Balynin I.V. On introduction of a socially just progressive taxation on incomes of individuals in Russia

Abstract: The subject of the study is social and economic relations that have to do with taxation of individuals’ incomes. The article examines the scale of taxation of individuals’ incomes currently applied in Russia. The author gives a detailed analysis of the world’s experience in this issue through the examples of Austria, Germany and Luxemburg, of several peculiarities of the historic development of this sphere and of opinions of several economists, politicians and other experts. He also gives scientific substantiation of the suggested scale of taxation of individuals’ incomes. The author attaches special attention to the role of personal income tax in forming the income basis of regional budgets in the context of remaining risks of their poor balancing. The methodological basis of the author’s study are both general scientific methods (analysis, comparison, measurement) and special ones (economic, mathematical and statistic). The main conclusions of the study are as follows. More than 1/8of employees in Russia (12.8%) receive wages or salaries lower than 9,000 rubles (which approximately equals $ 176.5) per month, and it would be socially unjust to impose any incomes on them. For this purpose, amendments should be introduced in § 1 of Article 224 of the Revenue Code of the Russian Federation, in order to free this group of population from any taxations (through introducing a zero rate of interest for them). For individuals with wages or salaries not larger than 17,000 rubles (appr.$ 333) per month, a 10% incentive rate should be introduced. The novelty of the author’s approach is the suggestion of a scale of taxation of individuals that is based not only on the fiscal function, but on principles of social justice as well. The practical significance of the results of the study is the possibility for experts of governmental institutions to use them in making concrete decisions on modernization of social and economic processes, as well as for lecturers and students of secondary and higher educational institutions to use them in their academic activities.  

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