Fiscal policy and public debt. Topic: fiscal policy. state budget and budget deficit. state debt. Fiscal Policy in an Open Economy

It was said above that 80% of the country's budget consists of tax deductions, which are redistributed taking into account the state needs of the country. Therefore, the concept of "fiscal policy" is currently used. This policy is associated with measures to form the state budget and its use. The concept of "fiscal (fiscal) policy" is often used

Fiscal (fiscal) politics - government measures to change government spending, taxation and the state of the state budget, aimed at ensuring full employment, balance of payments and economic growth in the production of non-inflationary GDP.

The state can use a stimulating fiscal policy (fiscal expansion) to overcome cyclical downturns (in the short term), where government spending is expected to increase G, tax cuts T or a combination of these measures.

It can also use a restrictive fiscal policy (fiscal restriction), which limits the cyclical recovery of the economy and implies a decrease in government spending G, tax increases T... In the short term, these measures help reduce demand inflation at the cost of rising unemployment and falling production. In a longer period, the growing tax wedge can serve as the basis for the decline in aggregate supply and the deployment of the stagflation mechanism. Prolonged stagflation against the backdrop of ineffective public spending management creates preconditions for the destruction of economic potential, which is often encountered in transition economies, including Russia.

In the short term, budgetary tax policy accompanied by the effects of multipliers of government spending, taxes and a balanced budget.

Discretionary fiscal policy is a deliberate change in the amount of government spending, taxes and the state budget balance as a result of special government decisions aimed at changing the level of employment, production, inflation and balance of payments.

Non-discretionary fiscal policy is an automatic change in the named values \u200b\u200bas a result of cyclical fluctuations in total income. Non-discretionary fiscal policy implies an automatic increase (decrease) in net tax revenues to the state budget during periods of GDP growth (decrease), which has a stabilizing effect on the economy.

Net tax revenue is the difference between total tax revenue to the budget and the amount of transfers paid by the government.

With discretionary fiscal policy in order to stimulate aggregate demand during a recession, a budget deficit is purposefully created due to an increase in government spending (for example, to finance programs to create new jobs) or tax cuts. Accordingly, a budget surplus is purposefully created during the upswing period.

The discretionary policy of the government is associated with significant internal time lags, since changes in the structure of government spending or tax rates require a long discussion of these measures in parliament.

With a non-discretionary fiscal policy, budget deficits and surpluses arise automatically as a result of the built-in stabilizers of the economy.

The results of discretionary policies can also be seen when the effect of the budget balance multiplier is taken into account. It is calculated using the formula:

Discretionary politics is characterized by the deliberate manipulation of taxes and government spending in order to change the size of macroeconomic indicators.

The rapid growth of the internationalization of economic life is accompanied by the accelerated development of international credit. States are increasingly using to mobilize the necessary financial resources sources of free funds outside their national borders. As a result, external debt arises, which differs significantly from domestic debt.

State debt - the total amount of government debt to holders of government securities, equal to the amount of past budget deficits.

Interior public debt - the debt of the state to citizens, firms and institutions of a given country, which are holders of securities issued by its government.

External debt - debt of the state to foreign citizens, firms and institutions.

The rapid growth of international credit is the inevitable result of the internationalization of economic life, intercountry migration of capital, deepening of the economic interdependence of countries and regions. International credit makes it possible to significantly expand the possibilities of attracting financial resources both to meet the needs of the private sector and to cover the state budget deficits. At the same time, the growth of external debt creates very tangible problems. The main one is the growing dependence of the economies of both creditor countries and debtors on external factors that cannot be controlled by national funds.

Fiscal policyis the procedure for the formation of state revenues and taxation,aimed at ensuring economic growth, full employment, maintaining the stability of the economy and reducing inflation. A constituent element of the economic system that implements the functions of the state. A set of government financial measures to regulate the economy.

Fiscal policy in the United States is carried out by two bodies: Council of Economic Advisers (SEC)created to provide assistance and advice on economic issues to the President of the United States. Collects and analyzes economic information for forecasting, programming and policy formulation for the national economy.

Public Economic Committee (OEC)considers a wide range of economic problems of national importance (employment, social protection of the population, etc.).

Fiscal policy is based on financial relations.

Financial relations- economic money relationsmediating production, distribution, redistribution of the gross national product (GNP) through a one-way, non-equivalent, free and irrevocable movement monetary funds in financial system.

Financial system - these are financial relations and the bodies that implement them. The center of the financial system is the state budget.

The state budget- the financial plan of the state, the balance of its income and expenses by sources of income and the main directions of use of funds.

There are concepts: consolidated, cyclical, structural, realbudget, full employment budget.

Consolidated budget - state budget and regional budgets.

Cyclical budgettakes into account changes in government revenues and expenditures depending on the phase of the cycle, c. which is the Economy.

Structural budgetreflects the change in income and expenses of the state as a result of structural adjustment in the economy.

Real budget- is determined by the actually existing revenues and expenditures of the state. Their ratio may vary.

Full time budgetshows what the government surplusor deficits,if the economy functioned at full employment.

Budget surplus -positive budget balance, excess of state revenues over its expenditures.

Budget deficit- negative budget balance, a steady excess of government spending over its revenues.

Exists: structural, cyclical and real budget deficits.

Structural budget deficit - the result of government fiscal policy. It arises when the economy functions within the limits of the potential volume of production, but under conditions of a changing relationship between sectors of the economy.

Cyclical budget deficits - a consequence of changes in the industrial cycle occurs when the economy is in one or another phase of the reproduction process.

Real budget deficit is determined by the actually existing excess of expenses "over state revenues.

Budget balancing methods:

1) annually balanced budget;

2) a budget balanced on a cyclical basis;

3) functional budget.

