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Macroeconomics. Fiscal policy and its types

Fiscal policy is a set of government financial measures to regulate the economy through changes in government revenues and expenditures. Often, instead of the term "budget-tax", its synonym "fiscal" is used (from Latin fiscus - state treasury and fiscalis - related to the treasury). The main objectives of fiscal policy:

Steady growth of national income;

Moderate inflation rates;

Full employment of the population;

Smoothing out cyclical fluctuations in the economy.

Fiscal policy instruments: various types of taxes and tax rates, transfer payments and other types of government spending.

The most important comprehensive tool and indicator of the effectiveness of fiscal policy is the state budget, which combines taxes and expenditures into a single mechanism.

Different tools affect the economy in different ways. Government purchases form one of the components of total costs, and, consequently, demand.

Like private spending, public procurement increases the level of total spending.

In addition to public procurement, there is another type of government spending. Namely, transfer payments.

Transfer payments indirectly affect consumer demand by increasing household disposable income.

Taxes are an instrument of negative impact on total expenditures.

Any tax means a reduction in disposable income. A decrease in disposable income, in turn, leads to a reduction not only in consumer spending, but also in savings.

Fiscal policy can both beneficially and quite painfully affect the stability of the national economy.

It varies significantly depending on the tasks.

But in fact, the main task of fiscal policy is to mitigate the shortcomings of the market element by consciously influencing aggregate demand and aggregate supply in the market. Modern fiscal policy determines the main directions for the use of the state's financial resources, methods of financing and the main sources of replenishment of the treasury.

Fiscal policy as a way of financial regulation of the economy is carried out with the help of powerful levers - taxation and government spending.

In this regard, two types of fiscal policy are being pursued: discretionary and non-discretionary (automatic).

The essence of discretionary policy is that government spending increases the amount of total spending in the market, thereby stimulating the production of GDP, and thus affecting the employment of the population (Fig. 2.1).

Analyzing fig. 2.1 we can conclude that the reduction in government spending leads to a reduction in GDP and vice versa, an increase in government spending leads to an increase in GDP.

Government spending has an impact on aggregate demand similar to investment and, like investment, has a multiplier effect.

Rice. 2.1. Impact of government spending on GDP production

The government spending multiplier shows the increase in GDP as a result of the increase in government spending spent on the purchase of goods and services.

Moreover, the multiplier effect can take place both with the growth of GDP and with its reduction, when government purchases are reduced.

The government spending multiplier in its model completely coincides with the investment multiplier. Therefore, the formula for the government spending multiplier is the same as for the investment multiplier:

M state. cons. = 1/1-PSP,

where PSP is the marginal propensity to consume.

However, in reality, in real life, everything happens far from being so simple and easy (Fig. 2.2).

Rice. 2.2. An increase in the price level under the influence of an increase in total spending

An increase in government spending will shift the SS (aggregate demand) to the right, in this case by 1,000 billion den. units Since in this case there will be an increase in the price level, the equilibrium level of the real national product will not increase by the same amount (for example, it will increase only by 500 billion den. units).

The increase in prices affects the level of planned investment, partially offsetting the processes generated by the multiplier effect, which is based on an increase in the volume of government purchases and orders.

There are 4 reasons why a change in the price level affects the level of planned costs and investments:

1. Real consumption is limited by the fall in the real value of funds at the disposal of economic agents, with an increase in the price level.

2. The growth of the level of planned investment is restrained by the establishment of higher interest rates with an increase in the price level.

3. Articles of the state budget, defined in national units, will correspond to a smaller number of actually offered goods and services with an increase in the price level.

4. The real balance of export-import transactions will decrease, as the prices for goods in the domestic market will increase compared to foreign counterparts.

Thus, since an increase in the price level leads to a reduction in all types of planned investment, the level of real GDP increases by an amount slightly less than that determined by the product of the multiplier of costs by an increase in real volume of government purchases and costs

Consider now the impact of taxes on national production and GDP.

Taxes also have an effect on aggregate demand, but this effect is somewhat different from that of government spending. As you know, the increase in taxes causes a reduction in the disposable income of the population, which reduces the volume of consumption, and, consequently, reduces the size of aggregate demand and GDP. But disposable income consists of 2 components - consumption and savings, therefore, a decrease in income causes a reduction in both consumption and savings.

Suppose that the government introduces a lump sum tax of 20 billion den. unit, which remains unchanged at any level of GDP. With PSP = 3/4, consumption will be reduced, as you know, not by 20 billion den. units, and by 15 billion den. units and 5 billion den. units the personal savings of the population will also decrease.

To determine the amount of reduction in consumption of DP, it is necessary to multiply the amount of the tax increment of DT by the PSP:

DT \u003d DT * PSP \u003d 20x3 / 4 \u003d 15.

Similarly, multiplying the amount of tax increase DT by the marginal propensity to save will show the amount of decrease in taxpayers' savings.

The effect of taxes, like investment and government spending, has a multiplier effect. However, unlike government spending, which has a larger impact on total spending, taxes have a smaller impact because government spending is one component of total spending, and taxes are a factor influencing one of the consumption variables. This means that the tax multiplier has less effect on reducing aggregate demand than the government spending multiplier on increasing it. The offset effect of an increase in government spending requires a larger increase in taxes than an increase in government spending.

Therefore, the tax multiplier is equal to the government spending multiplier multiplied by the PSP (equal, for example, to 3/4).

In this case, M state. cons. = 4, M taxes = M state. cons. x PSP. Therefore, Mtax.=OSPPSS

With tax cuts, the direct line of consumption, investment, and government spending (C + i + e) rises, and equilibrium GDP increases (Figure 2.3).

The introduction of additional taxes or an increase in the rates of existing ones leads to a decrease in disposable income (income after taxes) of taxpayers, which is reflected in the total amount of total expenses (they are decreasing).

Sometimes state regulation of the economy involves simultaneous changes in taxes and government purchases. And here the following regularity is revealed: with an equal increase in government spending and taxes, the growth in equilibrium GDP will be equal to the growth in government spending. In this case, the multiplier of the so-called balanced budget is equal to 1.

Rice. 2.3. The impact of taxes on GDP

Thus, by analyzing discretionary fiscal policy related to public spending and taxes, the state can predict fiscal policy in different periods of the economic cycle.

Consider non-discretionary fiscal policy. In practice, the level of public spending and tax revenues may change even if the government does not make appropriate decisions. This is explained by the existence of built-in stability, which determines a non-discretionary (automatic, passive) fiscal policy. Built-in stability is based on mechanisms that operate in a self-regulating mode and automatically respond to changes in the state of the economy. They are called built-in (automatic) stabilizers. These include:

1). Changes in tax revenues. The amount of taxes depends on the income of the population and enterprises. In a period of decline in production, revenues will begin to decrease, which will automatically reduce tax revenues to the treasury. Consequently, the income remaining with the population and enterprises will increase. This will, to a certain extent, slow down the decline in aggregate demand, which will positively affect the development of the economy. The progressiveness of the tax system has the same effect. With a decrease in the volume of national production, incomes are reduced, but at the same time tax rates are reduced, which is accompanied by a decrease in both the absolute amount of tax revenues to the treasury and their share in society's income. As a result, the fall in aggregate demand will be softer.

