For a more complete presentation of the essence of the tax rate that is used as an instrument of fiscal policy at the state level, it is necessary to define some terms.
So taxes are compulsory payments to individuals and legal entities to the state budget at all levels to set deadlines applicable law.The collection of all taxes in the country forms a tax system that is based on the state of legislative acts.That these regulations establish tax components: the object of taxation, the subject and the tax rate.
In turn, the tax rate is divided by the mean, ultimately, effective, and preferential zero.The average tax rate is the ratio of total tax to the taxable income.The marginal tax rate is the ratio of increase of taxes paid to the increase in income.The effective tax rate is equal to chastnomum of the division to be paid in the course of economic activities by the amount of additional income resulting from the activities of the same income.
comparing the average rate of tax on income, you can determine how to undertake such tax charges: progressive, where the rate increase can be traced to an increase in earned income;regressive, providing for a reduction in the rate of income increase;proportional, ensures a constant rate regardless of income earned in a certain period.
When comparing the use of these techniques can be seen that a progressive tax system may result in the evasion of taxes, and taxpayers will do everything possible to reduce their income.This is achieved by adjusting the amounts of expenses and thus often everything happens within the law because of its imperfections.
striking example of applying the effective tax rate can serve as a transaction of gift, after which the tax authorities recalculated the tax paid.And then the tax rate will be slightly different from the original.
question of the value of the tax rate is the subject of constant discussion academics, politicians and economists.Thus, even for a long time followers of Keynes argued, that the decline in aggregate demand will occur at the high level of taxes.As a result - the state has a decline in prices and the damping of inflation.
The other side of these disputes, supporting the theory of "supply-side economics", proves the opposite.High taxes can increase the costs of business entities, which, in turn, their shift to the final consumer in the form of high prices and increasing inflation.Confirming said Mr. Laffer was formulated by the relationship between the tax rate and revenues in the budget in the form of a curve, which received the name of the author.The economic meaning of this chart is the ability to increase tax revenues by increasing the value of the tax to be revenue.However, this process should continue until a certain level, above which traced a sharp decrease in the activity of business entities, and their subsequent activity becomes unprofitable.At significantly lower rates of favorable conditions for work, encouraging entrepreneurship, savings, investment, and there is an expansion of domestic production.As a result of this process, there is an expansion of the tax base, contributing to an increase in tax revenue, despite the fact that the tax rate will be low.
