Fiscal policy of the state. Fiscal policy 1 fiscal policy

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Along with monetary policy, fiscal policy is the most important component of the macroeconomic policy of the state. fiscal policy called the system of state regulation, carried out through government spending and taxes. Its main purpose is to smooth out the shortcomings of the market mechanism, such as cyclical fluctuations, unemployment, inflation by influencing aggregate demand and aggregate supply.

Depending on the phase of the cycle in which the economy is located, there are two types of fiscal policy: stimulating and restraining.

Stimulating (expansionary) fiscal policy is applied during recession, is aimed at increasing business activity and is used as a means of combating unemployment.

Measures of stimulating fiscal policy are:

Increase in government purchases;

Tax cuts;

Increase in transfer payments.

Restraining (restrictive) fiscal policy used when the economy "overheats", it is aimed at reducing business activity in order to combat inflation.

Measures of restrictive fiscal policy are:

Reducing public procurement;

Increasing taxes;

Decrease in transfer payments.

According to the method of influencing the economy, discretionary fiscal policy and automatic fiscal policy are distinguished.

Discretionary (flexible) fiscal policy is a legislative manipulation of the value of government purchases, taxes and transfers in order to stabilize the economy. These changes are reflected in the main financial plan of the country - the state budget.

Automatic (non-discretionary) fiscal policy based on the action of built-in (automatic) stabilizers. Built-in stabilizers are economic instruments, the value of which does not change, but the very presence of which (their integration into the economic system) automatically stabilizes the economy. Built-in stabilizers automatically work in a restrictive way during an upturn in the economy and in a restraining way during a downturn in the economy. Automatic stabilizers include income taxes; indirect taxes; unemployment benefits and poverty benefits. Built-in stabilizers correct but do not eliminate fluctuations in economic activity. Therefore, methods of automatic fiscal policy should be supplemented by methods of discretionary policy.

The Keynesian model of economic equilibrium connects the stabilizing role of fiscal policy with its impact on the equilibrium volume of national production through changes in total spending. Let us consider the mechanism of action of fiscal policy on the equilibrium volume of national production through a simplified model of the economy, which assumes price stability; reduction of all taxes to a net individual tax; independence of investments from the value of national production and the absence of exports. Government spending directly affects the macroeconomic balance, since government spending is one of the elements of aggregate demand. Their increase has exactly the same effect on the equilibrium level of output as an increase in investment expenditures by the same amount:

where MP G is the government spending multiplier.

An increase in government spending causes an increase in total spending, increasing the equilibrium level of output and employment (14.2).

During a recession, an increase in government spending can be used to increase output, while during a period of economic overheating, on the contrary, a decrease in their level will reduce both aggregate demand and output.

Rice. 14.2. The impact of government spending on macroeconomic equilibrium.

The impact of taxes on macroeconomic equilibrium is not carried out directly, but indirectly through such an element of total expenditure as consumption. Therefore, the multiplier effect of taxes is lower than the multiplier effect of government spending:

where MP T is the tax multiplier.

Ceteris paribus, an increase in taxes will reduce consumer spending. The consumption schedule will shift down and to the right, which will lead to a reduction in national production and employment (Fig. 14.3.).

Rice. 14.3. The impact of taxes on macroeconomic equilibrium

An increase in government spending and taxes by the same amount leads to an increase in output. This effect is called balanced budget multiplier.

Fiscal policy is not able to fully stabilize the economy, as it has the following disadvantages:

1. The delayed impact of fiscal policy on the functioning of the national economy. There are gaps in time between the actual start of a recession or recovery, the moment of recognition, the moment decisions are made and the results are achieved.

2. The value of the multiplier at any given moment of time is not exactly known. Accordingly, it is also impossible to accurately calculate the results of fiscal policy.

3. Fiscal policy can be used for political purposes and condition political business cycles. Political business cycles are actions that destabilize the economy by cutting taxes and increasing government spending during election campaigns and by increasing taxes and reducing government spending after elections.

Basic concepts

Financial System Centralized Finance Decentralized Finance Budget System Principle of Fiscal Federalism State Budget State Budget Expenditures State Budget Revenues Budget Surplus Budget Deficit State Debt Domestic State Debt External State Debt Crowding Out Effect Tax Tax System Taxation Principles Subject of Taxation Object of Taxation

Direct taxes Indirect taxes Tax base Tax rate Tax incentives Tax burden Laffer curve Fiscal policy Restrictive fiscal policy Expansionary fiscal policy Discretionary fiscal policy Embedded stabilizers Government purchases multiplier Tax multiplier Balanced budget multiplier

Control and discussion questions

1. Between whom are there financial relations?

2. What are the main functions of finance.

3. What is meant by centralized finance?

4. What is the structure of the state budget? What types of public spending can be considered in terms of the problem of positive externalities? What is the compromise of the state budget?

5. Expand the concept of fiscal federalism.

6. What can be the state of the state budget? How to measure the government budget deficit? Expand the concept of balancing the budget deficit.

7. What is the best way to finance the budget deficit in an inflationary economy?

8. Why is domestic public debt called a debt to ourselves?

9. Why is high public debt dangerous?

10. What are the main difficulties in using the principle of solvency in the functioning of the modern tax system?

11. Why is corporate income tax linked to the problem of double taxation?

12. Which gives a more accurate idea of the tax burden: the marginal tax rate or the average tax rate?

13. Give examples of direct and indirect taxes.

14. What is the relationship between the growth of tax rates, state budget revenues and the tax base?

15. Can built-in stability be considered as a sufficient condition for the successful functioning of the fiscal system? Is there a need for discretionary policy?

16. If government spending and taxes increase at the same time by the same amount, what will happen to output?

17. Why are supporters of supply-side economics more focused on tax cuts when conducting stimulating fiscal policy than supporters of demand-side economics (Keynesians)?

