Taxation of Labor in Terms of Building a Social Market Economy

Abstract

Purpose The purpose of this paper is to reveal the features of non-conformity of labor taxation in modern Russia to the principles of social market economy and to develop the recommendations (measures) of improving labor taxation in terms of building a social market economy in Russia. Methodology In this study we apply the methods of system and problem analysis, synthesis, deduction, induction and formalization. The information and empirical background of research is modern (as of the end of 2017—beginning of 2018) statistical and analytical data of Federal State Statistics Service of Russia (Rosstat), the Institute of Social Sciences of the Russian Presidential Academy of the National Economy and Public Administration (RANEPA), the Government of the Russian Federation, and the United Nations Development Program. Results We revealed non-conformity of labor taxation in modern Russia to the principles of the social market economy, such as low public social guarantees in labor taxation and their complicated receipt, low level of social responsibility of employers and violation of labor taxation conditions, as well as poor contribution of labor taxation to establishing social justice. To improve labor taxation in modern Russia by bringing it into conformity with the principles of social market economy, we offered a complex of measures to overcome revealed unconformities: the expansion of public social guarantees within labor taxation and simplification of their receipt, tightening of administration of labor taxation and promotion of social responsibility of employers, as well as the introduction of a socially-oriented progressive taxation of labor. Recommendations We developed and advised a concept of labor taxation improvement in terms of building a social market economy for practical application in modern Russia.