Georgy Malinetsky We should live better About radical tax reforms 12/25/2022, 08:08

I’ll start with the civil service. I often ask the students I teach: Who is Russia’s main enemy? I hear a variety of answers, from aliens and climate change to insidious countries that are constantly “disrupting” our Motherland. Then, I usually quote: “Technological backwardness means dependency, the country’s security and economic opportunities are diminished. That’s exactly how it is, not the other way around… And the question isn’t whether someone will come and take over our land and ruin it. No, that’s not the point. The main threat is delay, this is our enemy. If we do not reverse the situation, it will inevitably intensify.” I wonder who is the author of this statement in the students’ opinion. And here the answers are different – from “this is foul off limits” to “of course this was said by a foreign agent”. Apparently, the humanities are hardly taught here …

This is part of the President’s Address to the Bundestag dated 03/01/2018. If the obligations contained in this document were fully implemented, we would now be living in a different reality.

So it’s time to talk about backwardness. Our government is made up of incredibly talented people who have accomplished everything from ballet training and wildlife conservation to space and shipbuilding. But the main things do not happen too much. Six centuries before our era, Sun Tzu said: “Strategy without tactics is the slowest path to victory. Tactics without strategy is arrogance before defeat.”

Keeping the strategy in mind, how to overcome the backwardness of our civilization – the world of Russia? There are two main factors – the reproduction and well-being of the population. Reproduction (not even growth!) requires an average of 2.1 children per woman. Now we have 1.5 and at the time of reforms it was 1.13. We get smaller as we get smaller… The second factor reflects our place in the world in terms of gross domestic product (GDP) production per capita. We’re at 86th place here, which is odd for a country with 1/3 of the world’s mineral resources. The first factor is linked to the second factor. When young people are asked why they don’t get married and don’t want to have children, they increasingly answer that they don’t want to raise poor people.

What is the problem? in the business system. In France, which is known for its high taxes in Europe, an entrepreneur has to pay 39 cents in tax for every euro. Ours is cooler: for each ruble – 79 kopecks. For the development of the high technology sector of the economy, it is necessary to give loans at the rate of 3-4% per annum to the relevant enterprises. Such rates have never been seen or heard of in our country. It looks like we have an excellent opportunity to develop the domestic market with the current sanctions. We will sell what we produce to our people. But he doesn’t have the money to buy them all. Small wages create small demand.

So, this money should appear! At the same time, it is desirable without revolutionary changes. There is a way. Several investigative groups have proposed this and reported their approach to State Duma deputies. It is necessary to change the tax system and get rid of the value added tax (VAT).

To do this, it is necessary to abolish the tax on the property of enterprises and citizens (1.1 trillion rubles), VAT (≈10 trillion), collection of medical and pension funds (≈7 trillion). The government is forcing us to use the remaining 18 trillion in businesses to increase wages.

Instead, a single general excise tax is introduced, which would give 32-34 trillion, without any privileges for the rich.

The created model provides 10% (≈22-23 trillion) from each consumer of goods and services, 1% (≈3 trillion) from securities and rights purchases in the securities markets, and 30% (-10) for each ruble transferred abroad. trillion) .

These measures will double the main items of financing social benefits. In particular, this is an increase in the average pension from 15 thousand rubles to 25-30 thousand for people with maximum experience, soldiers and mothers with up to 50-60 thousand children, payments to all children from the fact of pregnancy to 17. age, not less than the minimum consumer basket ( prices for 2019 – 12,300 rubles); 25-30% increase in health and education financing.

And these are not all advantages. Such measures will sharply reduce corruption, make the tax system simpler and free millions of people for normal productive labor and creativity. At the same time, such a tax will be charged constantly and daily with each purchase.

The abolition of VAT has many benefits. In Russia, 17 million tons of products worth about 1.6 trillion rubles are thrown into landfills every year. According to the Agency for Strategic Initiatives (ASI), the capacity of landfills in Russia will last three to five years if the amount of food waste is not reduced. Food waste takes up one-third of landfills. Their share in solid municipal waste is up to 30%. It is typically used for the production of processed food, animal feed and fertilizer, as well as to create biogas.

In many European countries (Spain, Italy, France, Great Britain, Czech Republic) the processing of food waste is very strictly regulated. And do we have? “When buying goods, we immediately add VAT, accept it for deduction, then if the goods are sold, the buyer pays this VAT. If the goods are not sold, but deducted, we do not need to pay VAT. And if we donate to charities, we have to pay this VAT as if we had sold this product,” the traders explain. And so, we live as if this 1.6 trillion is useless to us.

Experts from the Financial University under the Government of the Russian Federation also insist on the abolition of VAT and a change in the tax system, which will solve the “free rider problem” – tax evasion by a significant part of the population. There is no objection to the abolition of VAT but … nothing is done. Maybe it’s time to move from imitation to reality, from words to actions.

Historians sometimes say that Russia often won wars and lost the peace. It is worth making an effort today in order not to lose the world and not to miss the historical time. In the said Message, the main strategic task is to improve the quality and life expectancy of Russian citizens. Looks like it’s time to get down to business and this post is worth re-reading, not just for the students I’ve dealt with.

The author expresses his personal opinion, which may not coincide with the editors’ position.