Macroeconomic regulation of the economy includes two components:

1. Monetary policy (see earlier);

2. Fiscal policy of the state (fiscal policy) - a set of government measures to regulate public spending and taxation.

fiscal policy- this is state regulation of the economy, carried out by the government with the help of taxes and public spending. The purpose of fiscal policy is to accelerate economic growth; control over employment and inflation; counteraction to economic crises and their smoothing.

Leverage of fiscal policy:

1. Change in tax rates;

2. Change in the volume of public procurement;

3. Change in the volume of transfers.

Depending on the phase in which the economy is located, there are two types of fiscal policy:

1. Stimulating;

2. Restraining.

Stimulating (expansive) fiscal policy It is used during a decline in production, during high unemployment, with low business activity. It is aimed at increasing the volume of production and employment of the population through: 1. increasing government purchases and transfers, 2. reducing taxes.

Schematically, the effect of stimulus policy is as follows:

Action 1: Government purchases increase. As a result, aggregate demand rises and output increases.

2 action. Taxes are going down. As a result, the aggregate supply increases, while the price level decreases.

Restraining (restrictive) policy applied during an economic boom. It is aimed at curbing business activity, reducing the volume of production, eliminating excess employment, reducing inflation through:

1. Reducing government purchases and transfers;

2. Tax increases.

Schematically, the effect of a restraining policy is as follows:

1. Action: cut government purchases. As a result, aggregate demand decreases and output decreases.

2. Action. Taxes are increasing. As a result, the aggregate supply on the part of entrepreneurs and the aggregate demand on the part of households decrease, while the price level increases.

Depending on the method of impact of fiscal policy instruments on the economy, there are:

1. Discretionary fiscal policy;

2. Automatic (non-discretionary) fiscal policy.

Discretionary fiscal policy represents conscious legislative change government purchases (G) and taxes (T) in order to stabilize the economy. These changes are reflected in the state budget.

When working with the “public procurement” tool, a multiplier effect may occur. The essence of the multiplier effect is that the increase in state. spending in the economy leads to an increase in national income by b about greater value (multiplier multiplier expansion of national income).

The multiplier formula "state. purchases":

Y=1=1

G 1 - MPS MPS

where, ?Y - income growth; ?G - growth of state. procurement; MPC - marginal propensity to consume; MPS is the marginal propensity to save.

Hence? Y G = 1 ? ?G

The influence of taxes on the volume of national income is carried out through the mechanism of the tax multiplier. The tax multiplier has a much smaller effect on reducing aggregate demand than the government spending multiplier on increasing it. An increase in taxes leads to a reduction in GDP (national income), and a decrease in taxes - to its growth.

The essence of the multiplier effect is that with tax cuts, there is a multiple (multiplier) expansion of total income and planned spending on the part of consumers and an increase in investment in production on the part of entrepreneurs.

Tax multiplier formula:

Y = - MPC = - MPC

T MPS 1 - MPS

where, ?T - tax increase

Hence? Y T = - MRS ? ?T

Both instruments can be applied simultaneously (combined fiscal policy). Then the multiplier formula takes the form:

Y = ?Y G + ?Y T = ?G ? (1 - MPC) / (1 - MPC) = ?G ? one

A combined policy can lead to either a budget deficit (if the country is in an economic downturn) or a budget surplus (if the country is in an economic recovery).

The disadvantage of discretionary fiscal policy is that:

1. There is a time lag between decision-making and their impact on the economy;

2. There are administrative delays.

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 the automatic (passive, non-discretionary) 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.

Non-discretionary fiscal policy (automatic)- this is a policy based on the action of built-in stabilizers (mechanisms) that automatically soften fluctuations in the economic cycle.

Built-in stabilizers include:

1. Change 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 budget. 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 tax rates are also 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. 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. In the same automatic mode, the systems of indexation of income and social payments operate;

3. Fixed dividend system, farm assistance programs, corporate savings, personal savings, etc.

Built-in stabilizers dampen changes in aggregate demand and thus help stabilize national product output. It is thanks to their action that 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.

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.

To find out whether the fiscal policy pursued by the government is correct, it is necessary to evaluate its results. Most often, the state of the state budget is used for this purpose, since the implementation of fiscal policy is accompanied by an increase or decrease in budget deficits or surpluses.

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Plan

Introduction

Chapter 1. The concept of fiscal policy, its goals and tools

1.1 The concept of fiscal policy

1.2 Types of fiscal policy

1.3 Fiscal policy instruments

Chapter 2. The effectiveness of the fiscal policy of the state

2.1 Statement of the problem and research methodology

2.2 Economic methods for assessing the effectiveness of fiscal policy

2.3 Analytical methods for assessing the effectiveness of fiscal policy

Chapter 3. Features of fiscal policy in Russia

3.1 Strengths and weaknesses of fiscal policy

3.2 Prospects for the development of fiscal policy in the Russian state

Conclusion

List of used literature

Introduction

The main task of the state at all stages of its development is the stabilization of the economy. At the present time, the state is actively using instruments of intervention in the economy. The main 2 types of state intervention in the market economy include fiscal and monetary policy.

The purpose of this course work is to study the fiscal, or the so-called fiscal policy of the state. The role of fiscal policy in holistic economic management is great. As one of the most important instruments of state regulation of the economy, it directly forms the state budget, state cash income. In market conditions, fiscal policy is a core part of the state economic policy.

Fiscal policy, as the most important element of the state's financial policy, performs a number of important functions, such as mobilization and attraction of funds necessary for the functioning of the state, their distribution in order to solve the country's socio-economic problems.

The theoretical basis of fiscal policy is well developed. But this area of economic science has not exhausted itself. Many controversial and unresolved problems of the implementation of fiscal policy, its impact on the development of the state require further improvement and solutions. In the past, for a long time, fiscal policy was considered by economists only from the aspect of the proportions of the distribution of a country's output.

