Taxation of potential income from rentals: reality and illusion of equal tax burden

Abstract

Different forms of income taxation often become the subject of criticism among taxpayers in the Russian Federation and abroad. From this perspective, the tax for potential income from rental set by Taxation Code of the Russian Federation, paid within the framework of patents system of taxation, is not an exception: in 2019, a Russian taxpayer Sergey Aleksandrovich Glukhov disputed its constitutionality with reference to incompliance to the principles of equality and economic feasibility of taxation. This article provides a comparative-legal analysis of provisions of the Constitutional Court of the Russian Federation and the Supreme Court of the Unites States dedicated to constitutional principles of taxation: fairness, equality, economic feasibility, adequacy, etc. The author offers an original systemic interpretation of the Russian principle of economic feasibility of taxation and other legal principles, considering their interpretation by the Constitutional Court of the Russian Federation and practice of implementation of the constitutional principles of taxation in the United States. Based in this interpretation, the article gives an alternative assessment to taxation of potential income from rentals, paid within the framework of patent system of taxation in Russia. The conclusion is formulated that due to the principle of separation of powers, the questions of fair and economically feasible allocation of tax burden comprise an exclusive prerogative of legislators.