costs for collecting tax payments, which seems impossible. At the same time, the lower the administrative costs of the state, the better for the tax system. The fourth of Smith's canons can be interpreted as underlying the emphasis that many economists place on a tax system that does not interfere with market decision-making, as well as on the more obvious need to avoid excessive complexity of its construction and corruption. This principle is an administrative "fairway", because it is the lack of tax savings that is one of the main reasons for refusing to establish new taxes (usually socially expedient, but economically inefficient) levied from the population. It is no coincidence that since 1999 there has been a systematic reduction in the number of fiscal payments in the Russian Federation (including the abolition of inheritance or gift tax, sales tax, tax on the maintenance of housing stock and objects of the socio-cultural sphere, the experiment on the introduction of a single real estate tax).

The principles mentioned above are classics of tax science and "axioms" of tax policy of any state. Despite the fact that they were introduced in 1776, they are still very important because they represent the foundations of any effective tax system. Nevertheless, taking into account the complex nature of economic relations, the development of technology and technology, structural changes in society, we consider it necessary to expand the composition of the principles of building a system of taxation of individuals. A review of the literature on the subject under consideration allowed us to identify several new approaches to building an effective taxation system.

Unlike A. Smith, the German economist A. Wagner proceeded from the theory of collective needs, having formulated 4 groups of principles into which nine taxation rules are combined (Table 1).

Table 1 – Principles of taxation by A. Wagner