The relevance of the study of fiscal policy led to the choice of the topic of this course work. In a market economy, it is especially important to know the essence, functions, types and instruments of fiscal policy, as well as the mechanism of its action for a more correct orientation in the current situation in the country in order to make the right managerial decision.

The purpose of our work was to study the mechanism for implementing the fiscal policy of the state.

The main objectives of this course work are the study of:

The essential characteristics of fiscal policy,

Types of fiscal policy,

fiscal policy instruments,

The effectiveness of the state's fiscal policy

Given the relevance of the study of fiscal policy, it is not surprising to note that this topic was studied by many economists, who in their own way answered the question about the essence of fiscal policy, the impact of its tools on the economic situation in the state. Practically in all textbooks, much attention is paid to the problems of fiscal policy, the mechanisms of its functioning.

When working on the topic of this course work, the works of foreign and domestic authors devoted to the financial policy of the state, textbooks, articles in economic journals and newspapers, statistical data, as well as materials from Internet sites were used.

Chapter 1. The concept of fiscal policy, its goals and tools

1.1 The concept of fiscal policy

Fiscal policy is a system of regulation related to government spending and taxes. Government spending refers to the cost of maintaining the institution of the state, as well as government purchases of goods and services. These can be various types of purchases, for example, construction of roads, schools, medical institutions, cultural facilities, purchases of agricultural products, foreign trade purchases, purchases of military equipment, etc. at the expense of the budget. The main distinguishing feature of all these purchases is that the consumer is the state itself. Usually, when talking about government purchases, they are divided into two types: purchases for the state's own consumption, which are more or less stable, and purchases for market regulation.

Government spending plays a significant role in the socio-economic development of society. The large deficit of the state budget that has developed in Russia exceeds reasonable limits and leads to a financial imbalance of the national economy. Therefore, the issue of increasing the efficiency of public expenditures, giving them a regulatory role in ensuring the stability of socio-economic development, and shaping a new quality of economic growth is very relevant.

It should be emphasized that any state, regardless of its political system, pursues one or another fiscal policy, since for its existence and functioning it needs financial resources that it receives from taxes. But the main task of fiscal policy is not so much to ensure a balanced budget as to balance the macroeconomic system. With insufficient private spending, an increase in government spending is necessary to maintain aggregate demand. Consumer expenditures of the population, expenditures of enterprises on investments are made by separate entities and are not always mutually compatible with each other. Fiscal policy allows you to adjust the dynamics of GNP in the desired direction.

The policy of public spending and taxes is one of the most important instruments of state regulation of the economy aimed at stabilizing economic development. Government spending and taxes have a direct impact on the level of total spending, and hence on the volume of national production and employment. In this regard, the well-known Western economist J. Galbraith noted that the tax system began to turn from an instrument for increasing government revenues into an instrument for regulating demand, which, in his opinion, is an organic need of the industrial system. fiscal spending economic

Fiscal policy is a fairly strong tool in the fight against the negative phenomena of the cyclical nature of economic development. In essence, 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. But keep in mind that no tool in the economy is 100% perfect.

The fiscal state affects the increase or decrease in national production by varying tax rates and public spending. The theoretical substantiation of these actions was the calculations of the American economist A. Laffer, who proved that the result of tax cuts is an economic recovery and an increase in state revenues (Laffer curve).

Graphically, the Laffer curve looks like this (Fig. 1).

Figure 1- Laffer Curve

The abscissa on this graph shows the interest rate r, and the ordinate shows the amount of tax revenues R. If r=0, the state will not receive any tax revenues. As soon as r = 100%, all incentives for production completely disappear (because all incomes of producers are withdrawn), that is, the result for the state is similar - zero. For any other values (r<0<100%) государство налоговые поступления в том или ином размере получает. При каком-то конкретном значении ставки (r=r0) общая сумма этих поступлений становится максимальной (R0=Rmax). Отсюда вытекает следующий вывод: рост процентной ставки только до определенного значения (r=r0) ведет к увеличению налоговых поступлений, дальнейшее же ее повышение обусловливает, напротив, их уменьшение. Так, R0>R1, R0>R2.

The general properties of the Laffer curve can be characterized as follows: since when the tax pressure is relaxed, some subjects of production begin to work more intensively, maximizing their income, while others achieve the desired value of the latter with less effort, the curve under consideration is flat and relatively weakly responds to minor changes in tax rates. . In addition, the reaction of economic entities to the dynamics of these rates does not appear instantly, but after a certain time interval.

The Laffer curve reflects the objective dependence of government revenue growth on lower tax rates. At the same time, it is impossible to theoretically reveal the value of r0, it is determined empirically. In this case, it is extremely important to identify where the actual tax rate is - to the right or to the left of r0. And since radical macroeconomic experiments are fraught with serious shocks, this question is usually answered on the basis of an analysis of the reaction of producers to tax breaks in certain specific industries.

1.2 Types of fiscal policy

Fiscal (fiscal policy) is a system for regulating the economy through changes in government spending and taxes.

There are discretionary and automatic forms of fiscal policy. Discretionary policy refers to the maneuvering of taxes and government spending in order to change the real volume of national production, control the level of employment and the rate of inflation. This form of fiscal policy is opposed by its automatic form. "Automatism" is a "built-in stability" based on the provision of budget revenues by the tax system, depending on the level of economic activity.