2). The system of unemployment benefits and social payments. They also have an automatic anti-cyclic effect. Thus, an increase in the level of employment leads to an increase in taxes, through which unemployment benefits are financed. With a decline in production, the number of unemployed increases, which reduces aggregate demand. However, at the same time, the amounts of unemployment benefits are also growing. This supports consumption, slows down the fall in demand and therefore counteracts the escalation of the crisis. The systems of indexation of income and social payments operate in the same automatic mode. There are other forms of built-in stabilizers: farm assistance programs, corporate savings, personal savings, and so on.

Built-in stabilizers dampen changes in aggregate demand and thus help stabilize GDP output. With the growth of GDP, the incomes of the population and enterprises will grow, tax rates will also increase, therefore, they will restrain GDP growth and vice versa (Fig. 2.4).

To the left of the balanced budget point, lower taxes (with progressive taxation) will stimulate the development of production; to the right of the balanced budget point, higher taxes will restrain the growth of production (GDP).

Thanks to the action of built-in stabilizers, the development of the economic cycle has changed: recessions in production have become less deep and shorter. Previously, this was not possible, as tax rates were lower and unemployment benefits and welfare payments were negligible.

Rice. 2.4. Built-in stability

The main advantage of a non-discretionary fiscal policy is that its tools (built-in stabilizers) are activated immediately at the slightest change in economic conditions, i.e. there is practically no time lag.

The disadvantage of automatic fiscal policy is that it only helps to smooth out cyclical fluctuations, but cannot eliminate them. It should be noted that the higher the tax rates, the larger the transfer payments, the more effective the non-discretionary policy.

Fiscal policy affects not only aggregate demand but also aggregate supply.

Proponents of the concept of “supply-side economics” consider tax cuts to be one of the most effective factors in increasing aggregate supply. At the same time, they rely on the Laffer curve (Fig. 2.5).

A. Laffer believed that as the tax rate increases from 0% to 100%. Tax revenues first increase and peak at point A, and then fall, despite the increase in the tax rate. The fall in tax revenue, Laffer suggests, is due to the fact that higher rates constrain economic activity and, therefore, reduce the tax base, so even with an increase in the tax rate, tax revenue falls.

Rice.

where T is the amount of tax revenues, t is the tax rate (in %)

Supply-side fiscal policy measures include:

Measures to stimulate the current volume of production;

Measures aimed at a long-term increase in production growth rates.

The first group includes measures to increase the efficiency of the use of factors of production, increase the efficiency of resource allocation between competing areas of their application through the reform of the financial system, the reduction of subsidies, the removal of trade restrictions and other measures that promote competition.

The second group includes the stimulation of savings and investments, as well as the mechanism for transferring the former to the latter; stimulation of inflow of foreign investments and other structural transformations.

Budget deficit - the amount by which the annual budget expenditures exceed its revenues.

Public debt - the amount of the state's debt to its own or foreign individuals and legal entities (internal and external public debt, respectively).

These two concepts are closely related - a deficit can be covered by an increase in debt, a debt can be extinguished by an increase in the deficit. Therefore, some kind of balance between them is needed.

Balancing concepts:

Annual balancing

Balancing during economic cycles

Functional Finance

Annual balancing - ineffective, because economic processes proceed at their own pace and clearly do not fall into the annual cycle in time. Balancing during eq. cycles are already better, the state monitors the cycles and takes counter-cyclical measures, balancing the budget; the problem is the uneven alternation of periods of recession and economic recovery. The concept of functional finance suggests that the state take care not of balancing the budget, but of the macroeconomic stability of the economy as a whole, which, ultimately, leads to automatic balancing; This approach works mainly in economically developed countries. In practice, all three concepts are applied together.

In general, it is impossible to completely get rid of either the deficit or the debt, but this is not necessary, because. in moderation, they have a stimulating effect on the economy. However, when certain limits are exceeded, problems begin: a decrease in economic activity, inflation, unemployment, etc.

Fiscal policy (fiscal)- government policy in the field of taxation and public spending, designed to maintain a high level of employment, a stable economy, and growth in GDP.

The objectives of fiscal policy are to ensure:

1) stable economic growth;

2) full employment of resources(primarily solving the problem of cyclical unemployment);

3) stable price level(solution to the problem of inflation).

Fiscal policy is carried out by the government.

The instruments of fiscal policy are the expenditures and revenues of the state budget, namely:

1) public procurement;

2) taxes;

3) transfers.

There are two types of fiscal policy:

1) stimulating

2) restraining.

If the country is in depression or is in the stage of an economic crisis, then the state may decide to conduct stimulatingfiscalpoliticians. In this case, the government needs to stimulate either aggregate demand, or supply, or both. To do this, other things being equal, the government increases its purchases of goods and services, reduces taxes, and increases transfers, if possible.

Any of these changes will lead to an increase in aggregate output, which automatically increases aggregate demand and the parameters of the system of national accounts. A stimulating fiscal policy leads to an increase in output in most cases. The authorities are conducting contractionary fiscal policy in the event of a short-term “overheating of the economy” (excessive financing of economic growth, “over-crediting”, excessive investment of public funds in the economy, threatening an excessive state budget deficit and inflation).

In this case the government carries out measures that are directly opposite to those carried out under stimulating economic policy. The government cuts its spending and transfers and increases taxes, reducing both aggregate demand and possibly aggregate supply. Such a policy is regularly carried out by the governments of a number of countries in order to slow down the rate of inflation or avoid its high rates in the case of an economic economy. Fiscal policy is also divided by economists into the next two types: discretionary and automatic .

Discretionary Policy officially declared by the state. At the same time, the state changes the values of fiscal policy parameters: increase or decrease in government purchases, change the tax rate, the size of transfer payments and similar variables. Under automatic policy understand the work of "built-in stabilizers". These stabilizers are income tax percentage, indirect taxes, various transfer allowances. The amount of payments is automatically changed in case of any situation in the economy.

discipline: "Economic theory"

on the topic: Fiscal policy of the state

Introduction………………………………………………………………………3

1. Fundamentals of the tax system……………………………………….……5

1.1 Essence and functions of taxes and tax system…….…….……..5

1.2 Principles of taxation ……………………………………………………………………………11

1.3 Elements of taxation…………………………………………..16

1.4 Laffer Curve…………………………………………………………..18

2 Problems of improving taxation…………………20

2.1 Taxation in foreign countries (France)..……… .……..20

2.2 The state of the tax system in the Russian Federation…………………………………..29

Conclusion…………………………………………………………………49

References………………………………………………………...51

Introduction

The relevance of this topic is that in the conditions of market relations and especially in the period of transition to the market, the tax system is one of the most important economic regulators, the basis of the financial and credit mechanism of state regulation of the economy.

