The introduction of a stricter progressive personal income tax scale would allow the redistribution of funds from the rich to the poor and reduce inequality, but could have a negative impact on household consumption and Russia’s overall GDP. This is the main result researchIt is carried out by experts from the Russian Academy of National Economy and Public Administration (RANEPA).
In a paper published in the Journal of Finance of the Research Institute of Financial Sciences of the Ministry of Finance, researchers Elizaveta Martyanova and Andrey Polbin modeled various options for tax reform and evaluated their consequences on macroeconomic indicators using a general equilibrium model. The main condition for comparison was the tax conditions of 2019-2020 with a flat personal income tax rate of 13%.
According to calculations, scenarios of increase in income tax collection (personal income tax rates are maintained at 20-25% for income over 30, 50 or 70 thousand rubles per month, and 13% for low salaries) lead to a long-term decrease in GDP by 0% per year compared to the basic option It increased by .3-1.3. This is because incentives to work among high-wage workers have weakened due to the increasing tax burden.
Even in cases where the introduction of increased personal income tax is not accompanied by an increase in budget revenues (due to the simultaneous decrease in low wage rates), the negative impact on GDP will be 0.2-0.6% per year due to multifaceted changes. In work motivation for different groups of the population.
At the same time, according to scientists, modeling results are sensitive to a number of assumptions, especially the degree of elasticity of labor supply. If the decline in tax rates is not offset by the increase in working hours, the decline in GDP may be less significant.
In addition to its direct impact on production, experts say advancing a personal income tax could increase the level of trust in society, reduce inequality and control costs. Wealthy citizens will focus less on luxury consumption and imports.
Increasing the personal income tax rate from 13% to 15% for income over 5 million rubles, according to estimates of the Federal Tax Service. The annual epidemic, introduced in 2021, affected approximately 1% of the working population. In February 2024, President Vladimir Putin announced that the financial system must be further modernized for a more equitable distribution of the tax burden.
Before that, the Federal Tax Service reported: to wait a sharp increase in wages due to increased personal income tax on the rich.
Putin before signed Law on tax deductions for long-term savings.