Automatic fiscal policy. Automatic fiscal policy is an economic mechanism that makes it possible to reduce the amplitude of cyclical fluctuations in employment and output without resorting to frequent changes in the government's economic policy. Its built-in stabilizers, which are income taxes, unemployment benefits, spending on retraining programs for workers, etc., are in principle necessary, they reduce the amplitude of fluctuations during the economic cycle. For example, if the economy is in a recession, the marginal tax rate is reduced due to a decrease in taxable income; disposable income will be smaller also because social payments are increasing. At the same time, disposable income is reduced to a lesser extent compared to pre-tax income. Marginal power to consume in a downturn increases, as those who receive unemployment benefits use it almost entirely for consumption. If the economy is in an upturn, disposable income does not increase to the same extent as total pre-tax income because tax rates rise and social transfers fall. Another advantage of automatic stabilizers is that they reduce income inequality. Progressive income tax and transfer payments are tools to redistribute income in favor of the poor. In addition, stabilizers are already built into the system, no decision is required from either the legislature or the executive branch to put them into action. Their essence lies in linking tax rates with the amount of income received. Almost all taxes are structured in such a way that they allow for the growth of tax revenues with an increase in net national product. This applies to personal income tax, which is progressive in nature; income tax; value added; sales tax, excise.

Figure 2 shows the built-in stabilizers. On it, the size of government spending is constant. In fact, they are changing. But these changes depend on the decisions of the parliament and the government, and not on the growth of GNP. Therefore, the graph does not show a direct relationship between government spending and the increase in NNP. Tax revenues rise during a boom. This is because sales and revenues are increasing. Withdrawal of a part of income by taxes constrains rates of economic growth and inflation. As a result of the acting forces, in addition to the efforts of the government, the overheating of the economy due to imbalances during the recovery is prevented.

Figure 2 - Built-in stabilizers, where: G - government spending; T - tax revenues

During this period, tax revenues exceed government spending (T>G). There is a surplus - a surplus of the state budget, which allows you to pay off government debt obligations taken during the depressed period of the economy.

The graph also shows the fall in tax revenues during the period when NNP decreases, i.e., production falls, which leads to the formation of a state budget deficit (G>T). If the volume of tax revenues had remained at the same level during the economic crisis, the economic environment for business would have meant higher economic risks, which provoked further curtailment of production. This means that the decrease in tax revenues during this period objectively protects society from the growth of the crisis and weakens the decline in production.

Built-in stabilizers do not eliminate the causes of cyclic fluctuations, but only limit the scope of these fluctuations. Therefore, built-in economic stabilizers are usually combined with government discretionary fiscal policy measures aimed at ensuring full employment of resources.

Discretionary fiscal policy includes the regulation of government spending and taxes in order to eliminate cyclical fluctuations in output and employment, stabilize prices, and stimulate economic growth. In the United States, the 1946 Employment Act and the 1978 Lamprey-Hawkins Act make the federal government responsible for providing full employment through the use of monetary and fiscal policy. This task is extremely difficult for many reasons, not least because public funds are spent on many programs, not only to stabilize the economy and ensure economic growth, for example, social security programs, strengthening the country's road network, flood control , improving education, replacing old and dangerous bridges, protecting the environment, basic research.

There are two types of discretionary policy:

stimulating,

Restraining.

Stimulating fiscal policy is carried out during a recession, depression, includes an increase in government spending, tax cuts and leads to a budget deficit.

In the short term, it aims to overcome the cyclical downturn in the economy and involves an increase in government spending, tax cuts, or a combination of these measures.

In the longer term, tax cut policies can expand the supply of factors of production and increase economic potential.

The implementation of these goals is associated with the implementation of a comprehensive tax reform, accompanied by a restrictive monetary policy of the Central Bank and a change in the optimization of the structure of public spending.

A contractionary fiscal policy is carried out during a boom and inflation period, includes reducing government spending, raising taxes and leads to a surplus of the state budget.

It aims to limit the cyclical recovery of the economy and involves reducing government spending, increasing taxes, or a combination of these measures.

In the short term, these measures reduce demand-pull inflation at the cost of rising unemployment and a decline in production. In the longer term, a growing tax wedge can serve as the basis for a decline in aggregate supply and the deployment of a stagflation mechanism (a recession, or a significant slowdown in economic development), especially when government spending is cut proportionally across all budget items and priorities are not created in favor of public investment in labor market infrastructure.

Both discretionary and automatic fiscal policies play an important role in the stabilization measures of the state, but neither one nor the other is a panacea for all economic ills. As for automatic policy, its built-in stabilizers can only limit the scope and depth of fluctuations in the economic cycle, but they are not able to completely eliminate these fluctuations.

Even more problems arise in the conduct of discretionary fiscal policy. These include:

The presence of a time lag between decision-making and their impact on the economy;

administrative delays;

Predilection for stimulus measures (tax cuts are politically popular, but tax increases can cost parliamentarians their careers).

The judicious use of instruments of both automatic and discretionary policies can significantly influence the dynamics of social production and employment, reduce inflation and solve other economic problems.

1.3 Fiscal policy instruments

The fiscal policy toolkit includes government subsidies, the manipulation of various types of taxes (personal income tax, corporate tax, excises) by changing tax rates or lump-sum taxes. In addition, fiscal policy instruments include transfer payments and other types of government spending. Different tools affect the economy in different ways. For example, an increase in the lump-sum tax reduces total spending but does not change the multiplier, while an increase in personal income tax rates will cause both total spending and the multiplier to decrease. The choice of different types of taxes - personal income tax, corporation tax or excise tax - as an instrument of influence has a different impact on the economy, including incentives that affect economic growth and economic efficiency. The choice of a particular type of public expenditure is also important, since the multiplier effect may be different in each case. For example, there is an opinion among economic policy specialists that defense spending provides a smaller multiplier than other types of government spending.

Depending on the phase of the cycle in which the economy is located, and the type of fiscal policy corresponding to it, the instruments of the state's fiscal policy are used in different ways. Thus, the instruments of stimulating fiscal policy are:

increase in government purchases;

tax cuts;

increase in transfers.

The instruments of contractionary fiscal policy are:

reduction in public procurement;

increase in taxes;

reduction in transfers.

A slightly different list of fiscal policy instruments is presented in the textbook "Economics" by Academician G.P. Zhuravleva. According to this source of literature, the tools of discretionary fiscal policy are public works, changing transfer payments, and manipulating tax rates.