The effective functioning of the entire national economy depends on how well the taxation system is built, how well thought out the tax policy of the state is.

In a market economy, taxes play such an important role that we can say with confidence: without a well-established, well-functioning tax system that meets the conditions for the development of social production, an effective market economy is impossible.

From the point of view of the science of management, the state as an object of management does not differ in this quality from a private corporation. If the goals are correctly chosen, the available means and resources are known, then it remains only to learn how to effectively use these means and resources. The main financial resource of the state is taxes, so effective tax management can be considered the basis of public administration in general.

All the most important directions of the development of the state are impossible without appropriate funding, therefore, a developed economy is needed for the state to more fully fulfill its functions. A developed economy is possible with a developed system of state authorities, a competent and thoughtful tax policy. In our country, the period of formation of the tax system has not ended, and it is too early to talk about a competent tax policy. In view of this, the relevance of this work is undeniable.

Development. The topic of tax reform is hotly debated in society. Issues related to the adoption of the second part of the Tax Code, the problem of reducing the tax burden on the manufacturer, the issues of filing declarations and tax control and a host of other issues are discussed, there are also a lot of publications on these issues, but at the same time, tax policy is only touched upon in it in passing, as something necessary, but not in the first place.

The purpose of the work is to analyze the tax policy in the Russian Federation.

This goal can be achieved by solving the following tasks:

Consider the theoretical aspects of the tax system,

Analyze the tax policy of leading foreign countries,

Determine the specifics of tax policy in the Russian Federation,

Describe the system of public authorities of the Russian Federation,

involved in tax relations.

The methodological basis for the performance of the work are the works of Russian and foreign scientists.

1. Fundamentals of the tax system

1.1 The essence and functions of taxes and the tax system

It is obvious that any state needs funds of funds to perform its functions. It is also obvious that the source of these financial resources can only be the funds that the government collects from its "subjects" in the form of individuals and legal entities. These mandatory fees, implemented by the state on the basis of state legislation, are taxes.

Taxes are mandatory and non-equivalent payments paid by taxpayers to the budget of the corresponding level and state off-budget funds on the basis of federal laws on taxes and acts of the legislative bodies of the constituent entities of the Russian Federation, as well as by decision of the local government in accordance with their competence.

The tax system is a set of prescribed taxes and mandatory payments levied in the state. It is based on the relevant legislative acts of the state, which establish specific methods for the construction and collection of taxes, i.e. elements of the tax are determined.

These include:

1) the object of tax is income, the value of certain goods, certain types of activities, transactions with securities, the use of valuable resources, property of legal entities and individuals and other objects established by legislative acts.

2) the subject of the tax is a taxpayer, that is, an individual or a legal entity;

3) source of tax - i.e. the income from which the tax is paid;

4) tax rate - the amount of tax per unit of the object of tax;

5) tax relief - full or partial exemption of the payer from tax.

Taxes can be collected in the following ways:

1) cadastral - (from the word cadastre - table, directory)

When the tax object is differentiated into groups on a certain basis. The list of these groups and their characteristics is recorded in special directories. Each group has its own tax rate. This method is characterized by the fact that the amount of tax does not depend on the profitability of the object.

An example of such a tax is the tax on vehicle owners. It is charged at a fixed rate based on the capacity of the vehicle, regardless of whether the vehicle is in use or idle.

2) based on the declaration

Declaration - a document in which the taxpayer calculates income and tax from it. A characteristic feature of this method is that the payment of tax is made after the receipt of income by the person receiving the income.

An example is income tax.

3) at the source

This tax is paid by the person paying the income. Therefore, the payment of tax is made before the receipt of income, and the recipient of income receives it reduced by the amount of tax.

For example, personal income tax. This tax is paid by the enterprise or organization for which the individual works. Those. before paying, for example, wages, the amount of tax is deducted from it and transferred to the budget. The rest is paid to the employee.

There are two types of tax system: regular and global:

In a lumped tax system, all income received by the taxpayer is divided into parts. Each of these parts is taxed in a specific way.

In the global tax system, all income of individuals and legal entities is taxed equally. Such a system facilitates the calculation of taxes and simplifies the planning of financial results for entrepreneurs.

The global tax system is widely used in Western countries.

The functional effectiveness of the taxation system was initially predetermined by the essence of the objective economic categories "tax" and "taxation", i.e. their deep generic properties, which we call the internal potential of the category. The hidden potential of the economic category in the system of practical management is revealed in the process of implementing the functions of the objective economic category "taxation". On the surface of economic reality, we already perceive the category of "taxation" as a system of economic (financial) relations, which is constructed consciously with goals predetermined in the law. To define goals means to reveal the functional content of the taxation system. The completeness of the realization of the potential opportunities of the category "taxation" in the concept of taxation adopted by the law of a particular country and for a specific period of time can vary significantly. Based on the economic nature of the category "taxation", the tax system as such has two opposing economic functions: fiscal and regulatory.

Among the tax functions, scientists also name: fiscal, distribution, control, stimulating, regulatory (macroeconomic), social.

Fiscal and regulatory functions - by means of the fiscal function, the taxation system satisfies the nationwide necessary needs. By means of the regulatory function, counterbalances are formed to excessive fiscal oppression, i.e. special mechanisms are created to ensure the balance of corporate, personal and national economic interests. The ultimate goal of tax regulation is to ensure the continuity of investment processes, the growth of business financial results, and thereby contribute to the growth of the nationwide fund of funds.

Thus, both tax functions make it possible to transform the internal potential of taxation from its abstractly perceived ability to influence the qualitative and quantitative parameters of a business into the real results of such an action.

The fiscal function is to provide revenues to the state budget system and is under special control and influence of the state, at the center of its financial policy.

The regulatory (macroeconomic) function is the role of taxes and tax policy in the system of factors regulating macroeconomic processes, aggregate demand and supply, growth rates and employment. In the conditions of Russia, the tax system has shown itself as a factor in limiting demand, especially investment, deepening the decline in production, the formation of unemployment and underemployment of the labor force.

Fiscal policy is the government's influence on the level of business activity through changes in government spending and taxation.

Fiscal policy affects the level of national income and, consequently, the level of output and employment, as well as the level of prices; it is directed against undesirable changes in the economic environment associated with both unemployment and inflation.

The state budget is a financial account that presents the amount of government revenues and expenditures for a certain period (usually a year). The state budget can be viewed at the stage of its final approval by the legislature as the sum of expected tax revenues and estimated government spending.

Fiscal federalism - the division of powers in the field of taxation and spending between budgets of different levels.

Taxes are the main source of income for the budget.

Taxes are obligatory payments levied by the state from legal entities and individuals.

