Progressive scale implementation for personal income tax as a necessary condition for ensuring social justice

Abstract

The purpose of the study is to examine the role and importance of this tax when forming revenues of consolidated budgets of the constituent entities of the Russian Federation in the context of federal districts, and its impact on the formation of indicators characterizing the social sphere, as well as to analyze the positive foreign experience of personal income taxation. The general scientific methods of cognition (analysis, synthesis, generalization, grouping, comparison, tabular, etc.) were used. The study is based on official data of the Federal State Statistics Service and the Federal Tax Service of the Russian Federation. It has been established that personal income tax fulfills its fiscal function, and it is the main source of income of local budgets and regions. As for the social function, it is currently lost. It is reflected in the following: in four federal districts, where about half of the country’s population lives, wages are below the average Russian level; the coefficients of funds and Gini coefficient are not improving; deductions and benefits on personal income tax do not fulfill the social function, social justice is not ensured, and social stratification of society is increasing. In the context of the current unfavorable demographic situation and external challenges due to Western sanctions, it is necessary to strengthen motivation to work, considering foreign positive experience to introduce a real and workable progressive scale of personal income taxation.

Keywords

• budgets tax revenues
• cash income
• average monthly wage
• funds coefficient
• gini coefficient
• deductions for personal income tax
• share of population of working age
• progressive scale
• family income taxation