Balanced annually budget makes it possible to achieve economic growth; overcomes unemployment and inflation. At the same time, this balancing method reduces the fiscal capacity of the state, deepens fluctuations in the business cycle and causes a drop in economic growth and inflation. Implemented by government increases in tax rates and cuts in government spending.

There is a concept balanced budget multiplier.

Balanced Budget Multiplier are equal increases in government spending, taxation, leading to a corresponding increase in the equilibrium NPP. It is equal to one.

Cyclically balanced budget - associated with countercyclical politics. To counter the slump in production, the government is cutting tax rates and increasing its spending.

Functional budget - a method of budget balancing, in which all the efforts of the state are focused on ensuring full employment, stabilizing the economy, and reducing inflation.

There are three ways to finance the state budget: 1) through loans from the population (internal loan); 2) through the sale of interest-bearing securities abroad (external loan); 3) by issuing (issuing) new money.

Domestic loan- release and placement government bondsand other securities among the population and firms in the amount of the budget deficit or part of it. The increase in government spending is carried out at the expense of the consumption of society.

External loan- an agreement with the government of another country on the provision of material assets or money at the disposal of a foreign borrower, on terms of return, for a period and with payment of interest. Increases external public debt,but does not reduce personal consumption in the creditor country.

Emission- a way to finance the budget deficit by issuing additional money into circulation. Leads to higher inflation.

Fiscal policy is automaticand discretionary.

Automatic fiscal policy- the so-called policy of "built-in stabilizers". With it, the progressive scale of taxation brings the change in tax revenues in direct correspondence with the level of the NNP, or national income; used for automatic stabilizationeconomy.

"Built-in (built-in) stabilizer"is any measure that tends to reduce the surplus of the state budget during a recession in production and increase the surplus (or reduce the deficit) during inflation, without the need for any special measures from the government.

Automatic stabilizationuses elements of automatic fiscal policy of the state, including: 1) automatic change in budget revenues with changes in the income of entrepreneurs and the population; 2) assistance to the unemployed and other social benefits; 3) benefits for farmers; 4) savings (retained earnings
corporations and the accumulation of funds by the population).

Discretionary Fiscal Policy consists in deliberate manipulation of tax rates, tax structure, and the size of government spending in order to change the volume of national production and employment, control inflation and accelerate economic growth. it happens stimulatingand restraining.

Incentive discretionary policiesincludes: 1) an increase in government spending; 2) tax cuts; 3) their combination. With a balanced budget, a budget deficit is needed during a recession or depression.

Restraining discretionary policiesincludes: 1) reduction in government spending; 2) increase in tax rates; 3) their combination. Should be guided by a positive budget balance if there is inflation in the economy.

Exists straightand indirectfiscal methods of economic regulation.

Direct methods- methods of budgetary regulation, when the state budget funds are used to finance the costs of expanded reproduction and cover non-production costs of the state, for government investments and structural policy.

Public financial resources are used to provide subsidiesand subsidiesfirms and industries, targeted loans;implementation public procurementgoods and services in order to stabilize the economic environment.

Subsidy- financial assistance in the form of a cash allowance provided by the government at the expense of the state budget to entrepreneurs of its country, foreign firms and states.

Subsidy- a form of centralized regulation of the income and expenses of firms, the costs of which exceed their profits. Financial assistance from the state budget to compensate for the losses of enterprises and organizations in the production and non-production spheres.

Targeted loans- commercial and investment loans provided to firms for strictly defined purposes.

State procurements- purchases by the state from firms and corporations of goods and services under a contract, or state orderwith their subsequent processing and sale in the domestic or foreign markets.

Government order - task for manufacturers to produce scarce or special goods of national importance, in demand within the country and abroad.

Indirect methods of budgetary regulation- measures by which the state influences the financial capabilities of producers and the size of consumer demand through taxation systemand politics accelerated depreciation.

Tax system - a set of mandatory payments (taxes)legal and individuals to the state budget; main tool state regulation economy. The list of taxes and their rates are determined by the government of the country.

Tax - obligatory payments of enterprises, organizations, population; the main source of income for the state budget, local budgets. They affect the costs and profits of enterprises, the purchasing power of the population and the standard of living.

Taxes are distinguished:

On the subject of taxation (profit, property, etc.);

By institutions that receive taxes (federal,
local budget);

By subject of taxation (firms, citizens);

By charging method (ad valorem,one-off, lump-sum);

By collection mechanism (straight,indirect);

By accrual method (progressive, regressive,
proportional).

Taxation system of Ukraine- approved by the law "On the taxation system" adopted on June 25, 1991, which defines the following taxes, feesand mandatory payments:

Income taxes;

Income tax of foreign legal entities from
activities in Ukraine;

- sales tax;

- excise duty;

- value added tax;

Export and import tax;

Personal income tax;

Payment for natural resources;

Environmental tax;

State duties (for example, from vehicle owners, etc.);

Customs duties.

Exists double taxation.

Double taxation- this is the income tax of a foreign participant in the joint venture. Initially, this tax is paid when transferring profits abroad, the secondary taxation is made in the country of the foreign partner of the joint venture.

Tax methods: 1) accrual;2) retention(payment).

Tax accrual- determination of the amount of debt, is tax authorities based tax return(for individuals).

Tax return- an official statement of the person on the amount of his income in the form of a written document entailing legal and economic responsibility in case of deliberate distortion of information.

Withholding taxes- deduction from the income received directly (for example, income tax on wages).

Ad valorem tax- a fixed interest rate related to the total value of the goods, on the basis of which the corresponding payments are made (trade taxes, import duties, etc.).

Lump-sum payment- license fee, a certain amount fixed firmly in the agreement.

Progressive tax- a tax, the average rate of which rises as the taxpayer's income increases and decreases as this income decreases.

Proportional tax- a tax, the average rate of which remains unchanged with an increase or decrease in the taxpayer's income.