The object of taxation is the property on the value of which the tax is charged.

The tax rate is the amount of tax per unit of taxation.

According to the method of withdrawal, taxes are divided into direct and indirect. Direct taxes are levied With direct owner of the object of taxation. Examples of direct taxes are income tax, inheritance and gift tax, property tax.

Indirect taxes, in contrast to direct taxes, are paid by the final consumer of the taxed product, and the sellers play the role of agents for transferring the funds received by them in payment of the tax to the state. Examples: VAT, sales tax, excises.

According to the nature of the charge on the object of taxation, taxes and, accordingly, tax systems are divided into progressive, regressive and proportional.

With progressive taxation, tax rates increase as the object of tax increases.

A regressive tax is a tax that, in monetary terms, is equal for all payers, that is, it makes up a larger part of low income and a smaller part of high income. These are, as a rule, indirect taxes: when buying an excisable product (for example, black caviar), the state cannot establish, and the seller can receive from a buyer with a higher income level, an amount at a higher tax rate.

A proportional tax is a tax in which the tax rate remains the same, regardless of the value of the object of taxation.

The taxation system in Russia, fixed by the Tax Code, consists of three levels: federal, regional and local.

Tax functions:

Fiscal (replenishment of treasury revenues).

Regulatory (influence on the structure of the economy and the behavior of economic entities).

Laffer curve describes the relationship between tax rates and tax revenues to the state budget. The curve is about income tax.

According to the concept of the American economist Arthur Laffer, the desire of the government to replenish the treasury by increasing the tax pressure can lead to the opposite results.

Laffer believed that if the economy is, for example, at point K, then a reduction in tax rates will bring tax revenue closer to the level of pointM,i.e., to the maximum level of state budget revenues. This result, according to Laffer, is due to the fact that lower tax rates can increase incentives to work, saveandinvestmentandgenerally lead to an expansion of the tax base. Decrease in tax rates, causing incentives to expand production and employment, will reduce the need for transfer payments, such as unemployment benefits, and reduce the social burden on the budget. Thus, if the economy is in the area of the Laffer curve that is above the pointM,measures to reduce tax rates will lead to an increase in state budget revenues. An increase in tax rates is advisable only in the area that is below the pointM,for example, at the pointL. IN PRACTICE THE CURVE IS DIFFICULT TO APPLY =)))

Reducing the tax burden does not give a short-term effect (in the sense of a rapid filling of state budget revenues) and is fully manifested (ceteris paribus) only in the long term.

Budget deficit and how to finance it

State budget expenditures and its revenues do not always coincide. If expenditures are greater than revenues, then the government facesbudget deficit. The opposite situation, i.e., the excess of income over expenses, is calledbudget surplus, ortoo much.

Primary deficit is the total government budget deficit minus the interest paid on the government debt.

It is also customary to distinguish between actual, structural and cyclical government budget deficits.

Actual deficit is the negative difference between actual (actual) government revenues and expenditures.

Structural deficit is the difference between income and expenditures of the state budget, calculated for the level of national income corresponding to full employment. In other words, this that the difference that would exist if, under the current system of taxation and government spending adopted by the legislature, the economy would be fully employed.

Cyclical deficit is the difference between the actual and structural deficit of the state budget. Cyclical deficits are the result of fluctuations in economic activity during the business cycle.

Economic theory considers two main ways to finance the budget deficit:

1. Issue of new money, or issuance method of financing.

2. Loans (internal and/or external), which is usually called a non-emission method of financing the budget deficit.

Discretionary and non-discretionary (automatic) fiscal policy

Discretionary fiscal policy is the deliberate manipulation of the legislature with taxation and public spending in order to influence the level of economic activity. In this definition, it is important to pay attention to the fact that the legislature acts purposefully, adopting appropriate laws regarding the amount of public spending, tax rates, the introduction of new taxes, etc.

Discretionary fiscal stimulus implies an increase in government spending and/or a reduction in tax rates. Discretionary contractionary fiscal policy involves reducing government spending and/or increasing tax rates.

Automatic fiscal policy- These are automatic changes in the level of tax revenues, independent of government decisions. Automatic fiscal policy is the result of automatic or built-in stabilizers, i.e. mechanisms in the economy that reduce the response of real GDP to changes in aggregate demand. Chief among them are unemployment benefits and progressive taxation.

Tax multiplier:

m t = ∆Y/∆T = - MRS / (1 - MRS), or - MPC/MPS

Haavelmo's theorem: an increase in government spending accompanied by an increase in taxes to balance the budget will cause income to rise by the same amount. The balanced budget multiplier is equal to 1, regardless of the value MRS.

TAX AND BUDGET (FISCAL) POLICY OF THE STATE

Government revenues are the part given by each citizen from his property in order to safely use the rest.

Charles Montesquieu

Public finances, their features, functions and role in the economy.

The state budget as the main link in the financial system. Revenues and expenditures of the state budget.

Budget deficit and its causes. External and internal public debt.

fiscal policy. Taxes and the tax system. Principles of construction of the tax system.

Taxation systems: progressive, proportional, regressive.

Economic meaning of the Laffer curve. Discretionary and automatic fiscal policy.

You have already understood that in order for the state to successfully solve its tasks, which we talked about in the last topic, it needs huge amounts of money, called public finance.

The term finance itself comes from the Latin. finance, What does "payment" mean? For the first time in this meaning it began to be used by merchants in medieval Italy in the XIII-XV centuries. Later, the term gained international distribution and began to be used as a concept associated with the monetary circulation system, the formation of monetary resources mobilized by the state to perform its political and economic functions.

Finance is a system of economic relations that have developed in society for the formation and use of funds of funds based on the distribution and redistribution of the gross national product.

Thus, finance is not just the money of the state, but precisely the economic relations that arise on their occasion, because the money must be collected in a certain order, rationally distributed among various funds (for example, a pension fund, a fund for the development of science, education, support for small business etc.) and use it effectively.

Signs of finance:

- monetary form of expression;
- distributive nature of relations in the absence of an equivalent exchange;
- distribution of GNP and ND through special funds.

The functions of finance are as follows:

1) accumulating- creation of a material basis for the existence of the state and ensuring its functioning;
2) regulatory- stimulating the activities of subjects of financial relations in order to develop scientific and technical progress and solve social problems;
3) distribution- the formation and use of funds through the appropriate funds for special purposes: the state budget, the social insurance fund, special funds, enterprise funds;
4) control- Ensuring the correct collection of taxes and their use for their intended purpose.

The totality of financial links that provide the state with the performance of its economic and political functions is called financial system. In modern conditions, it consists of four links: the state budget, municipal finance, finance of state enterprises and special government funds.

The financial system of most states, including Russia, today is built on principle of fiscal federalism when the principle of fiscal federalism: the functions of individual parts of the financial system must be clearly delineated. Thus, the government is completely independent in the purposes relating to the nation as a whole - spending on defense, space, foreign relations of the state. Local governments finance school development, public order, and so on. Local budgets do not include their revenues and expenditures in the state (federal) budget.

