Improvement of the Taxation System and its Theoretical Justification

Abstract

Taxes are one of the main levers of government influence on a national economy and, at the same time, the most important tool for replenishing the governmental budget. These considerations justify the enormous importance of the objective, correct and harmonious construction of a given taxation system, without which the effective functioning and sustainable development of the national economic complex of the country is inconceivable. Currently, the tax system in Russia is undergoing certain changes, especially in terms of direct taxation of income of individuals, which require a comparison of the decisions made with regard to the theoretical provisions of tax optimization. Consequently, the theoretical study of applicable and potentially available tax instruments in the current period is of particular relevance. The author's study of the theory of welfare economics as a basis for seeking and making practical solutions in the formation and improvement of the national tax system is a monographic study of the works of foreign authors and the interpretation of their results concerning the realities of Russian tax policy to substantiate the changes made to the latter or to refute the feasibility of them. In achieving this objective, the methods of scientific analysis were used: dialectic analysis and synthesis. The study is based on the review of relevant scientific and periodic economic literature. The authors conclude that the simultaneous application of direct and indirect taxes is advisable, provided that the determination of the mechanisms for their use is based on different principles barizing out of the theory of welfare economics. The authors indicate that the taxation of income of individuals is the one direct tax, the application of which is often based not only on considerations of economic efficiency, but also on political and sociological motives, in particular, the concept of justice, which, by definition, is subjective and differs among different social groups and political parties. Nevertheless, the authors emphasize the mandatory nature of the non-linear taxation of income of individuals from both economic and political positions. The paper also concludes that it is permissible to use indirect taxation, in particular, in the form of a value added tax. However, in the case of the value added tax, in contrast to the income tax, the preference for applying the same tax rates and avoiding the use of exemptions from the tax base is justified.