The author of this textbook refers to the instruments of automatic fiscal policy as changes in tax revenues, unemployment benefits and other social payments, and subsidies to farmers.

Analyzing the sources of literature, one can come to the conclusion that the main instruments of fiscal policy are changes in taxes and transfer payments.

One of the main instruments of fiscal policy is taxes, which are funds forcibly withdrawn by the state or local authorities from individuals and legal entities necessary for the state to carry out its functions.

Taxes perform three main functions:

fiscal, consisting in the collection of funds for the creation of state funds and material conditions for the functioning of the state;

economic, involving the use of taxes as a tool for redistributing national income, influencing the expansion or restraint of production, stimulating producers in the development of various types of economic activity;

social, aimed at maintaining social balance by changing the ratio between the incomes of individual social groups in order to smooth out the inequality between them.

In the modern economy, there are various types of taxes.

Direct taxes are taxes on the income or property of taxpayers. In turn, direct taxes are subdivided into real ones, which became most widespread in the first half of the 19th century, and which include land, house, trade, tax on securities;

personal, including income, taxes on corporate profits, on capital gains, on excess profits.

Indirect taxes consist of excises, value added taxes, sales taxes, turnover, customs duties.

Depending on the authority at the disposal of which certain taxes are received, there are state and local taxes. In Russian conditions, these are federal, taxes of the subjects of the federation, local.

Depending on the use, taxes are divided into:

general, intended to finance the current and capital expenditures of the budget, without being assigned to any particular type of expenditure;

special taxes with special purpose.

Depending on the nature of the rates, taxes are distinguished:

solid (fixed) fixed in absolute amount per unit of taxation, regardless of various economic indicators associated with business activity;

regressive, in which the percentage of income withdrawal decreases with increasing income;

proportional, manifested in the fact that regardless of the amount of income, the same rates apply;

progressive, in which the percentage of withdrawal increases as income increases.

A group of American specialists led by A. Laffer studied the dependence of the amount of tax revenues to the budget on income tax rates. This dependence is reflected by the Laffer curve.

Tax rates are set as a percentage that determines the proportion of income withdrawn. Up to a certain increase in the tax rate, incomes grow, but then they begin to decline. As the tax rate rises, the desire of enterprises to maintain high production volumes will begin to decrease, the income of enterprises will decrease, and with them the tax revenues of enterprises. Consequently, there is such a value of the tax rate at which tax revenues to the state budget will reach the maximum value. It is advisable for the state to set the tax rate at this value. Laffer's group has theoretically proven that a tax rate of 50% is optimal. At this rate, the maximum amount of taxes is reached. With a higher tax rate, the business activity of firms and employees is sharply reduced, and then incomes flow into the shadow economy.

However, in many states tax rates are much higher than the optimal level, and this is due to other factors that are not taken into account in the theoretical model. For example, in countries gravitating toward strong state regulation, the desire to increase the budget through the revenue side will prevail. Tax rates in such countries are high. Conversely, if a country gravitates towards a liberal market system, towards minimal state intervention in the economy, tax rates will be lower. In addition, the desire to have a socially oriented economy and direct a significant part of budgetary allocations to social assistance does not allow for a significant reduction in tax rates - in order to avoid a lack of budgetary funds for social needs. High tax rates in the Russian economy are primarily due to the budget deficit, the lack of public funds for the implementation of socio-economic programs and the weak hope that lower tax rates will lead to increased production and economic recovery. In order to somehow alleviate the tax burden for individual taxpayers, tax incentives are applied - a form of lowering tax rates or, in the extreme case, tax exemption. Sometimes tax incentives are used as an incentive based on the fact that a tax reduction is adequate to provide the taxpayer with additional funds equal to the amount of the reduction. The problem of choosing and assigning rational tax rates is faced by any state.

Obviously, the higher the taxes, the less income the subject will have, which means less buying and saving. Therefore, a reasonable tax policy involves a comprehensive consideration of those factors that can stimulate or hinder economic development and the welfare of society.

Such an instrument of the state's fiscal policy as taxes is closely related to another instrument of fiscal policy - public spending. Funds withdrawn in the form of taxes go to the state budget, subsequently spent on various purposes of the state. In the conditions of the current legislation of the Russian Federation, the main part of the budget is filled at the expense of payments from taxpayers - legal entities.

At present, the point of view about the need for an additional significant reduction in tax rates for basic taxes has become widespread. In support of this, the authors point out that despite the temporary drop in tax revenues, in the long term, investment conditions will improve, the production of goods and services will increase, employment will increase, and, due to the growth of the tax base, state revenues will begin to grow.

State or government spending refers to the cost of maintaining the institution of the state, as well as government purchases of goods and services.

Public procurement of goods and services can be of various types: from the construction of schools, medical institutions, roads, cultural facilities at the expense of the budget to the purchase of agricultural products, military equipment, samples of unique products. This also includes foreign trade purchases. The main distinguishing feature of all these purchases is that the state itself is the consumer. Usually speaking about government purchases, they are divided into two types: purchases for the state's own consumption, which are more or less stable, and purchases for market regulation.

The state increases its purchases during periods of recession and crisis and reduces during periods of recovery and inflation in order to maintain the stability of production. At the same time, these actions are aimed at regulating the market, maintaining a balance between supply and demand. This goal is one of the most important macroeconomic functions of the state.

Government spending plays a significant role in the socio-economic development of society. Hence, they are objectively necessary, and at the same time, exceeding reasonable limits by them can lead to financial instability in the national economy, an excessive deficit of the state budget.

Government spending takes the form of:

state order, which is distributed on a competitive basis;

construction at the expense of capital investments;

defense spending, management, etc.

The bulk of government spending goes through the state budget, which includes the budgets of the federal government and local authorities.

The state budget is an annual plan of public expenditures and sources of their financial coverage (revenues). In modern conditions, the budget is also a powerful lever of state regulation of the economy, influencing the economic situation, as well as the implementation of anti-crisis measures.