The central link of the financial system is the state budget- the largest monetary fund that the government uses to finance its activities. It consists of two interrelated and complementary parts: revenue and expenditure.

Revenue part shows where the funds come from to finance the activities of the state, which sections of society deduct the most from their income.

Expenditure part shows for what purposes the funds accumulated by the state are directed.

Each country has its own budget structure. It is determined by the economic potential of the country, the scale of the tasks solved by the state at this stage of development, the role of the state in the economy, the state of international relations, and a number of other factors.

Sources of the state budget:

- direct and indirect taxes. They make up 80 to 90% of state revenues;
- government loans. They are carried out through the issuance and sale of government securities. Their share in the state budget is from 10 to 20%;
- emission (release) of paper and credit money. The government resorts to this source in the event that disposable income cannot provide financing for expenditures.

THE STATE BUDGET

(balance of government revenues and expenditures)

A. Wildavsky: "The main factor that determines the size of the state budget for the next year is the size of last year's budget."

State budgets are approved by parliaments, i.е. the supreme legislative power of the country, while the government is responsible only for the implementation of the budget.

This division of rights and responsibilities between the executive and legislature helps to bring the spending of taxpayers under the control of the highest elected power and to avoid the uncontrolled spending of money by government officials.

The following payments are made from the state budget:

Appropriations- the issuance of funds from the state budget for the maintenance of enterprises and institutions.

Subsidies- a type of general-purpose state cash benefit provided by the state to organizations, institutions.

Subventions- the type of state financial assistance to local authorities provided for specific purposes.

Grants- type of state benefit to organizations, enterprises to cover losses and support purposes.

Each government in its activities strives to ensure that the revenue side of the budget is equal to the expenditure side. This state of the budget is called balanced. However, in reality, the expenditure part of the budgets of most countries, as a rule, exceeds the revenue, and then one speaks of budget deficit.

The fact that the problem of the deficit of the state budget for Russia is by no means new is convincingly evidenced by an excerpt from an article published in September 1909 by the Moscow Weekly newspaper (editor-publisher - Prince E.N. Trubetskoy) and devoted to the discussion of the budget in the State Duma for the next financial year: "Comparison of the needs of the state for the coming years with its possible resources left no doubt to an impartial listener that the Russian budget has entered a period of chronic deficits, which can only be eliminated through heroic efforts."

There are two main causes of budget deficits. Firstly, due to the conscious actions of the government, which, out of necessity, decided to spend more than the income available. This deficit is called active budget deficit.

Secondly, a budget deficit may arise as a result of an economic downturn and a decline in real national income, which will reduce budget revenues. This deficit is called passive budget deficit.

The budget deficit undoubtedly refers to the so-called negative economic phenomena, such as inflation, crisis, unemployment, which, however, are integral elements of a market economic system. Moreover, without them, the economic system loses its ability to self-propulsion and development.

It should be noted that a deficit-free budget does not mean that the economy is healthy. It all depends on the causes of the deficit and the direction of spending public funds. If the excess of expenses over income is directed to the development of the economy, they are used to finance priority sectors, i.e. are spent efficiently, then in the future the growth of production will more than compensate for the costs incurred, and society as a whole will only benefit from such a deficit.

If the government does not have a clear program of economic development, and allows excess spending over income in order to patch up “financial holes”, subsidize unprofitable production, then the budget deficit will inevitably lead to an increase in negative aspects in the economy, and above all, to inflation.

How can the state cope with its budget deficit? World practice knows four main ways to solve this problem:

1. Reducing budgetary spending, since society must live within its means. However, this path can be very painful, since most often it “hits” social programs.
2. Finding sources of additional income through either increased taxes and their collection, or through more thoughtful and flexible taxation.
3. Issue of unsecured money used to finance government spending ("seigniorage" - printing money). This is the easiest, but also the most vicious way to balance the budget.
4. Borrowing money from citizens, banks, other states.

No matter how strange it may seem at first glance, but

most often for the state, like a citizen or a company, when there is a shortage of money, it is easiest to borrow it. Who? First of all, at their own, i.e. state, bank. But the possibilities of lending to the state by the national bank are usually quite limited.

In addition, by withdrawing money from the Central Bank, the state loses the income that it, as the owner of this bank, could receive from lending to private firms. Therefore, it turns out that it is more profitable to borrow money from citizens and economic organizations of the country. This is most often done through the sale of government bonds or short-term treasury bills.

In a country that pursues a prudent economic policy and cares about the authority of the state as a debtor, government securities are the most reliable way to invest temporarily free money. However, in the long run, this measure does not save the budget, it only transfers the budget deficit into the category of public debt, because government bonds and loans are nothing more than debt obligations of the state.

Public debt is the sum of accumulated budget deficits over a certain period of time, minus any positive budget balances available during that time. This includes the debt itself plus the interest accrued on it.

Distinguish external and internal state debt.

External public debt is debt to foreign states, organizations and individuals. This debt places the greatest burden on the country, since the lender usually sets certain conditions, after which a loan is granted.

Domestic public debt It is the duty of the state to its people. These are debt obligations of the government, expressed in the currency of the Russian Federation, to legal entities and individuals, which may take the form of loans, government loans, and other debt obligations guaranteed by the Government of the Russian Federation.

An increase in domestic debt is less dangerous for the national economy than an increase in its external debt. Usually, two dangers are seen in public debt: first, the possibility of bankruptcy of the nation, and second, the danger of shifting the debt burden onto future generations.

Regarding the first danger, the following can be noted: no one can prevent the government from fulfilling its obligations to service the public debt. These financial obligations are made up of refinancing (when the bonds mature, the government sells new bonds, using the proceeds to pay the holders of the redeemed bonds); levying new taxes (for the purpose of paying interest on the debt and its principal amount), issuing new money into circulation.

As for the second danger, the specifics of domestic debt is such that the country owes it to itself. In most cases, internal debt is only the relationship between the citizens of the country.

The real negative consequences of public debt are as follows:

First, paying interest on government debt increases income inequality because much of government debt is concentrated in the wealthiest part of the population, i.e. those who own bonds get even richer.

Second, an increase in tax rates can undermine the effect of economic incentives for production, reduce interest in investing in risky enterprises, R&D, etc., and also increase social tension in society.

Thirdly, the existence of an external debt presupposes the transfer of a part of the domestically produced product abroad.

Fourthly, the growth of external debt, of course, reduces the international authority of the country.

Fifth, when a government borrows from the capital market to refinance debt or pay interest, it inevitably increases the interest rate and reduces private investment, with the result that future generations may inherit an economy with reduced productive capacity.

Sixth, a purely psychological effect can also be noted: with the growth of public debt, the population's uncertainty about the future of the country increases. In Russia, public debt increased from 11.8% of GDP in 2010 to 18% of GDP in 2013.

