Tax Mechanisms for Smoothing Income Inequality

Abstract

The relevance of the work is due to the need to smooth out the existing income inequality in Russian society, which can be achieved through a revision of approaches to taxation of personal income. The subject of the study is the personal income tax (personal income tax) as a tool to reduce the level of social stratification and reduce income inequality. The purpose of the work is to determine the vector of personal income tax reform in terms of reducing the level of social stratification in modern Russian society and smoothing income inequality as one of the key areas of the implementation of the socio — economic development program of the state. The article assesses the effectiveness of the functioning of the current flat scale of taxation of income of the population. The proposal to introduce a progressive scale of personal income tax rates as a more effective tool for reducing the level of social stratification in society is substantiated. Proposals are formulated to establish the size of personal income tax rates depending on the income of taxpayers and the exclusion of certain types of investment tax deductions provided for the taxation of individuals. As a result of the research, the necessity of transition to a progressive scale of taxation is justified, which is considered as one of the effective tools that allow smoothing out inequality in income of the population and thereby achieving the goals laid down in national projects and programs of socio-economic development of the state.