For persons who are payers of compulsory deductions to the budget, a proportional, regressive, progressive tax may be established. This division is based on the relationship between the rate and the object of taxation.
Progressive tax is a deduction, the rate on which increases during the increase in the object of taxation. With its use, the burden is more on rich people. With a proportional system, the rate remains unchanged. It does not depend on the size of the object of taxation. Progressive and proportional tax, thus, are opposite to each other. Many economists are opposed to the unified rate for individuals introduced in the Russian Federation.
Progressive tax in Russia
The Government of the Russian Federation does not plan to introduce this system. At the state level, the preservation of the rate of 13% is considered optimal. This was in one of his reports, said Dmitry Medvedev. The idea of introducing progressive income tax in the country was discussed, but was not supported. In the coming years, as the prime minister said, the system of taxation of natural persons will not be revised. This position was supported also by the president of the country. The current scale of personal income tax has been introduced since 2000. According to Ivan Soloviev, an expert at the Institute of Legislation and Comparative Law, such a system ensures the optimal collection of contributions. In particular, in 2010, the budget received 1789.6 billion rubles. from personal income tax, in 2013 - 2497.8 billion. In addition, as the expert notes, the share of income tax in the total amount of budget revenues from taxation is also increasing. So, in 2010 it was 39%, and in 2013 - it is already 41.9%. In addition, the current system for the payment of personal income tax almost completely eliminated the practice of "gray wages." In confirming the correctness of the choice, experts say that the world does not welcome the breakdown of effective schemes of budgetary allocations. This is due to the fact that any changes can destroy the formed model, and significantly reduce the trust of taxpayers. Dmitry Medvedev, nevertheless speaking that in the near future the system will not be revised, did not rule out that the Government can return to the discussion of the issue in 5-7 years. Experts themselves say that now is not exactly the right time for discussions on the problem.
Progressive income tax actually entered into practice as a result of class struggle. Agrarians and representatives of the working class had a special impact on its implementation. Confrontation that lasted for many decades, in which one or the other side won, numerous attempts to reform the existing taxation systems, a set of social and economic factors, in the end, produced the desired result. Progressive taxation, thus, was realized in practice in the form of income tax.
Using the system by different countries
Simple bit-stream system
It is considered the simplest form in which a progressive tax can be charged. In this model, the tax base is divided into categories. Each of them corresponds to the highest and lowest levels of income. A fixed amount of deductions is also established for a given category. Such a system was used in many countries at the initial stage of the introduction of income tax.
Relative Bitwise Schema
Here, too, division into categories is used. For each level, its own interest rate is provided. In the category, a proportional scheme is maintained. When you move to the next level, a jump in the amount occurs. When using such a model, there may be a situation where a payer with a large income will have fewer funds than those with lower incomes.
In this model, only one bet is used. Together with this, a limit is introduced, below which income is not subject to taxation. The above accrual is charged regardless of the subsequent growth. The rate itself is not progressive and fixed. However, taking into account the limit, there is a real increase with an increase in income.
With such a system, the payer's income is divided into parts. Each stage is characterized by its own firm rate. The increase occurs with an increase in taxable income at each step. Their number can be minimal (two - in Poland) or maximum (18 - in Luxembourg). As a feature in such a system is that the tax rate is not imputed to all income, but to the part that exceeded the boundary of one or another step. As a result, the sum of all deductions for each level will be presented for payment.
Pros and cons of the multi-stage model
The merits include:
- Visibility - the entire system can be represented as a simple table.
- Simplicity - any payer can independently calculate.
- Flexibility - in each step separately, for each subject you can change the bid.
- Indexing of non-taxable income (if it is present).
Among the shortcomings it is worth noting:
- Great difficulty in comparison with the proportional system.
- In the case of indexation of income, including not subject to taxation, it is necessary to raise rates or expand the limits of steps.
In this case, the rate rises without jumps. Due to its uniform increase, the base becomes larger too smoothly. Usually in a linear multistage system, the maximum rate exceeds the initial rate by several times. This is due to the fact that increasing the effective base within low incomes is much slower than using a single-stage taxation model.