It is no coincidence that it was said that the governments of all countries are striving for a balanced state budget, because budget surplus, those. the excess of income over expenditure is also not an easy problem for the country that has it.

In connection with the growth of world prices for oil and gas, Russia is faced with the problem of the excess of budget revenues over its expenditures. In 2007 Russia adopted a three-year budget for 2008-2010. It predicted that in 2008 and 2009 the federal budget will be executed with a surplus, and in 2010 expenditures and revenues will equalize.

For 2011, Russia adopted a budget with a deficit: income was to be 10.3 trillion rubles, expenditure - 11 trillion rubles. rub. However, in its actual performance, revenues exceeded expenses. In practice, this situation is often found in countries - exporters of raw materials.

The growth of the budget surplus means a reduction in government spending, which may be one of the reasons for the slowdown in inflation. This is a good tool to fight monetary inflation when there is a stable capital inflow. But there is a flip side to the coin: a budget surplus also means taking money out of the economy. In conditions when there is an outflow of capital, a budget surplus becomes a problem.

If in 2007 Russia received revenues from oil and gas of 8.85% of GDP, and in 2008 - 11.25%, then in 2009 - 9.1% (4.695 trillion rubles), in 2010 - 7.7% (4.526 trillion rubles). Due to the decline in oil and gas revenues due to the global financial crisis, the country had to reduce its spending after 2008.

It is clear that the government should tirelessly think about replenishing the budget and rational spending of budget funds. This activity has been traditionally called since the times of ancient Rome. fiscal policy, since the Romans called fiscus an department similar to modern ministries of finance.

fiscal policy- this is the use of the government's ability to levy taxes and spend state budget funds to regulate the level of business activity and solve social problems. Fiscal policy is the prerogative of the legislature, since it is they who control the taxation and spending of these funds.

Fiscal policy is closely related to the state budget, but at the same time it has its own special (tax) emphasis. That is why its other name is fiscal policy.

Taxing people is as old as time. It existed in biblical times and was well organized.

Bible, Genesis, 47.26 .: “And Joseph made it a law for the land of Egypt, even to this day: to give a fifth part to Pharaoh, except for

only the land of the priests, which did not belong to the pharaoh.”

taxes- these are payments that are mandatory paid to the state revenue by legal entities and individuals.

A. Smith : "Taxes for those who pay them are not a sign of slavery, but of freedom."

Taxes are not only mandatory, but also compulsory and gratuitous. And although taxes are more often resented than approved, without them, neither modern society nor government can exist.

RU.Emerson: "Of all kinds of debt, man is the least inclined to pay taxes."

The tax is withdrawn only from the income of the taxpayer, i.e. it must not affect capital, or normal reproduction will be disturbed.

The tax system is based on the following principles:

Universality	tax coverage of all economic entities that receive income, regardless of the organizational and legal form;
Stability	stability of types of taxes and tax rates over time;
uniform tension	levying taxes at identical rates for all taxpayers as a share of income and profits;
obligatory	compulsion of the tax; the inevitability of its payment; independence of the subject in the calculation and payment of tax;
social justice	setting tax rates and tax incentives that put everyone on a roughly equal footing and have a sparing effect on low-income enterprises and population groups.

Depending on the subject of taxation, taxes are divided into those paid by legal entities and individuals.

It is necessary to distinguish between the source and the object of taxation. The source, regardless of the object of taxation, is the net income of the company.

Object of taxation- is a quantitatively measurable economic phenomenon, which serves as the basis for the calculation of taxes.

The objects of taxation are:

- income (from the enterprise or the population);
- property (real and movable);
- transfer of property as an inheritance, upon donation, as well as certain types of transactions (operations with securities) and the export of goods abroad (customs duties).

According to the methods of levying taxes, they are divided into two main groups: direct and indirect.

Direct taxes are levied directly from property owners, income recipients.

Indirect taxes are levied in the area of sale or consumption of goods and services, i.e. are ultimately passed on to consumers of the product.

But such a division is not entirely accurate, since direct taxes through price increases can be passed on to the consumer.

The thousand-year history of duties, fees, and taxes made it possible, in the end, to formulate three basic principles for building tax systems. According to these principles, tax systems can be progressive, proportional and regressive.

Progressive tax system - a method of levying taxes in which the tax rate increases as the amount of taxable income or property value increases.

Progressive taxation was used in Russia during the beginning of the reforms. For example, when levying a tax on personal income in 1995, the annual income of citizens up to 1 million rubles. taxed at a rate of 12%, and more than 1 million rubles. - already higher.

The use of such a system meant that rich citizens paid a larger share of their income in taxes than less wealthy. Since 2001, Russia has had a single proportional income tax - 13% - regardless of the amount of income.

Proportional taxation system - a tax collection method that uses a single tax rate regardless of the absolute value of the tax base (income, profit, property, etc.)

Proportional taxation is used in Russia, for example, when taxing the profits of firms: they all pay a tax of 20%, regardless of the amount of profit received (before January 1, 2009 - 24%).

Regressive taxation system - a method of levying taxes, which provides for a reduction in the tax rate as the absolute value of taxable income or property increases.

A regressive tax in Russia is, for example, value added tax (VAT). From the point of view of firms that pay it, it can be classified as proportional (the rate is the same for any amount of VAT). However, in relation to the income of citizens who are the real final payer of this tax, it acts as a regressive one.

The poor spend all their money on buying goods, and therefore all their income passes through the VAT sieve. Rich citizens, on the other hand, put some of their money into savings, which means that this money goes away from VAT. Therefore, it turns out that the richer the citizens, the more their savings, the lower the real VAT rate in relation to the total amount of their earnings.

The Unified Social Tax (ESN) can also be considered regressive. UST goes to the federal budget and state off-budget funds - the Social Insurance Fund of the Russian Federation, the Compulsory Medical Insurance Funds of the Russian Federation to exercise the right of citizens to state pension and social security (insurance) and medical care.

No matter how perfect the introduced system of taxation may seem to its authors, taxpayers always strive to shift them onto the shoulders of other fellow citizens.

In Holland, the authorities came up with a tax on houses, proportional to the width of the wall facing the street. The answer to this was a house erected in the capital of the country - The Hague - and now one of the city's attractions: its facade has a width of 1 m (!), But the house goes deep into the courtyard - into an untaxed space.

In England in the last century they introduced a tax on the tails of working dogs. In response, people began docking their dogs' tails to evade taxes. And then they generally bred a breed with minimal tails - bobtailers, which in translation from English means “stubby tail”.

On the other hand, the desire of the state to increase revenues to the budget by raising the tax rate is quite understandable.

Sh.Montesquieu: “Nothing requires so much wisdom and intelligence as determining the part that is taken from the subjects and the part that remains with them.”

Investigating the relationship between the tax rate and the receipt of tax funds in the state budget, the American economist Arthur Laffer showed that an increase in the tax rate does not always lead to an increase in state tax revenues.