Regressive tax- a tax, the average rate of which decreases (increases) as the taxpayer's income increases (decreases).

Direct taxescharged at a fixed interest rate on the amount of income. These include: taxes on income (profits) of firms, corporations; individual income tax, inheritance taxes, on vehicles etc.

Indirect taxes... The mechanism for collecting these taxes is pricing. it value added tax, excise taxes, value added tax,customs duties, etc.

Value added tax - a part of the newly formed value at each technological stage of the production of goods or the provision of services. It comes to the budget after their implementation, which is carried out at prices increased by the amount of tax.

Excise tax - type of indirect tax on consumer goods (alcoholic beverages, tobacco products, salt, matches, gasoline, etc.). Paid to the state by producers and sellers of goods. The excise tax is included in the price of goods or tariffs for services.

Sales tax- a part of the net income of society, centralized in the budget by the state. It is paid on consumer goods and is quantitatively a firmly fixed part of the difference between the wholesale price of a product and its production costs. The state determines the list of goods, the prices of which include this tax.

In some cases, the state provides tax incentives.

Tax incentives- partial or complete exemption of legal entities or individuals from paying taxes; element of tax policy; pursue economic or social goals. The benefits include tax holidays.

Tax Holidays- the statutory period during which this or that group of firms is exempt from paying a certain type of tax.

Tax havens- small states, regions, territories and settlements (ports) focused on attracting capital, both domestic and from abroad, by providing tax and other benefits in the form of exemption from certain taxes or a reduction in tax rates.

Accelerated depreciation policycomes down to the exemption of entrepreneurs from paying taxes on a part of the profit that is artificially redistributed to the depreciation fund. Promotes economic growth and, at the same time, reduces the real purchasing power of the population due to rising costs and, consequently, the prices of goods.

Deficit financing from the budget is associated with education public debt.

Public debt is formed government loan.

State loan- credit relations regarding the accumulation by the state on the basis of repayment of funds to finance government expenditures, cover the budget deficit, stabilize the economy and, in particular, money circulation.

Legal entities and individuals are the lenders, the state is the borrower.

State debt- this is the debt of the state to one or another economic, legal or other entity that has lent money, material assets, economic objects, etc. It is a temporary mobilization of funds to cover government spending by issuing government loans. it happens internaland external.

Domestic public debt- this is the debt of the state to citizens, firms, organizations of their country. Such debt exists in the form of government-issued securities (bonds, certificates, personal checksetc.).

Bonds- securities confirming the deposit of funds by its owner and confirming the government's obligation to reimburse their par value within the prescribed period with payment of a fixed interest. Can be both registered and bearer, targeted, winning, freely tradable (market) or with a limited range of circulation (non-market), savings, treasuryand etc.

Savings bond- a written certificate of the state, certifying the owner's right to receive the bond amount and interest on it after the expiration of the established period.

Treasury bonds- the type of securities that certify that the holder has contributed funds to the budget and gives the right to receive a fixed income during the holding period. Placed on a voluntary basis among legal entities and individuals.

By maturity, bonds are divided into short-term (up to 1 year), medium-term (up to 5 years) and long-term (over 5 years). Maturity can be government consolidated.

Government debt consolidation - lengthening the terms of the loan.

Certificate (cash)- a security certifying the right of its owner to receive a certain amount of money and interest.

Personal check- a check issued to a specific person.

External debt - This is the debt of the government of the country to foreign citizens, firms, states, international organizations and funds.

Public debt service - repayment of the principal amount of the debt and payment of interest on it. In Ukraine, the National Bank (NBU) has been entrusted with servicing domestic and foreign public debt.

External debt service rateis derived as the ratio of the amount of payments of the country for servicing the external debt to the volume of its exports. This rate shows what part of foreign exchange earnings in a given period is withdrawn from the country's economy and cannot be used for accumulation or consumption.

The state debt is formalized by state loans.

Government loans (internal and external)are issued by both government and local governments. Divided into bond and Non-bond.

Non-bond loansthese are loans from banks or external intergovernmental loans, international organizations and funds. An example of a non-bond domestic loan is the issuance of various kinds of treasury obligations, bills, lending by the Central Bank to the state budget, etc.

There are four areas of exposure to public debt: income distribution, incentives, external relations, "crowding out effect".

Distribution of income in connection with the state debt, the ownership of bonds and the receipt of interest on them by certain groups of the population is carried out unevenly and leads to their differentiation.

Stimulation -the payment of interest on public debt forces the state to raise tax rates, which reduces the motivation for entrepreneurship.

External links- external public debt helps to strengthen foreign economic contacts.

"Creep effect"means a reduction in private investment due to scarce public funding.

The essence of the "crowding out effect" lies in the fact that fiscal policy, which tends to increase tax rates, undermines the investment effect of private entrepreneurs.

Factors counteracting the "crowding out effect":1) an increase in government spending on consumer needs and infrastructure; 2) the presence of unemployment in the country, which increases government spending on social benefits.

In the hands of the state, there are instruments for managing public debt: refinancing, taxation, "money creation".

Refinancing- is the issue and placement of new bonds and the redemption of the previous issue at this expense.

Taxation - a way to manage public debt by manipulating its structure and tax rates.

"Making money"- increasing the mass of money in circulation through the use of the emission mechanism in the hands of the state.

For buyers of government bonds, there are: financial, credit, market, interestand investment risks.

Risk- the quantitative size of potential financial losses. When a certain level of risk is exceeded, a situation arises in which investorrefuses to take the risk.

Investor- subject investment activities investing his own funds in securities (stocks, bonds), production, construction, etc.

Investments- investment in financial assets (securities) and economic activity.

Financial risk- associated with the possibility of deterioration financial situation the issuer of bonds (the state), which is unable to fulfill its obligations on the state debt.

