TAXATION

Topics: Tax, Income tax, Progressive tax Pages: 3 (779 words) Published: January 12, 2015


Finance University under the Government of the Russian Federation International Finance Faculty

"Taxation"

Essay on the topic:
“Explanation of a tax principle that every taxpayer has to contribute to the state income to the same extent”

Made by:
Belousova A., Karlova M.,
Omarov A., Konotopov. M.
IFF 3-2

Moscow
2014
Due to the tax principle that every taxpayer has to contribute to the state income to the same extent, we can consider that there are several interpretations of this idea. First of all, it can be understood as a “flat tax”, and what does that mean? A long-standing debate on the fairest method of applying federal income tax has surrounded the question of a flat tax. So it is a percentage charge applied equally to everyone, regardless of their income level, investments, or other financial characteristics. In other words a flat tax is a single rate that just simply spans all income brackets of taxpayers, rather than the “progressive” system, which taxes higher-income individuals at increased rates and includes numerous deductions and exemptions. On one hand, we suggest that a simplified flat tax on income would not mainly be fairer but save the government a considerable amount of money in bureaucratic fees. As it is, the Internal Revenue Service spends a lot of time and money investigating the proper filing of taxes, including exemptions or "write offs", in case of progressive tax system. Coincidentally, this proposed flat income tax is often paired with legislation that would eliminate tax exemptions, but these need not be linked. Proponents point out that much of the generated tax revenue is spent maintaining the tax system itself. Such an approach of paying taxes to the state income to the same extent in the meaning of “flat tax” is applied in Russia nowadays. Russia's 13% income tax is one of the world's lowest. But there are political parties, such as “Fair Russia” or “KPRF” which are for applying...
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