Methods of taxation

The concept of taxes and fees is reduced to the fact that they are the main sources of the formation of all state funds - budget revenues. That is why taxes are directly related to the activities of the entire state and depend on the level of its development at a certain historical stage. With their help, it is possible to withdraw part of the national income and appropriate it for the implementation of state objectives.

The system of taxes and fees of modern society is the most important regulator of the national economy, which ensures the stability of the financial life and the functioning of the credit mechanism on a national scale. Literacy in the approach to the organization of the mechanism of taxation of the country determines the degree of effectiveness of the functioning of the entire national economy.

The main principles of taxation of economic entities and the population are the principles of economy, convenience, equity, division by levels of budget, certainty, application of the scientific approach when establishing the value of taxes.

In practice, these principles are implemented through taxation methods. Methods understand ways to construct tax rates in relation to the tax base. By this criterion, four main methods of taxation are distinguished: proportional, equal, progressive, regressive.

Taxation methods play an important role, since the correctness of the distribution of the tax burden on all subjects of the economy and citizens depends on their correct choice. This also determines the amount of revenues to the budget and the burden on individual payers, taking into account their financial capabilities.

Equal taxation establishes a fixed amount of tax that is levied on payers. The tax rate is used in a firm amount, which is equal for all stakeholders and does not depend on the tax base.

Such methods of taxation are the most primitive and simple. On the other hand, they are also the most convenient, especially as emergency or temporary taxes, established in addition to permanent ones. For example, the poll tax that was paid under Peter I. This method does not take into account the material situation and income of payers, therefore the poor bear the burden of paying taxes in a larger amount. Today, this method is considered economically inefficient, since it does not meet the requirements of the principle of fairness.

Proportional taxation sets fixed tax rates for certain taxpayers in certain percentages and fractions that do not change when the tax base changes. These methods of taxation assume an increase in taxes, respectively, an increase in the tax base. In this case, the principle of fairness is fully taken into account. Today, most taxes in the Russian Federation are built on a proportional basis.

Progressive taxation takes into account the growth of the tax base when calculating the tax for payment. In this case, the tax rate is directly proportional to the tax base (with a growth in the base rate becomes higher). The choice of this method of taxation is based on the concept of so-called discretionary income - income, which is used at its own discretion. It equals the difference between aggregate incomes and those that are spent on meeting the minimum (basic) needs. With the increase in total income, the percentage of discretionary income also increases. With a proportional taxation method (when the tax base is equal to the total income), less wealthy payers are in a non-viable position, since the share of the free income they receive is less than that of the more affluent payers, and the share of the tax that they are obliged to pay, respectively, is higher. And progressive taxation in this case ensures observance of the principles of justice and equality.

Methods of taxation include one more - the method of regressive taxation. This method is a separate direction among all existing ones. Such taxation is considered as a progressive, but with negative coefficients of progression. With this method of taxation, the tax rate decreases with a proportional increase in the tax base. This method is rare in modern economics in its pure form. In Russia, this method is used to establish a social single tax.