Credit risk- the risk of non-payment of the principal amount of debt and interest due to the insolvency or bankruptcy of the borrower, is neutralized by the requirement of guarantees, the study of the creditworthiness of the debtor.

Market risk- arises as a result of unforeseen changes in the bond market, the attractiveness of which, as an investment object, may be lost.

Interest rate risk- change in interest rates and associated reduction market price bonds.

Investment risk- the possibility of obtaining income from investments in a smaller amount than the one calculated in advance by the investor.

An important instrument of macroeconomic regulation is the fiscal policy of the state.
N-B politics includes fiscal (in the field of taxation and regulation of the structure of government spending in order to influence the economy), budgetary (in the field of budget regulation; a key link in economic policy) policy and financial programs
Fiscal (tax - fiscal) policy is part of financial policy - in the aggregate financial arrangementscarried out by government bodies through the links and elements of the financial system; the impact of the state on the level of business activity through changes in government spending and taxation.

Fiscal policy is a policy that is aimed at stabilizing the economy with the help of the state. budget and tax system. From quality federal budget, the level of tax collection depends on the investment opportunities of the state, the level of social services. protection of citizens, entrepreneurial activity, the relationship of the Russian Federation with other countries and, in general, the effectiveness of the entire domestic and foreign policy of the state.

The state budget is important. element of NBP. This is a form of formation and spending of a fund of funds intended for financial support of the tasks of the functions of the state and local government. The division of powers in the area of \u200b\u200btaxation and spending between budgets of different levels is called fiscal federalism. In Russian statistics, the consolidated budget is used (it consists of federal, regional and local budgets). The deficit (surplus) of the state budget is defined as the difference between income and expenses. The deficit (surplus) is measured as a percentage of GDP. Since 2000, there has been a surplus in Russia.

Distinguish between primary (total deficit, reduced by the amount of% payments on government debt) and general deficit (surplus) of government debt. budget.

In the macroeconomic. theories are considered 3 types of state deficit. budget: 1) actual - the negative difference between the actual income and expenses of the state. budget; 2) structural - the difference m / d income / expenditure, calculated for the level of GDP, corresponding to full employment; 3) cyclical - the difference m / d actual and structural deficit of the state budget, is a consequence of fluctuations in the economy. activity during the business cycle.

LAFFER'S CURVE - a curve that graphically characterizes the dependence of the volume of government revenues on the average level of tax rates in the country. The curve illustrates the existence of an optimal level of taxation at which government revenues reach their maximum (Figure 1).

Figure 1 Laffer Curve. Graphical display of the relationship between budget revenues and the dynamics of tax rates

Fiscal policy - government regulation of business activity through measures in the field of budget management, taxes and other financial opportunities. Distinguish two types of fiscal policy: discretionary and automatic.

Discretionary (flexible) NBP is a deliberate regulation of government spending and the level of taxation in order to influence the real volume of national production, employment, inflation and economic growth (in order to influence the level of economic activity). WFP instruments: changes in the laws on tax rates, in the laws on government programs for social spending, changes in the programs of community works. But this process is slow, which reduces the effectiveness of discretionary fiscal policy. During the period of growth, the state uses a restraining policy (expenditures<, налоги > or both together), in the recession phase the state conducts a stimulating F. regiment, i.e. vice versa.
Non-discretionary (inflexible, automatic) NBP is automatic. change in the level of tax revenues, regardless of decision-making by the authorities. This policy is a rez-ohm of the action of automatic, or built-in stabilizers, i.e. furs, which reduce the reaction of real. GDP as measured by aggregate demand. Automatic stabilizers are applied by the government automatically, which is provided for by laws and is built into the expenditure side of the budget. The basis for such actions is only the presence of a recessionary or inflationary reserve.
Types of Fiscal Policy (FP):

1.expansion FI is carried out by increasing government spending and reducing tax rates,
which, as you know, leads to an increase in the budget deficit.

2. restrictive FI is based on cutting government spending and increasing tax rates. This type of fiscal policy is applied to overcome inflationary costs.

3. countercyclical FP is to stimulate economic development in the opposite direction to where it is being pushed by the forces of cyclical development. This type of policy stimulates demand during a recession and limits it during a recovery.
State budget deficit- the amount by which the state budget expenditures exceed its revenues. Accordingly, the amount by which the revenues of the state budget exceed its expenses is called surplus. As a rule, it goes to cover the public debt.

The budget deficit arises due to many reasons of an objective and subjective nature. Most often - because of the inability to mobilize the necessary income as a result of a decline in production, low labor productivity, and a decrease in production efficiency.

The reason for the budget deficit also lies in the unrestrained growth of expenditures, excluding financial capacity, in their insufficient feasibility and effectiveness. High costs of maintaining the army, administrative apparatus, covering losses of enterprises lead to consumption budget funds... Inflation, irrational tax and investment policies have a negative impact on the balance of the budget.

The budget deficit and the public debt are closely related: an increase in the budget deficit leads to an increase in public debt.

As a result of government loans, public debt is formed - this is the amount of budget deficits accumulated in the country for a certain period of time, minus the accumulated budget surpluses.
It can take the form of internal and external debt. External debt (from the IMF, for example, loans) is a heavy burden on the country, internal (the fact that the state borrows to finance the state budget deficit inside the country (from firms, from the population)) - leads to a redistribution of income among the country's population ... The refusal of the state to service and repay its obligations means a sovereign default (bankruptcy of the state). Critical or threshold for ext. loans yavl-Xia trace. indicators: the ratio of ext. debt to GDP ratio not higher than 80%; debt on rel. to export - no more than 200%; rel. the cost of servicing external, debt in relation to export - no more than 15-20%.