The state budget is a centralized fund of monetary resources, which the government of the country has to maintain the state apparatus, the armed forces, as well as perform the necessary socio-economic functions.

Expenses show the direction and purpose of budget allocations and perform the functions of political, social and economic regulation. They are always targeted and, as a rule, irrevocable. The irrevocable provision of public funds from the budget for targeted development is called budget financing. This mode of spending financial resources differs from bank lending, which involves the repayment nature of the loan. It should be noted that the irrevocable provision of financial resources does not mean arbitrariness in their use. Every time when financing is used, the state develops the procedure and conditions for using money for the targeted direction and ensuring overall economic growth and improving the life of the population.

The structure of public spending in each country has its own characteristics. They are determined not only by national traditions, the organization of education and healthcare, but mainly by the nature of the administrative system, the structural features of the economy, the development of defense industries, the size of the army, etc.

Government transfers, being one of the instruments of fiscal policy, are payments by government bodies that are not related to the movement of goods and services. They redistribute state revenues received from taxpayers through benefits, pensions, social insurance payments, etc. Transfer payments have a lower multiplier than other government spending because some of these amounts are saved. The transfer payment multiplier is equal to the government spending multiplier times the marginal capacity to consume. The advantage of transfer payments is that they can be directed to certain groups of the population. Social transfers (pensions, scholarships, various allowances) are included in the average income, and these payments can increase the family budget by 10-12%.

Fiscal policy instruments influence the economic situation in their own way, helping to achieve the goals set for fiscal policy. The main instruments of the state's fiscal policy are changes in taxes and transfer payments. Fiscal policy instruments are interrelated and their role in the implementation of a particular government policy is great.

Chapter 2. Efficiencyfiscal policy of the state

2.1 Statement of the problem and research methodology

Recently, many studies have been carried out in which an attempt is made to evaluate the effectiveness of certain aspects of the fiscal system by finding Laffer points for specific types of tax collections.

At the same time, the concept of the Laffer curve was originally created in relation to the concept of the total tax burden, that is, the entire mass of tax deductions. Further, we adhere to just such an understanding of the problem and, therefore, we will look for Laffer points for the average macroeconomic indicator of the tax burden. By the latter we mean the share of tax revenues in the country's consolidated budget in the volume of gross domestic product (GDP).

Our study is based on the assumption that the volume of production X, reflected by the value of GDP, depends on the level of the tax burden

where T is the amount of tax revenues to the country's budget.

Dependence X(q) is approximated by a non-linear function, the parameters of which are to be quantified. The identification of the function X(q) will allow us to calculate the Laffer points. In this case, we will distinguish between the Laffer points of the first and second kind. Let us give the corresponding definitions.

The Laffer point of the first kind is the point q* at which the production curve X=X(q) reaches a local maximum, i.e. when the following conditions are met:

dX(q*)/dq=0; d2X(q*)/dq 2<0.

The Laffer point of the second kind is the point q** at which the fiscal curve T=T(q) reaches a local maximum, i.e. when the following conditions are met:

dT(q**)/dq=0; d2T(q**)/dq 2<0.

Economically, the Laffer point of the first kind means the limit of the tax burden at which the production system does not go into recession. The Laffer point of the second kind shows the magnitude of the tax burden, beyond which an increase in the mass of tax revenues becomes impossible.

The identification of two Laffer points and their comparison with the actual tax burden makes it possible to assess the effectiveness of the country's tax system and the direction of its optimization. Let's consider some approaches by which the task can be solved.

2.2 Economic methods for assessing the effectiveness of fiscal policy

In the general case, the problem can be solved by econometric methods, which are based on the postulate that the volume of production depends non-linearly on the magnitude of the tax burden. In this case, it is sufficient to approximate the volume of GDP by a polynomial regression of the following form:

where b i - parameters subject to statistical evaluation based on retrospective time series.

Taking into account formula (1) and the value of the mass of taxes :

we can write the following relation:

To carry out the corresponding calculations, the entire information array must be represented by time series of two "primary" indicators - X and T. Knowing these values, formula (2) can be used to calculate a retrospective series for such a "secondary" indicator as q. Later, as a result of computational experiments, a polynomial (1) of the corresponding degree is found. It is desirable that this be a quadratic or, in extreme cases, a cubic function, since a higher order of the polynomial will subsequently complicate the search for Laffer points.

Given the specifics of series smoothing operations, econometric models of type (1) have a number of obvious features. First, to obtain the values of the parameters b i, it is necessary to have sufficiently long and "good" time series in the statistical sense. Secondly, the parameters b i are constant in time, which in some cases leads to the invariance of the values of the Laffer points. This is not entirely legitimate, since it would be more logical to assume that the Laffer points are "floating" quantities in time.

Commenting on the approach proposed above, which is based on a primitive polynomial approximation of the economic growth process by the tax function (1), one should immediately make a reservation: in this case, a purely technical, instrumental problem is being solved without taking into account intrasystem economic relations. Explicit modeling of the functional properties of the system is not carried out, however, they are indirectly captured by dependence (1). At the same time, although the functional dependence (1) itself is non-linear, regression (1), on the contrary, is linear with respect to the parameters included in it and, therefore, no special technical difficulties arise in its identification. This is one of the significant advantages of the proposed model scheme.

2.3 Analytical methods for assessing the effectiveness of fiscal policyAndki

Given that the Russian economy has not yet formed a retrospective time series sufficient to conduct correct econometric calculations, it is possible to use other methods for assessing the effectiveness of fiscal policy. Such alternative approaches include methods for point-piece approximation of the analyzed process using a power function, which fundamentally differ from econometric methods based on interval approximation. In this case, for each reporting point, its own function X=X(q) is constructed with the corresponding values of the parameters included in it. Since the number of function parameters can be more than one, for their unambiguous assessment it is necessary to use additional information about the increments of variables over time. Considering the nonlinearity of the relationship between the volume of production and the level of the tax burden, a quadratic polynomial should be taken as an approximating function. Two calculation options are possible here: a generalized three-parameter and a simplified two-parameter. Let's consider them in more detail.

