Wealthy Idlers' Tax: Economist Commends the Practice
Interrogating the Controversial Idea of Taxing Unproductive Wealth in Russia
Economist and financial communications guru, Andrei Loboda, has voiced his objections to the idea of taxing idle wealthy Russians, in an interview with Gazeta.Ru. He argues that during difficult financial times, the populace should not be burdened with additional fiscal regulations that may harm their financial well-being.
According to Loboda, self-made Russian high rollers, if unquestioned by authorities, have accumulated their fortunes through their own hard work. They pay all taxes via brokers, raking in profits from stock, currency, bond, and other segments of the financial market. Russia boasts a free and robust market economy. However, it's unclear who qualifies as wealthy, with income bearing the usual criteria over parental wealth.
He questions the author's strange logic that wealth depends on parental income.operating under this skewed logic, any citizen working with an income below that of non-working pensioners or the low-income sector would be eligible for government assistance, even before retirement, regardless of their actual earnings. Furthermore, Loboda questions whether a woman staying at home and being supported by her spouse should be labeled a "rich idler." In essence, Loboda posits that the proposal is impractical.
Loboda further suggests that it would be more appropriate to apply tax practices to monetary authorities officials for the long-term devaluation of the ruble, rather than focusing on the idle wealthy.
Alexander Safonov, a professor at the Financial University, has advocated for the imposition of taxes on wealthy non-working Russians. He asserts that housewives, rentiers, and the offspring of wealthy parents make use of social benefits without contributing to the state treasury, making them "professional idlers."
Recently, the Russian Ministry of Labor has put forth measures to combat clandestine employment. However, no specific proposition to single out and tax wealthy individuals who do not generate income has been found in the sources.
The Exception: Progressive Income Taxation in Russia
While there isn't a clear-cut proposal targeting wealthy non-working individuals in Russia, parliamentary discussions revolve around the potential introduction of a progressive individual income tax system that targets wealthy earners. According to proposed reforms, individuals earning up to 5 million rubles would maintain the current 13% flat tax rate, while income exceeding 500 million rubles would be taxed at a 25% rate.
This reform focuses primarily on income, presupposing some form of earnings or capital gains, as opposed to wealth or non-working status. The motivation behind these reforms encompasses increasing fiscal revenues, reducing income inequality, and funding social programs or infrastructure development.
Nonetheless, concerns surrounding economic stability, political resistance to disruptive tax changes, and potential capital flight or discouragement of investment persist in the discourse. At present, there is no explicit proposition to tax wealthy individuals who do not generate income separate from the progressive income tax scheme.
- The debate on taxing unproductive wealth in Russia extends to discussions about a potential progressive individual income tax system, targeting high earners, where individuals earning over 500 million rubles could be taxed at a 25% rate.
- While there is discussion about progressive income taxation in Russia, there is no clear proposal aiming specifically at taxing wealthy individuals who do not generate income, unlike the arguments put forth by Alexander Safonov suggesting taxes on housewives, rentiers, and offspring of wealthy parents.