7. Taxes: essence, types. Problems and contradictions of taxation in Russia.

Tax is a mandatory individual payment levied from organizations and individuals in the form of alienation of funds belonging to them on the basis of property rights, economic management or operational management of funds in order to financially support the activities of the state and (or) municipalities.

The objects of taxation are income (profit), the cost of certain goods, certain types of activities of taxpayers, operations with securities, use of natural resources, property of legal entities and individuals, transfer of property, value added of goods and services produced and other objects established by legislative acts. In Russia, the foundations of the tax system are enshrined in the Tax Code of the Russian Federation.

There are two types of taxes. The first type is taxes on income and property: personal income tax; corporate income tax (corporations, firms); social security tax and payroll and labor taxes (so-called social taxes); property taxes, including taxes on property, including land and other real estate; taxes on the transfer of profits and capital abroad, etc. They are levied on a specific individual or legal entity, they are called direct taxes.

The second type is the tax on goods and services: sales tax, which in most developed countries is now replaced by value added tax (VAT); excise taxes (taxes directly included in the price of goods or services); inheritance tax, on transactions with real estate and securities, etc. These taxes are called indirect. They are partially or completely transferred to the price of the product or service. In Russia, about one half tax levies falls on direct taxes, the other - on indirect.

Basic taxes.

1. Personal income tax (personal income tax) is a deduction from the income (usually annual) of a taxpayer who is an individual. Payments are made throughout the year, but final settlement is made at the end of it. The tax systems of different countries, while generally similar, have their own sets of tax rates and exemptions from taxation, tax credits and due dates. Typically, income tax is levied at a progressive rate that rises as the taxpayer's income rises.

2. Tax on profit of enterprises, organizations (firms, corporations) is levied if they are recognized legal entities... However, for some firms in small business, an exception is made: they are recognized as legal entities, but taxes are paid not by them, but by their owners through individual income tax.

Corporate income tax (corporate tax) makes up the bulk of their tax payments. Profits, net income (gross receipts less all expenses and losses) are subject to tax. In Russia, the rate of this tax is close to that in the leading developed countries - up to 35%.

3. Social contributions (social taxes) cover the contributions of businesses to social Security and taxes on wages and labor. They represent payments that are made partly by the workers themselves and partly by their employers. They are sent to various extrabudgetary funds: unemployment, pension, etc. The state also takes part in financing these funds. Payroll and labor taxes are paid only by employers. In Russia, enterprises' contributions to state off-budget funds account for about 39.5% of their wage costs.

4. Property taxes are taxes on property, land and other real estate, gifts and inheritance. The size of these taxes is determined by the task of redistributing wealth. In some countries, such taxes are included in excise taxes levied on transactions.

5. Taxes on goods and services, primarily customs duties and taxes, excise taxes, sales tax and value added tax. The latter is similar to a sales tax, in which the final consumer bears the full burden. Taxpayers who, in the course of work, add value to the objects of labor received at their disposal, are taxed on this added value. But each taxpayer includes this amount in the price of his goods, which moves along the chain all the way to the final consumer.

Value added tax is levied in Russia (at the standard rate of 20%) and in almost all developed countries at the basic (standard) rate, which fluctuates, for example, in the EU, around 15%. However, some goods and services are not subject to VAT, while others are charged at a higher or lower rate. Most regions of Russia also levy sales tax (at a rate of up to 5%) on a number of goods and services. In some regions of Russia began to operate single taxon imputed income. Its payer is a small business in the service sector. The tax is paid quarterly at 20% of the estimated future tax.

The quantity tax amount (the so-called tax burden) depends primarily on the tax base and tax rate. The tax base is the amount on which the tax is levied, and tax rate is the amount at which the tax is levied.

The easiest way to collect taxes is on wages and salaries. Here taxes are collected automatically at the time of payment of the due money; no tax deferral is granted and there is virtually no tax evasion opportunity. The same applies to the rest of the social contributions (social taxes). It is easy to levy excise and value-added taxes, but while they generate revenues immediately, there is the possibility of artificially inflating material costs and diminishing taxable value gains.

With the normal organization of the customs service, the collection of customs duties is also not associated with serious problems.

The greatest difficulties arise in obtaining taxes from corporations (firms) in connection with the various possibilities of reducing taxable balance sheet profit by artificially inflating costs and using various benefits, discounts, deferrals, investment premiums, necessary deductions to various funds authorized by government bodies responsible for regulation economy.

There are problems of objectively assessing the value of land and other real estate when taxing this type of capital.

A lot of difficulties and troubles are caused to the tax authorities by the tax on personal income received not from hired labor, i.e. on the income of entrepreneurs, rentiers, people of the free professions. The final amount of tax on these incomes is determined at the end of the year, and they often pay tax during the current year, as it were, in advance in the amount of the tax payment for the previous year. The final recalculation is made on the basis of the tax return for the year, i.e. in fact, these taxpayers receive a deferred payment of part of the tax and have the opportunity to significantly reduce its amount. Due to the relatively low standard of living of the majority of the population, income from taxes on personal income is low; instead of them, the main place in the budget revenues is occupied by taxes on corporate profits and VAT

Direct taxes are difficult to transfer to the consumer. The easiest is the case with taxes on land and other real estate: they are included in the rent and rent, the price of agricultural products.

The task of maintaining the stability of the tax system as a factor in legalizing business and increasing the mass of tax payments is gradually coming to the fore. The individual amendments introduced to the legislation on taxes and fees should be increasingly aimed at increasing the clarity of legislation and at the unambiguity of its application by taxpayers.

The stability of the tax system also implies the immutability of the fundamental tax institutions and rules for the payment of taxes over a long period of time, which implies the rejection of any revolutionary changes in tax legislation and the tax system, aimed only at not obtaining a short-term effect of increasing the volume of revenues introduced without a reasonable economic calculations that are not focused on long-term and medium-term development prospects.

