On the choice of priority approaches towards taxation of the population

Abstract

The object of this research is the system of taxation of the population, while the subject is the composition and structure of taxes paid by private entities. The author analyzes the two priority approaches towards building the optimal and utmost fair system of taxation of private entities – through the object of “income” or “consumption”. Detailed analysis is conducted on the advanced Russian and foreign research on the topic. The author outlines the advantages and disadvantages of each approach from the perspective of horizontal and vertical justice, individual utility and its discounting. The scientific discussion on the absolute viability of taxation of income and consumption of the population is allocated into a separate chapter of the research. Based on the qualitative theoretical analysis, the author concludes on the rationality of choosing integrated approach towards creation of taxation system of the population. The cornerstone in this regard is the determination of the optimal ratio of consumption and income taxes. For this purpose, the author develops the original methodology based on the scattering matrix of 87 countries of the world, correlation and regression analysis of the indicators of their economic development and tax rates. The scientific novelty of consists in substantiation of the existence of substantial connection between the ratio of taxes on consumption and income of the population and the level of socioeconomic development of the country.