Personal income tax: Reforms in Russia and their impact on the income inequality

Abstract

The article explores the problem of income inequality of the population in the con‑ text of the income taxation. Methodologically, the study relies on the theoretical proposi‑ tions of monetary inequality and individual income taxation. The research methods include structural-logical analysis, comparison, identification of cause-and-effect relationships, and data ranking. The author generalises about the methods for measuring the level of mone‑ tary inequality of incomes, determines their specifics and reliability. The paper presents the results of calculations of the income inequality level in the Russian Federation against the background of the configuration and stratification alternatives of income inequality in other countries. The researcher concludes that the level of income inequality in the Russian Fed‑ eration is higher than in the European countries and lower than in the BRICS countries; the gap between the richest one percent and the middle class in Russia is the largest in the world, while there is no extreme poverty. The analysis of the individual income taxation in the OECD countries reveals that the majority of the countries adopt a progressive scale with 2–19 schedules and non-taxable amounts. The paper proposes introducing in the Russian Federation a progressive personal income tax scale consisting of 4–6 schedules with a maximum rate of about 40 % for rich and super-rich taxpayers. Simultaneously, a standard tax deduction in the amount of at least two subsistence rates should be established. The findings of the study of‑ fer prospects for further reforming of income taxation in Russia to stimulate economic growth.