The reform of the tax system should take place gradually on the basis of a long and careful analysis of the situation with tax receipts. Any fundamental changes in the tax system of the Russian Federation, especially those changes that infringe on the economic interests of taxpayers, not only will not be able to increase tax revenues to the budget, but will also lead to loss of sources of income, since tax instability will become the decisive factor that will force many taxpayers to leave into the "shadow" economy.

Discretionary Fiscal Policy

Discretionary fiscal policy is the deliberate manipulation of government spending and taxes in order to change the real volume of national production and employment, control inflation and accelerate economic growth.

Suppose that the government has decided to purchase goods and services in the amount of $ 20 billion, regardless of the size of the NNP. By adding government purchases to private spending (C + In + Xn), we get a higher level of total spending, i.e. С + + In Хn + G, where G - government or government spending. An increase in government spending, as well as an increase in private spending, will lead to an increase in the equilibrium NPP. According to Keynes, government spending is subject to a multiplier effect. If an increase of $ 20 billion in government purchases caused an increase in the equilibrium NPP by $ 80 billion, then the multiplier in this case is 4.

It is important to emphasize that the $ 20 billion increase in government spending is not financed by increased tax revenues, since tax increases lead to a decrease in the equilibrium NPP. To have a stimulating effect, government spending must be accompanied by a budget deficit. Keynes’s fundamental recommendations included increasing deficit financing to overcome recession or depression.

What are the consequences of cutting government spending? In any case, the result is a multiple reduction in the equilibrium NPP. If government spending is reduced from $ 20 billion to $ 10 billion, then the equilibrium NPP will be reduced by $ 40 billion at a multiplier of 4.

The government not only spends funds, but also collects taxes. How does tax collection affect the value of the equilibrium NNP? Answer: an increase in taxes will cause a decrease in the value of the equilibrium NPP (Fig. 32.1).

Balanced Budget Multiplier

The balanced budget multiplier shows that equal increases in government spending and taxes cause an increase in the equilibrium NPP by the amount of their increase.

For example, an increase in G and T by $ 20 billion causes an increase in NPP by $ 20 billion.

At the same time, changes in government spending have a stronger impact on total spending than changes in taxes of the same magnitude. Government spending has a direct impact on total spending.

Changes in taxes indirectly affect total spending, through changes in income after taxes and through changes in consumption. The basis of the so-called balanced budget multiplier is revealed in figure 32.2.

The balanced budget multiplier is equal to one. An equal increase in taxes and government spending will cause an increase in NPP by an amount equal to an increase in government spending and taxes. With a marginal propensity to consume (MPC) of 3/4, a $ 20 billion increase in taxes would cause a $ 20 billion decrease in after-tax income and a $ 15 billion decrease in consumer spending. Since the multiplier is 4, the NNP will decrease by 60 billion dollars. An increase in government spending by $ 20 billion, however, will cause a more than countervailing increase in NPP by $ 80 billion. Therefore, the net increase in NPP will be $ 20 billion, which is equal to the increase in government spending and taxes.

The balanced budget multiplier operates regardless of the marginal propensity to consume and save.

Fiscal Policy Objectives

The fundamental goal of fiscal policy is to eliminate unemployment or inflation. During a downturn, the agenda raises the question of eliminating unemployment, and therefore of a stimulating fiscal policy. Stimulating fiscal policy includes: 1) an increase in government spending, or 2) tax cuts, or 3) a combination of the first and the second. If there is a balanced budget, fiscal policy should move in the direction of government budget deficits during a recession or depression. Conversely, if there is excess demand-driven inflation in the economy, a contractionary fiscal policy corresponds to this case. Restraining fiscal policy includes: 1) reducing government spending, or 2) increasing taxes, or 3) a combination of the former and the latter. Fiscal policy should be guided by the positive balance of the government budget if the economy is faced with the problem of controlling inflation.

However, it must be remembered that the size of the NPP depends not only on the difference between government spending and taxes (i.e., on the size of the deficit or surplus), but also on the absolute size of the budget. In our illustration of the balanced budget multiplier, an increase in G and T by $ 20 billion would increase the NNP by $ 20 billion.If G and T increased by only $ 10 billion, then the equilibrium NNP would only increase by $ 10 billion.

Methods of financing deficits and methods of getting rid of budget surpluses. Given the size of the state budget deficit, its stimulating effect on the economy will depend on the methods of financing the deficit. Similarly: for a given amount of budget surplus, its inflationary impact depends on how it will be eliminated.

There are two different ways the federal government can finance the deficit: by borrowing from the public (through the sale of interest-bearing securities) or by issuing new money to its creditors. The impact on total costs will be different in each case.

1. Borrowing.

If the government enters the money market and places its loans here, it enters into competition with private entrepreneurs for financial resources. Consequently, government borrowing will tend to increase the level of interest rates and, thus, will "push" some spending by private investors and interest-sensitive consumer spending.

2. Making money.

If government spending of the deficit budget is financed by issuing new money, pushing out private investment can be avoided. Federal spending can rise without detrimental to investment or consumption. Thus, creating new money is inherently a more stimulating way of financing deficit spending than expanding loans.

Inflation driven by excess demand requires fiscal action by the government that could generate a budget surplus. However, the anti-inflationary effect of such a surplus depends on how the government uses it. There are two possible ways:

1. Debt repayment.

Since the federal government has accumulated debt, it is logical that the government could use the additional funds to pay off the debt. This measure, however, may somewhat reduce the anti-inflationary impact of the budget surplus. By buying its debt from the public, the government transfers its excess tax proceeds back to the money market, causing the interest rate to fall and thus stimulating investment and consumption.

