Self-Regulation of the Tax Burden on Labour and Capital

Abstract

The article analyses various methods for determining the tax burden and highlights their shortcomings. A method is proposed that automatically determines the actual tax burden on labour and capital at each enterprise. To implement the method, it is proposed to define two concepts: ‘value added’ (as the sum of factor income for labour and capital) and ‘price’ (as the sum of value added and depreciation). The added value determines the tax base of VAT, and its components – the base of social contributions, personal income tax (PIT) and income tax, and the established rates – the tax burden on labour, capital and households. Self-regulation of the tax burden ensures the established link between the selling price of goods/services and actually paid taxes. At the same time, macroeconomic stability is ensured, automatic control of payment of taxes and social contributions, costs associated with tax control and tax reporting are minimized, the application of almost all known tax optimization schemes becomes more complicated. legitimate interests, factor income, labour, capital, households, tax burden, progressive tax rate, tax base