Individual income tax: New opportunities for management

Abstract

The paper discusses the issues of individual income tax due to the effective implementation of its fiscal and social functions. An urgent need for resolving problems of the budget and tax systems in many countries and stimulating economic growth in the absence of unified methodological approaches necessitates developing new areas of public administration of income tax on individuals. The methodological framework includes public administration theory and the theory of taxation. The study reviews the special features of income taxation of population in Russia and abroad and analyses the contribution of the tax to the government budget. We demonstrate that the social role of income tax on individuals is increasing while its fiscal function is declining. With a view to improving social equity, there is a strong need for the progressive tax system characterized by growing marginal tax rates. The authors propose a mechanism for organizing taxation of individual income based on fundamental mathematical principles and demonstrating the probability of meeting the needs of all parties of the taxation process. Theoretical and practical relevance of the research is that the article justifies the necessity of employing a modified approach to manage income taxation on individuals.

Keywords

• public administration
• tax policy
• income taxation of population
• social function
• tax management