2. Withdrawal from circulation.

The government can achieve a greater anti-inflationary impact of its fiscal surplus simply by withdrawing these excess amounts, suspending any subsequent use. Taking the surplus means that the government takes some size of purchasing power from the general stream of revenues and expenditures and withholds it. If excess tax revenues do not flow back into the economy, then there is no possibility of spending even a certain part of the budget surplus, i.e. there is no longer any chance that these funds will create an inflationary impact that counteracts the deflationary impact of excess as such. It can be concluded that the complete withdrawal of the budget surplus is a more deterrent measure compared to using the same funds to pay off the public debt.

Which is preferable: government spending or taxes?

The answer to this question depends largely on the individual vision of the politician and how large the public sector is. Liberal economists who believe that the public sector should be expanded may recommend expanding total spending during a downturn by increasing government purchases and limiting total spending during a period of rising inflation by raising taxes. Conversely, “conservative” economists who believe that the public sector is overblown and inefficient may advocate an increase in total spending during a downturn through tax cuts and, during a period of rising inflation, propose a reduction in total spending by cutting government spending. It is important to note that an active fiscal policy aimed at stabilizing the economy can rely on both an expanding and a shrinking public sector.

Non-discretionary fiscal policy: built-in stabilizers

When considering discretionary fiscal policy, it was assumed that there is a permanent tax that ensures the withdrawal of the same tax amount for different values \u200b\u200bof the NNP. With a nondiscretionary fiscal policy, built-in, or automatic, stability arises due to the fact that in reality the tax system ensures the withdrawal of such a net tax that changes in proportion to the size of the NNP. Net tax is equal to total tax minus transfer payments and subsidies. Almost all taxes will increase tax revenues as the NNP grows. In particular, the individual income tax has progressive rates and, as the NPP grows, gives more than proportional increases in tax revenues. Moreover, as the PNP grows and the volume of purchases of goods and services increases, there will be an increase in revenues from corporate tax, turnover tax and excise taxes. And similarly, payroll taxes increase as new jobs are created during the economic recovery. On the contrary, if the NNP falls, tax revenues from all these sources will fall. Transfer payments (or "negative taxes") have exactly the opposite behavior. Payments for unemployment benefits, poverty benefits, subsidies to farmers - all decline during an economic recovery and rise during a decline in production.

Goal:consider the principles of the budget and tax system of the Russian Federation.
As a result of studying topic 8, the student must:

know:basic principles, functions and tasks of the state tax and budgetary policy;
be able to: apply the acquired knowledge in professional activities;
own: methods of calculating multipliers of government procurement and taxes.

Lesson plan

State budget structure, deficit and surplus.
Public debt, methods of repayment.
The essence and function of taxes, types of taxes. Principles and forms of taxation.
Fiscal policy: goals, instruments, types.
Laffer effect.
Public procurement multiplier. Tax multiplier.

BASIC CONCEPTS AND FORMULAS

8.1. State budget structure, deficit and surplus
In accordance with Article 6 of the Budget Code of the Russian Federation, under budget means "... the form of education and spending of funds intended for financial support of the tasks and functions of the state and local government." The budget defines the needs to be met at the expense of the state treasury, and also indicates the sources and amounts of expected revenues to the state treasury.
IN budget system RF includes budgets of the following levels:

Federal budget;
budgets of the constituent entities of the Russian Federation (regional budgets);
budgets of municipalities ( local budgets);
budgets of state off-budget funds.

If the planned budget revenues exceed budget expenditures, then this budget surplus... If the planned budget expenditures exceed budget revenues, then this budget deficit... When, during budget execution, the level of the budget deficit exceeds the indicator established when the budget was approved, or there is a significant decrease in the expected budget revenues, the representative body, on the basis of the proposals of the executive body, makes a decision on the introduction of a mechanism for reducing costs established by law. Such a "cut" of the planned budget expenditures is called sequestration.
State budget revenues are formed at the expense of funds received free of charge and irrevocably, in accordance with the current classification and existing legislation. Budget revenues are generated by:

taxes levied by both central and local governments;
non-tax revenues, consisting of revenues from foreign economic activity, as well as revenues from state property;
income of targeted budget funds.

In Russia, the overwhelming part of the budget (usually more than 80%) is formed from tax revenues.
State budget expenditures represent monetary funds allocated for financial support of the tasks and functions of state and local self-government. All expenses can be divided into the following groups:

military;
economic;
for social purposes;
on foreign policy activities;
for the maintenance of the administration.

8.2. Public debt, methods of repayment
State debt represents the result of financial borrowing by the state, carried out to cover the budget deficit. Public debt consists of the debt of the central government, regional and local governments, government organizations, and enterprises.
If the government's currency is not convertible, then two types of government debt are distinguished:

external debt - obligations arising in foreign currency, with the exception of obligations of the constituent entities of the Russian Federation and municipalities to the Russian Federation arising in foreign currency as part of the use of targeted foreign loans (borrowings);
domestic debt - obligations arising in the currency of the Russian Federation, as well as obligations of the constituent entities of the Russian Federation and municipalities to the Russian Federation arising in foreign currency as part of the use of targeted foreign loans (borrowings).

In the case of a convertible currency, all creditors, both domestic and foreign, have equal rights, and public debt is not divided into domestic and foreign debt.
The following mechanisms are used to reduce public debt:

debt restructuring - replacement of old debt obligations with new ones with softer repayment terms (lower interest rates, longer payment terms, etc.), as well as partial debt cancellation;
debt conversion - exchange of debt obligations for commodity deliveries or shares.

