The tax burden is the loss of a part of net profitfor society in connection with the decline in the level of industrial production and, accordingly, consumption of goods below the optimal point due to the introduction of new or higher rates of existing taxes.
The concept of "tax burden"introduction of taxes. In the 18th century Adam Smith conducted a study of the economic dependence between the receipt of funds in the state budget and the level of the tax burden. As a result, an axiom has been obtained, which states that the state will continue to benefit from the reduction of the tax burden, as the released funds appear, from the investment of which it is possible to obtain additional profit and, accordingly, an additional tax.
Quantification of this indicatoreconomists have tried to give long ago. For the first time it was possible to the German economist F. Justi, who was given the definition of this term at the macro level and is represented by the ratio between the state budget and the national income of the same state.
The tax burden is of great importance for the economy and consists in the following:
- This indicator is used when compared with the corresponding indicator of other countries, which results in the decision to implement certain tax reforms.
- The tax burden is actively usedState in the development of appropriate policies. When introducing new taxes, changing their rates, making changes to tax benefits, the state constantly monitors the results of the changes introduced, in case of a negative impact on the economy, the government should react accordingly.
- This indicator can be used as an indicator of the behavior of business entities. It is from its magnitude that the ability of an enterprise to expand its production or invest investments depends.
- At the national level, the tax burdenIt is used for social policy of the state. It is guided by its importance, the state can evenly distribute it among different social groups.
When calculating the tax burden, the business entity, in addition to the amount of taxes paid, also takes into account the costs that affect the receipt of these taxes. They include:
- expenses for payment of wages to the personnel of the organization;
- payment of interest on borrowed funds;
- production costs;
- costs of property insurance, etc.
Since the tax burden affects absolutely all economic processes in the state, it is monitored at the micro- and macrolevels.
At the micro level, this indicator is calculatedfor each specific taxpayer (this can be either a business entity - an enterprise or a common citizen). For the enterprise, the tax burden can be calculated in several ways. One of them is the ratio of the amount of taxes paid to the total amount of sales. The disadvantage of this algorithm is the failure to take into account the costs. The second formula, which uses net profit instead of sales, is clearer and takes into account all factors that affect simple income.
When determining the tax burden of a common citizen, the ratio of income tax (PIT) to its total income is used.
At the macro level, this indicator is calculated using the ratio of all taxes received to GDP.
Summarizing the above, one can dothe following conclusion: an excessive tax burden - loss of public benefits caused by the implementation of tax policies that lead to a decline in many economic indicators in the state.</ p>