Proportional, progressive and regressive taxation cause a lot of questions. There are always opponents and supporters of a particular system. Today we have proportional taxation. More about it will be discussed in this article.
Proportional, progressive taxation: which is better
Which system is better for the state? We will try to make out. To do this, you need to know the features and nuances of the systems. This article will cover all of them. This will allow everyone to draw certain conclusions for themselves regarding which system is preferable.
Proportional taxation
Essence proportional system in that the tax base one for all. For example, the tax on personal income is 13% today. The percentage is not dependent on income. The director of a large retail chain with a salary of one million rubles a month will pay the same percentage as a loader in one of the stores with a minimum salary.
It seems unfair to many public figures and citizens. They believe that the more a citizen receives, the more he must pay. The proportional tax rate does not suit them. Must be progressive. Let’s figure out what it is.
Progressive taxation
So, proportional taxation provides a single percentage for all tax residents. The progressive system sets different interest rates, depending on the level of income.
For example, in some countries minimum income is not taxed. The average salary is taxed at the minimum rate, and huge profits, over 50%, are superimposed only on excess profits. This is in the countries of the so-called capitalist socialism. A striking example is Sweden.
Arguments of opponents of progressive taxation
So, what are the arguments of the opponents of the progressive system? Proportional tax system in their opinion, is fair. People must pay the same amount. The higher the income, the more taxes are paid to budgets from a particular resident. They cannot come to terms with the idea that successful people who make good money should pay a higher percentage.
Progressive Taxation Arguments
Proponents of a differentiated rate believe that a proportional tax system is ineffective, it enhances social inequality in society. Some people get richer all the time, while others, on the contrary, get poorer.
The progressive system provides the state’s social function in practice, smooths out differentiation in society. The authorities should help people with low wages. In practice, it happens that the minimum wage, which is already less than the subsistence level, is taxed. This is not the case in most developed countries of the world.
According to the Constitution, Russia is a social state, but in practice its social role is ineffective. Today, many deputies want to introduce a bill according to which people with minimal salaries will be exempted from personal income tax.
Formation of the tax base in Russia
The proportional tax system was finally formed in the late nineties - the beginning of the two thousandths of the last century. Prior to this, the number of various taxes and fees was 54. After the reform, they became 15. Then there was a single income tax of 13%. The authorities proudly reported that this is the lowest fee in Europe, so “it's time to get out of the shadows.”Those who claim that there have been a lot of taxes obviously forget their amount until 2000. However, the problem was not in quantity, but in quality. Nobody paid them. It was easy to hide from taxes, law enforcement agencies were unable to wage a tough fight with violators. In the 2000s, everything changed:
- Proportional taxation at low rates has been introduced.
- The role of law enforcement has increased.
- Stricter penalties for tax evasion.
These three factors put things in order in the fiscal industry.
The main idea, according to which the proportional system was introduced, is that it makes no sense to hide revenues, since the percentage does not depend on them. Some argue that, having introduced a progressive system, we, on the contrary, will receive less money in the budget, as various kinds of fraud will begin. Supporters do not think so, because such an argument allows you to sign the impotence of the state’s law enforcement system.
Regression system
The regressive system does not cause support in anyone in our country. Its essence is that the tax base is reduced from an increase in income. Such a system will further lead to social inequality in our country and create an explosive revolutionary situation.
Summary
So, we have examined what a proportional tax system is. This is a system in which all residents pay the same percentage regardless of income. The situation is different with a progressive and regressive system. In the first case, the higher the income, the higher the interest is charged, in the second, on the contrary, the higher the income, the lower the interest rate.
Do not forget that, despite the proportional tax system, elements of a progressive system are inherent in our country. This is manifested through social support: subsidies, compensation to low-income citizens. In addition, various tax deductions are applied to different categories. In addition, the tax system is not uniform; each activity has its own interest rate.