1. Three-parameter method. This method is based on the approximation of the process of economic growth by a three-parameter quadratic function, where the level of the tax burden acts as an argument:

where a, b and g are the parameters to be evaluated.

Then, in accordance with (2), the amount of tax revenues is determined as follows:

At each point in time, the volume of GDP depends on the level of the tax burden, and the nature of this dependence is given by formula (4). However, for the unambiguous determination of the three parameters a, b and g, relation (4) is not enough, and therefore it is necessary to compose two more equations that include these parameters. Such equations can be written by passing from functions (4) and (5) to their differentials:

When passing from (4) and (5) to relations (6) and (7), we used the assumption that the differentials of the variables X and q are satisfactorily approximated by finite differences: dX~D X; dT~DT; dq~Dq . Such an assumption is traditional for computational mathematics and for the case under consideration seems to be quite legitimate. Then, in applied calculations, the indicators D X, D T and D q mean the increase in the corresponding values for one time interval (year) between two reporting points, i.e.

where t is the time (year) index.

Thus, equation (4) describes "point" economic growth, i.e., at a specific point in time t, while equations (6) and (7) reproduce "interval" growth in output and tax revenues for the period between the current (t) and subsequent (t+1) reporting points. In accordance with this approach, equations (4) and (5) define families of production and fiscal curves, and relations (6) and (7) fix their curvature, thereby allowing the desired functional dependencies to be selected from the indicated families.

Such a calculation scheme is based on the construction of a system of equations (4), (6), and (7) and its solution with respect to the parameters a, b, and g, which makes it possible to characterize this scheme as analytical or algebraic. The solution of system (4), (6), (7) gives the following formulas for the estimated parameters:

The identification of the parameters of functions (4) and (5) allows one to elementarily determine the Laffer points. In this case, the Laffer point of the first kind q*, when dX/dq = 0, is determined by the formula

and the Laffer point of the second kind q**, when d2T/dq 2=0, is found as a result of solving the following quadratic equation

and finally calculated by the formula

An additional study of the properties of functions (4) and (5) will make it possible to determine whether the found stationary points are Laffer points. If the stationary points turn out to be local minimum points or their values go beyond the range of permissible values, then there are no Laffer points.

An alternative to the considered three-parameter method can be an approach based on the use of a truncated polynomial of the third degree as a production function:

The number of parameters does not change, remaining equal to three. In this case, the procedure for finding Laffer points is corrected taking into account the initial cubic dependence, and stationary points for the fiscal curve will be found as a result of solving the cubic equation. It is clear that such an algorithm can generate two Laffer points of the second kind. In our opinion, due to the greater unambiguity and visibility in practice, the first, basic version of the three-parameter method should be used.

It should be noted that the analytical method for assessing the effectiveness of fiscal policy makes it possible to use functional dependencies with the number of parameters not exceeding three. A larger number of parameters requires the addition of additional equations to the basic system (4), (6), (7), which is impossible due to the narrow formulation of the original problem.

2. Two-parameter method. This method is based on the approximation of the economic growth process by a truncated quadratic function, which includes only two parameters:

Then the sum of fiscal receipts is equal to

An additional restriction imposed on the functional properties of the production system is given by an equation similar to (6):

The constructed system of equations (14), (16) is sufficient for finding the parameters b and g . As in the case of using the three-parameter method, equation (14) reproduces the "point" properties of the production system, and equation (16) - "interval". At the same time, there is no auxiliary equation that specifies the dynamic properties of the fiscal system; by default, it is assumed that the amount of taxes received is completely determined by the activity of the production system and the level of fiscal pressure.

Formulas for estimating parameters based on solution (14), (16) have the form

The Laffer points of the first and second kind are determined from (14) and (15) according to the corresponding formulas:

An analysis of the second-order conditions shows the following: in order for the stationary points (19) and (20) to be really Laffer points, it is necessary and sufficient that two inequalities hold: b > 0 and g<0.

Chapter 3. Features of fiscal policy in Russia

In a market economy, there are certain mechanisms of self-organization and self-regulation that come into effect immediately as soon as negative processes in the economy are revealed. They are called built-in stabilizers. The principle of self-regulation that underlies these stabilizers is similar to the principle on which an autopilot or refrigerator thermostat is built. When the autopilot is on, it maintains the aircraft's heading automatically based on incoming feedback. Any deviation from the set course due to such signals will be corrected by the control device. Similarly, economic stabilizers work, thanks to which automatic changes in tax revenues are carried out; payment of social benefits, in particular for unemployment; various government programs to help the population, etc.

How does the self-regulation, or automatic change, of tax revenues take place? A progressive tax system is built into the economic system, which determines the tax depending on income. As incomes rise, tax rates increase progressively, which are approved by the government in advance. With an increase or decrease in income, taxes automatically increase or decrease without any intervention by the government and its governing and control bodies. Such a built-in stabilization system of levying taxes is quite sensitive to changes in the economic situation: during periods of recession and depression, when the incomes of the population and enterprises fall, tax revenues automatically decrease as well. On the contrary, during periods of inflation and boom, nominal income rises, and therefore taxes automatically increase.

In the economic literature, there are different points of view on this issue. A hundred years ago, many economists spoke in favor of the stability of tax collections, because, in their opinion, it contributes to the stability of the economic situation of society. At present, there are many economists who hold the opposite point of view and even declare that the objective principles underlying the built-in stabilizers should be preferred to the incompetent intervention of state authorities, which are often guided by subjective opinions, inclinations and preferences. At the same time, there is also an opinion that one cannot fully rely on automatic stabilizers, since in certain situations they may respond inadequately to the latter, and therefore need to be regulated by the state.