If the tax rate exceeds a certain objective limit, then tax revenues will begin to decrease. A. Laffer proved that the same income to the state budget can be received both at a high and at a low tax rate. A graphic illustration of this provision is Laffer curve.

The Laffer curve shows that when the tax rate increases, government revenues initially increase, but only up to a certain limit at the point M, after which tax revenues begin to decline.

State tax revenues and at a high rate at the point N, and at a lower point L are the same. However, in the first case, the value of the tax rate does not stimulate demand and production, while in the second it creates incentives for work, savings and investment.

In practice, Laffer's ideas are difficult to use, since it is difficult to determine whether a country's economy is on the left or right side of the curve at a given moment. Thus, due to an error in this definition, the "Laffer effect" did not work during the Reagan presidency. Although the tax cut led to an increase in business activity in the country, at the same time it made it difficult to implement social programs.

The curve does not answer the question at what tax rate revenues are maximum, because such a tax rate is different for different countries and depends on many factors: the size and structure of the public sector of the economy, the type of fiscal policy, and others.

Americans, for example, believe that with such a tax rate as in Sweden (income tax - up to 55.5%, unified social tax - 32.8%, value added tax - 25%), no one would work in the USA in the legal economy.

Fiscal policy consists of two directions: discretionary fiscal policy and automatic.

Discretionary fiscal policy involves conscious government regulation of taxation and government spending in order to influence the real volume of national production, employment, inflation and economic growth.

In accordance with the recommendations of Keynes, after the Great Depression, all Western countries began to implement discretionary fiscal policy, which then was divided into three types: expansion, restrictive and anticyclic depending on the specific economic situation.

An expansionary fiscal policy is carried out when the economy operates below its potential, i.e. is in a recession. It is carried out by increasing government spending and lowering tax rates, which stimulates aggregate demand, but usually leads to an increase in the budget deficit.

Restrictive fiscal policy is carried out in the event of an unexpected increase in aggregate demand, causing an increase in the prices of factors of production. It is carried out by cutting government spending and raising tax rates, which reduces aggregate demand.

Counter-cyclical fiscal policy is to stimulate economic development in the opposite direction to that which is being pushed by the forces of cyclical development. This type of policy stimulates demand during a recession and limits it during a recovery.

Discretionary fiscal policy is sometimes compared to shooting at a fast-moving target: they have just prepared a bill related to the new situation in the economy, and while it was being discussed, the situation has become “old”, and a new bill needs to be developed. Economists call these delays lags.

Moreover, in the implementation of discretionary fiscal policy in no country in the world it is impossible to achieve full economic feasibility by making the necessary decisions.

The fact is that the very process of forming such a policy, both in its content and in form, is to a large extent a political process. It involves various political parties, branches of government, pressure groups, lobbyists, etc. Therefore, it often inevitably becomes not so much the result of economic needs as the resultant of the interests of political forces.

There is a second component in the general fiscal policy - automatic fiscal policy.

Automatic fiscal policy implies an economic mechanism that automatically responds to changes in the economic situation without the need to take any steps from the government.

Such economic mechanisms are also called built-in stabilizers, because they are provided for by laws and are built into the expenditure side of the budget. Here are the main ones:

1. Unemployment benefits. If unemployment rises, then the tax revenue to provide such benefits falls due to the overall decline in employment. But payments for such benefits will increase automatically. During the rise, on the contrary, the volume of such payments decreases, which slows down aggregate demand and makes it possible to save budget funds.
2. Corporate income taxes. Profit is the most cyclically sensitive form of income. It falls more than other types of income during a recession and rises faster during a recovery. Similarly, tax revenues from corporate profits fluctuate sharply. A fall in revenue immediately expands the state budget deficit, and vice versa.
3. Progressive income tax. Tax revenues will fall during a downturn and rise during an upswing, automatically stabilizing the economy i.e. limiting the depth and scope of cyclic fluctuations.

The struggle between supporters of expansionary and restrictive fiscal policy began in Russia from the moment real reforms were launched in the early 1990s. This struggle continues with varying success to this day, since it is extremely difficult to predict in advance what kind of policy (and with what specific quantitative parameters) will be most useful for the development of the country. Look for solutions on the go.

In practice, the monetary and fiscal policies of the state are closely interrelated. Government measures to finance the budget deficit lead, first of all, to an increase in the money supply, as the Central Bank loans are used, which is accompanied by a multiplier effect of the expansion of bank deposits. At the same time, monetary policy methods are implemented promptly and flexibly, unlike fiscal policy measures that require lengthy coordination between legislative and executive bodies, which reduces their effectiveness.

TEST QUESTIONS

1. Define public finance. What are their main features?
2. List the functions of finance. Expand their content.
3. Name the main links of the financial system.
4. What is fiscal federalism? Why is this principle applied throughout the world when building a financial system?
5. List the items of income and expenditure of the state budget. Which of the following are the most important?
6. What can be considered sources of the state budget?
7. Define a balanced and deficit budget.
8. Is it possible to unequivocally state that a deficit-free budget means that the economy is healthy?
9. What ways do you know of overcoming the budget deficit?
10. What are the possibilities of fiscal policy to stabilize the national economy?
11. What is included in the concept of "public debt"? Is it dangerous for the national economy as a whole?
12. Define the tax: a) progressive, regressive and proportional; b) direct, indirect.
13. What are the principles of building the tax system?
14. What can serve as an object of taxation?
15. Expand the economic meaning of the Laffer curve. Why does she have such a shape?
16. What is the essence of discretionary fiscal policy? What types of it do you know?
17. What are the main activities of the government in the field of: a) expansionary fiscal policy during the economic downturn; b) restrictive fiscal policy in conditions of inflation caused by excess demand?
18. What is the difference between automatic fiscal policy?
19. How do you understand the term "built-in stabilizers"?
20. What are the main objectives of fiscal policy?
21. What is the connection between the fiscal and monetary policy of the state?

TASKS AND EXERCISES

1. The most common principle of taxation is the payment of taxes in proportion to the benefits received and in proportion to the income received. The tasks of local authorities are:
- a) construction of a supermarket;
- b) reconstruction of the museum;
- c) construction of a bowling alley and a tennis court;
- d) technical re-equipment of the local hospital.

Which of the principles of taxation would you propose to finance these expenses?

2. Select, in order of importance, the four main sources of income for the state budget of developed countries:
- a) income from state property;
- b) net proceeds from raising funds from the free capital market;
- c) inheritance tax;
- d) value added tax;
- e) customs duties;
- f) property tax;
- g) social contributions;
- h) tax on transactions with securities;
- i) corporate income tax;
- j) personal income tax.
3. Name, in order of importance, the three main items of expenditure of the state budget from the following:
- a) administrative and management expenses;
- b) payments on the public debt;
- c) loans and assistance to foreign states;
- d) spending on social services: pensions, benefits, health care, education;
- e) defense;
- e) expenses for economic needs;
- g) expenses for the protection and improvement of the environment.