8.3. The essence and functions of taxes, types of taxes
The main role in raising funds for the state budget belongs to taxes. Under tax, in accordance with Article 8 tax code RF is understood as "... a mandatory, individually free payment levied from organizations and individuals in the form of alienation of funds belonging to them by right of ownership, economic management or operational management of funds in order to financially support the activities of the state and / or municipalities."
Taxes simultaneously perform the following main functions:

fiscal function - the main function of taxation: taxes are the predominant component of state budget revenues. The function is carried out at the expense of tax control and tax sanctions, which ensure maximum collection of established taxes and create obstacles to tax evasion. Thanks to this function, the main purpose of taxes is realized: the formation and mobilization of financial resources of the state;
distribution function consists in the redistribution of social revenues by transferring funds in favor of weaker and vulnerable categories of citizens by imposing the tax burden on the stronger categories of the population;
regulating function is aimed at achieving, through tax mechanisms, certain tasks of the state's economic policy;
control function allows the state to track the timeliness and completeness of budget receipts and compare their amount of financial resources;
stimulating function is aimed at supporting the development of certain economic processes; implemented through a system of benefits and exemptions. The taxation system of the Russian Federation provides a wide range of tax benefits for small businesses, enterprises with disabilities, agricultural producers, organizations making capital investments in production and charity work etc.;
destimulating function is aimed at establishing obstacles through the tax burden for the development of any economic processes.

All taxes are divided into several types.
Direct taxes levied from economic agents for income from factors of production. Indirect taxes - taxes on goods and services, consisting in the price of consumer goods. According to the tax legislation of the Russian Federation, indirect taxes include: VAT and excise taxes; other taxes in the RF are direct taxes.
It is also customary to distinguish between lump-sum and income taxes. Lump-sum taxes the state sets, regardless of the level of income of the economic agent, and income - make up a certain percentage of income. Income taxes, in turn, are divided into three types:

progressive taxes - taxes for which the average tax rate depends directly on the level of income;
regressive taxes - taxes, where the average tax rate is inversely proportional to the level of income;
proportional taxes - taxes, the rate of which does not depend on the amount of taxable income.

The tax system should: be flexible and easily adaptable to changing socio-political needs; ensure the redistribution of the created GDP; be an effective instrument of state economic policy. High taxes reduce the tax base and state budget revenues (Figure 8.1).

8.4. Fiscal policy: goals, instruments, types
Fiscal (fiscal) policy represents the measures taken by the government to stabilize the economy by changing the amount of revenues and / or expenditures of the state budget.
Fiscal policy objectives like any stabilization (countercyclical) policy aimed at smoothing cyclical fluctuations in the economy, are to ensure:

stable economic growth;
full employment of resources (first of all, solving the problem of cyclical unemployment);
stable price level (solution to the inflation problem).

Fiscal policy is the policy of government regulation, primarily of aggregate demand. The regulation of the economy in this case occurs by influencing the value of total expenditures. However, some fiscal policy instruments can be used to influence the aggregate supply through the influence on the level of business activity.
Instruments fiscal policy are the expenditures and revenues of the state budget, namely: 1) public procurement (G); 2) taxes (t); 3) transfers (Tr).
Fiscal policy instruments are used in different ways depending on the phase of the cycle in which the economy is located. There are two types of fiscal policy: 1) stimulating and 2) restraining.
1. Incentive Fiscal Policy carried out during a recession, is aimed at narrowing the recessionary output gap and lowering the unemployment rate and is aimed at increasing aggregate demand (aggregate spending). Its instruments are: a) an increase in government purchases; b) tax cuts; c) an increase in transfers.
2. Containment Fiscal Policy used in case of a boom (when the economy overheats), has the goal of reducing the inflationary gap in output and reducing inflation and is aimed at reducing aggregate demand (aggregate spending). Its instruments are: a) reduction of public procurement; b) increase in taxes; c) reduction of transfers.
In addition, a distinction is made between discretionary and automatic (non-discretionary) fiscal policy. Discretionary Fiscal Policy represents a legislative (official) change by the government in the amount of government purchases, taxes and transfers in order to stabilize the economy.
Automatic fiscal policy associated with the action of built-in (automatic) stabilizers. Built-in stabilizers are instruments whose value does not change, but the very presence of which (their built into the economic system) automatically stabilizes the economy, stimulating business activity during a downturn and holding it back when overheating. TO automatic stabilizers relate:

income tax (which includes both household income tax and corporate income tax);
indirect taxes (primarily VAT);
unemployment benefits;
poverty benefits.

8.5. Laffer effect
It should be borne in mind that such instruments of fiscal policy as taxes and transfers act not only on aggregate demandbut also on the aggregate supply.
Since firms view taxes as a cost, tax increases lead to a reduction in aggregate supply, and tax cuts lead to increased business activity and output.

Figure: 8.1. Laffer curve
A detailed study of the impact of taxes on the aggregate supply belongs to A. Laffer. A. Laffer built a hypothetical curve (Fig. 8.1), with the help of which he showed the effect of changes in the tax rate on the total amount of tax revenues to the state budget.
Using the tax function T \u003d t × Y, A. Laffer showed that there is an optimal tax rate (t *) at which tax revenues are maximum (Tmax.).

8.6. Public spending multiplier. Tax multiplier
It follows from a simple Keynesian model that all fiscal policy instruments (government procurement, taxes and transfers) have multiplicative effect impact on the economy.
Public procurement multiplier is a coefficient that shows how many times the national income increased (decreased) with an increase (decrease) in public procurement per unit:
, (1)
where m is the tax multiplier; MPC - marginal propensity to consume; MPS is the marginal propensity to save.
The total increase in national income (DY) from increased government procurement (DG) will be .
Tax multiplier is a coefficient that shows how many times the national income (GDP) will increase (decrease) with a reduction (increase) in taxes per unit.
. (2)
The increase in national income as a result of tax changes will be.
The tax multiplier works in the opposite direction than the government spending multiplier. Tax cuts increase real GDP (national income), while tax cuts reduce real GDP (national income).

Tax Code of the Russian Federation, part one of July 31, 1998, No. 146-FZ and part two of August 5, 2000, No. 117-FZ (current edition).