Payments of social assistance benefits to the unemployed, the poor, families with many children, veterans and other categories of citizens, as well as the state program to support farmers, the agro-industrial complex are also carried out on the basis of built-in stabilizers, because most of these payments are realized through taxes. And taxes, as you know, grow progressively along with the incomes of the population and enterprises. The higher these incomes, the more tax deductions to the fund to help the unemployed, pensioners, the poor and other categories in need of state assistance are made by enterprises and their employees.

Despite the significant role of built-in stabilizers, they cannot completely overcome any fluctuations in the economy. With significant fluctuations in the economic system, more powerful state regulators are activated in the form of discretionary fiscal and monetary policy.

Discretionary fiscal policy also provides for additional spending on social needs. Although unemployment benefits, pensions, benefits for the poor and other categories of people in need are regulated using built-in stabilizers (increase or decrease as income-based taxes come in), nevertheless, the government can implement special programs to help these categories of citizens during difficult times of economic development. .

Thus, we come to the conclusion that an effective fiscal policy should be based, on the one hand, on self-regulation mechanisms embedded in the economic system, and on the other hand, on careful, cautious discretionary regulation of the economic system by the state and its governing bodies. Consequently, the self-organizing regulators of the economy must function in concert with the conscious regulation organized by the state.

Generally speaking, the entire experience of the development of a market economy, especially of our century, indicates that in the development of the economy and other systems of social life, self-organization must go hand in hand with organization, i.e. conscious regulation of economic processes by the state.

However, such regulation is not easy to achieve. Let's start with the fact that it is necessary to predict a recession or inflation in a timely manner, when they have not yet begun. It is hardly advisable to rely on statistical data in such forecasts, since statistics sum up the past, and therefore it is difficult to determine future development trends from it. A more reliable tool for predicting the future level of GDP is the monthly analysis of leading indicators, which is often referred to by politicians in developed countries. This index contains 11 variables that characterize the current state of the economy, including the average length of the working week, new orders for consumer goods, stock market prices, changes in orders for durable goods, changes in the prices of certain types of raw materials, etc. It is clear that if, for example, there is a shortening of the working week in the manufacturing industry, orders for raw materials decrease, orders for consumer goods decrease, then with a certain probability a decline in production can be expected in the future.

However, it is rather difficult to determine the exact time when the recession will occur. But even under these conditions, it will be a long time before the government takes appropriate measures. In addition, in the interests of the upcoming election campaign, it can implement such populist measures that will not improve, but only worsen the economic situation. All such non-economic factors will run counter to the need to achieve production stability.

3.1 Strengths and weaknesses of fiscal policy

The advantages of fiscal policy include:

1. Multiplier effect. All fiscal policy instruments, as we have seen, have a multiplier effect on the equilibrium aggregate output.

2. No external lag (delay). The external lag is the period of time between the decision to change the policy and the appearance of the first results of the change. When the government decides to change the instruments of fiscal policy, and these measures come into effect, the result of their impact on the economy appears quite quickly.

3. The presence of automatic stabilizers. Since these stabilizers are built-in, the government does not need to take special measures to stabilize the economy. Stabilization (smoothing of cyclic fluctuations in the economy) occurs automatically.

Disadvantages of fiscal policy:

1. The effect of crowding out. The economic meaning of this effect is as follows: an increase in budget expenditures during a recession (an increase in government purchases and/or transfers) and/or a reduction in budget revenues (taxes) leads to a multiplicative increase in total income, which increases the demand for money and raises the interest rate on money. market (loan price). And since loans are primarily taken by firms, the rise in the cost of loans leads to a reduction in private investment, i.e. to "crowding out" part of the investment costs of firms, which leads to a reduction in output. Thus, part of the total output is "crowded out" (underproduced) due to a reduction in the amount of private investment spending as a result of an increase in the interest rate due to the government's stimulating fiscal policy.

2. The presence of an internal lag. The internal lag is the period of time between the need to change the policy and the decision to change it. Decisions to change the instruments of fiscal policy are made by the government, but their implementation is impossible without discussion and approval of these decisions by the legislative body (Parliament, Congress, State Duma, etc.), i.e. giving them the force of law. These discussions and agreements may require a long period of time. In addition, they only come into effect starting from the next fiscal year, further increasing the lag. During this period of time, the situation in the economy may change. So, if initially there was a recession in the economy, and measures of stimulating fiscal policy were developed, then at the time they begin, the economy may already begin to rise. As a result, additional stimulus can lead the economy to overheat and provoke inflation, i.e. have a destabilizing effect on the economy. Conversely, contractionary fiscal policies designed during the boom may exacerbate the recession due to the presence of a long internal lag.

3. Uncertainty. This shortcoming is typical not only for fiscal, but also for monetary policy. Uncertainty concerns:

· Problems in identifying the economic situation It is often difficult to pinpoint, for example, the point at which a recession ends and a recovery begins, or the point at which a recovery turns into overheating, etc. Meanwhile, since it is necessary to apply different types of policies (stimulating or restraining) at different phases of the cycle, an error in determining the economic situation and choosing the type of economic policy based on such an assessment can lead to destabilization of the economy;

...

Fiscal policy of the state. Fiscal policy 1 fiscal policy

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3.1 Strengths and weaknesses of fiscal policy

The advantages of fiscal policy include:

1. Multiplier effect. All fiscal policy instruments, as we have seen, have a multiplier effect on the equilibrium aggregate output.

3. The presence of automatic stabilizers. Since these stabilizers are built-in, the government does not need to take special measures to stabilize the economy. Stabilization (smoothing of cyclic fluctuations in the economy) occurs automatically.

Disadvantages of fiscal policy:

3. Uncertainty. This shortcoming is typical not only for fiscal, but also for monetary policy. Uncertainty concerns:

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