TASKS FOR THE WORKSHOP

1. Why do you think a monopoly firm cannot completely pass on the increase in its tax burden to consumers by raising prices? Explain graphically existing restrictions.
2. Some time ago, the Swedish authorities sounded the alarm: instead of the usual 11 working months a year, the Swedes began to work only 10. Maybe they get very tired? “It seems not,” the doctors replied. And then the authorities turned to economists. Those quickly found the root of evil. Try and guess, remembering that Sweden is a country with high and progressive taxes, through which more than 50% of GNP has long been distributed. Think about why this effect in economic history is called "Swedish unemployment"?
3. Suggest options for using tax incentives to reduce environmental pollution.
4. According to economic theory, what decisions in the field of tax policy will lead to an increase in supply in the labor market?
5. Which of the following measures, in your opinion, can most hinder the growth of the budget deficit? What would you suggest to reduce it? Does a "deficit-free" budget mean that the economy is completely healthy?
- reducing the rate of collected taxes and reducing the size of transfer payments;
- an increase in the discount rate of interest with a simultaneous increase in the reserve ratio of commercial banks;
- an increase in the tax rate with a simultaneous decrease in the reserve ratio of commercial banks;
- an increase in the rate of collected taxes and an increase in the size of transfer payments.

TESTS

1. The state budget deficit is a consequence of:
- a) fiscal and monetary policy;
- b) monetary policy;
- c) cyclical fluctuations in the economy;
- d) fiscal policy.
2. An example of an automatic stabilizer is:
- a) deliberate change in tax rates;
- b) unemployment benefit;
- c) elimination of subsidies to the coal industry;
- d) adoption of a program for the economic development of the regions of the North.
3. The real value of the amount of taxes received by the state in terms of inflation, as a rule:
- a) is growing
- b) decreases;
- c) does not change;
- D) has nothing to do with inflation.
4. A more even distribution of wealth in Russia is likely to result from:
- a) introduction of a 5% sales tax;
- b) an increase in the excise tax on vodka;
- c) the abolition of state subsidies for bread and milk;
- d) doubling the excise tax on the sale of cars.
5. A special tax on cigarettes that increases their price in order to limit smoking is called:
- a) sales tax;
- b) sales tax;
- c) excise duty;
- d) a direct tax.
6. Which taxes are most likely to change the structure of consumer choice of various products:
- a) sales tax;
- b) excise;
- c) personal income tax;
- d) income tax.
7. Those who believe they have to pay taxes based on their ability to pay would prefer:
- a) excises;
- b) turnover tax;
- c) progressive income tax;
- d) real estate tax.
8. The government may reduce taxes in order to:
- a) slow down the rate of inflation;
- b) slow down the rapid growth of interest rates;
- c) to reduce the expenses of entrepreneurs on buildings and equipment;
- d) increase consumer spending and stimulate the economy.
9. J.M. Keynes was a proponent of:
- a) an annually balanced state budget;
- b) unlimited budget deficit;
- c) minimal participation of the government in fiscal policy;
- d) applying the budget deficit in all cases where the actual GNP is lower than the potential GNP.
10. The higher the income, the higher the tax rate, these are:
- a) progressive form of taxation;
- b) proportional form of taxation;
- c) regressive form of taxation;
- d) a similar situation applies to all forms of taxation.

BLITZ POLL

1. Automatic stabilizers cannot completely eliminate cyclical macroeconomic fluctuations.
2. Fiscal policy cannot provoke significant inflation.
3. A change in the interest rate does not affect aggregate demand, but affects the change in the absolute value of tax revenues.
4. Fiscal policy is applied to change the money supply.
5. Due to economic lags (delays), fiscal policy does not play any role for macroeconomic stabilization.
6. The executive power (government) can arbitrarily change fiscal policy in any direction.
7. The state budget deficit has no long-term consequences for the national economy.
8. In Russia in 1992-1993. fiscal policy led to a significant federal budget deficit.
9. Keynes was a supporter of the use of budget deficits in all cases where the actual GNP falls below the level of potential GNP.
10. Technically, the operation of paying excise tax is the responsibility of the buyer.
11. Doubling the excise tax on cars will lead to a more even distribution of wealth.
12. The introduction of a 5% sales tax will lead to the same result.
13. Automatic fiscal policy does not depend on the decision of the authorities.
14. Passive fiscal deficits result from lower revenues due to a cyclical downturn.
15. The application of fiscal policy gives results after some time.
16. Unemployment benefit is not a "built-in" stabilizer.
17. The accumulated deficit becomes public debt.
18. A sharp increase in taxes encourages investment.
19. With an expansionary fiscal policy, a budget deficit arises or increases.
20. With a restrictive fiscal policy, the budget deficit is reduced.
21. The issue of paper and credit money is the main source of the state budget.

BASIC CONCEPTS

Automatic Fiscal Policy Active Fiscal Deficit Counter-cyclical Fiscal Policy Appropriations Fiscal Deficit Public External Debt Domestic Public Debt Built-in Stabilizers Public Debt Discretionary Fiscal Policy Subsidies Indirect Taxes

Laffer Curve Taxes

Restrictive fiscal policy Passive budget deficit Principle of fiscal federalism Progressive taxation system Proportional taxation system Direct taxes

Expansive fiscal policy

Regressive taxation system

Subventions

Subsidies

Finance

Fiscal policy Economic lags

LITERATURE

1. Astapovich A.Z. USA: economy, deficits, debt. M., 2001.
2. Bogdanov I.Ya. Economic security of Russia: theory and practice. M.: ISPI RAN, 2004.
3. Volkov A.M. Sweden: socio-economic model. M., Thought, 2005.
4. It all started with tithing: this many-sided tax world. M.: Progress-Univers, 2002.
5. Grebnev L.S., Nureev R.M. Economy. Basics course: Textbook for universities. M.: VITA, 2005, ch.15.
6. Keynes J. M. General theory of employment, interest and money. Moscow: Progress, 1998.
7. McConnell K, Brew S. Economics: principles, problems and politics. M.: INFRA-M, 2002. TL.
8. Taxes in developed countries / Ed. Rusakova I.G. M.: Finance and statistics, 1995.
9. Pilipenko N.N. Actual problems of socio-economic development of Russia: Collection of scientific papers, vol. 7. M.: INFRA-M, 2008.
10. Macmillan's Dictionary of Contemporary Economic Theory. M.: INFRA-M, 2003.
11. Economic and national security: Textbook / Ed. Oleinikova E.A. M.: Exam, 2004.
12. Theory of transition economy: textbook /Ed. Nikolaeva I.P. M.: UNITI-DANA, 2004.

ABOUT TOPICS

1. Those unloved, those inevitable taxes.
2. Ways to overcome the budget deficit in Russia.

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