The tax system of any country is created in order to replenish the state budget funds in a timely manner. In order to increase the efficiency of the receipt of money, as well as to redistribute tax burden Between different segments of the population, legislators have developed a progressive system of charging payments. This model was applied in practice until 2000 and was subsequently canceled due to changes in the economic course.
What is interesting about progressive taxation?
In order to understand what a progressive tax is, you need to understand in more detail the mechanism of its accrual. This method is characterized by an increase in the tax rate as income rises. In other words, the higher the income, the more tax payments you need to transfer to the budget.
The economy uses two types of progressions: simple, which increases the tax rate as the tax base grows, and complex, where income is divided into parts, each of which has its own rate. Moreover, in the second option, progressive tax is levied on only that part of the income that goes beyond the established limit. The total payment amount is determined by adding up all the charges.
What tax was charged according to the progressive method
In Russia, this method was applied to personal income tax. Progressive income tax was charged at several interest rates. If a total income exceeding certain digital values, then an increased rate was applied to it.
This method of calculating tax payments was of strategic importance. Due to the fact that wealthy citizens paid a higher tax, there was a fair equalization between the layers of the population. In addition, the state received an additional influx of funds into the budget.
In what form can a progressive tax be returned
Due to the fact that recently the legislators quite often raise the issue of progressive taxation, it is likely that the system will return to our country.
Modern economic development dictates its own rules, so the application of the old model may not bring the desired effect. Legislators have developed a new multi-stage tax calculation method, which is based on a progressive tax scale, limited by certain standards. For citizens who have received income up to 60 thousand rubles, it is proposed to use the rate of 5%. About 13% of the working population belongs to this category of people. The next income bar is limited to 600 thousand rubles. Within this limit, it is proposed to use a 15% rate. This category includes the bulk of people (45%). Taxpayers with an income of more than 600 thousand rubles will be required to pay tax at a maximum rate of 25%.
The new bill is being finalized, since its exceptional effectiveness has not yet been proven. In addition, as a result of the calculations, it was found that such a system would require large investments for its implementation, and during the post-crisis recovery period such expenses are not entirely appropriate.
Differential rate progressive tax system
In alternative progressive tax system It is proposed to take as a basis the cost of purchased goods. In this case, the definition of "progressive tax" includes such definitions as VAT and sales tax. The essence of the differentiated system is to exempt essential goods from taxation, and to introduce a higher tax on luxury goods.The idea is to redistribute the tax burden between different sections of the population.
Regressive, proportional, progressive taxes - which is more profitable?
If we conduct a parallel comparison of the most popular taxation models, we can see that all systems have a right to exist, but in a certain economic period. The efficiency of using all models is obvious, since any system brings additional income to the budget.
When using one or another model, the taxpayer is stimulated to achieve a specific goal. For example, a progressive tax is aimed at eliminating social inequality, while a regressive one is aimed at legalizing income. In turn, proportional taxation guarantees the stability of payments.
The negative sides of the progressive method
Along with positive characteristics, the progressive method has a number of negative aspects. The most significant minus should be considered the fact that with an increase in the amount of tax due to the growth of the tax base, there is a massive concealment of real payments. It becomes unprofitable for employees to get a lot, therefore, by agreement with the employer, a decision is made to hide the “white” wages. In addition, the country may increase unemployment.
Analyzing progressive taxation method it can be concluded that such a system is capable, on the one hand, of providing good income to the treasury, and on the other, of provoking the departure of part of the income to the shadow side.
New taxation models may become the most acceptable for our economy and will help to satisfy the interests of the state and working citizens. At present, flat taxation is the most acceptable.
