Russian Communists want to return to progressive taxation scale.

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MOSCOW, August 9 (Itar-Tass) Russian Communists claim that the
government should re-introduce a progressive taxation scale in Russia.
Last week, the party submitted a bill to the Russian State Duma that
suggests replacing the current flat taxation rate with a progressive
income tax. Its author, the Communist Party deputy Alexei Bagryakov,
thinks that it's a good way to replenish the state budget. If approved,
the bill will bring approximately 2.1 trillion rubles or about 5% of the
GDP to the state budget in 2010. "That will fully cover the budget deficit
and will make it possible to avoid foreign borrowings," Bagryakov told his
Duma colleagues last week.
The deputy said that the introduction of the flat taxation rate in
Russia ten years ago had been prompted by the need to legalize the incomes
of Russian citizens and increase the volumes of tax revenues into Russia's
consolidated budget.
Nevertheless, income taxes collected from natural persons continue to
account for a very small share of the GDP. "It was less than 4% in 2008,
which is far below international standards," Bagryakov said, referring to
the State Statistics Committee.
He believes that the world experience has proven the advantages of
the progressive taxation scale: most developed countries have introduced
an almost 45% income tax for people with top incomes. For example,
Britain, which is one of the biggest world financial centers and sticks to
the liberal economic policy, is planning to increase the marginal tax rate
for people with incomes higher 150,000 pound sterling from 40% to 50%.
Another reason for the re-introduction of the progressive taxation
scale is radical fall in revenues to regional budgets and rapid
differentiation of Russian society by incomes.
With all that taken into account, the bill suggests reducing the
tax rate from 13 to 5 percent for people whose annual income is less than
60,000 rubles. According to the State Committee for Statistics, the share
of these people accounted about 13% of the total number of taxpayers in
2009.
For the Russians whose income varies from 60,000 to 600,000 rubles a
year (about 85%), the tax rate will go up to 15%, Bagryakov writes in the
explanatory materials. He suggests that citizens earning from 600,000 to 3
million rubles a year to pay 25% of incomes to public coffers, while the
maximum tax rate of 45% percent should be established for top earners with
an annual income of more than 12 million rubles.
"The introduction of the progressive tax is expected to defuse social
tensions in the country, following reduction of income differentiation in
Russian society," Deputy Bagryakov concluded.
At the same time, Vice-Premier Sergei Sobyanin, the government
staff chief, said in his negative conclusion on the bill that the
introduction of the flat income tax rate of 13% for most types of personal
incomes along with simultaneous expansion of the tax base made many
employers to legalize the salaries of their employees. That significantly
expanded the tax base.
In his speech in April this year, Prime Minister Vladimir Putin
said it was too early to abandon the flat taxation rate because it might
send a negative signal to economy. " If we learn to be good
administrators, we can slowly start ways of getting away from that system
but it's a bit too early at this moment," Putin said.

.The first Caucasian youth forum opens in Pyatigorsk.

PYATIGORSK, the Stavropol territory, August 9 (Itar-Tass) - The first
Mashuk-2010lyouth forum, a younger brother of the Seliger forum, is
opening in Pyatigorsk on Monday.
"Mashuk-2010 is the first attempt to establish the work of our agency
with the youth of the Caucasus region," Vasily Yakemenko, the head of the
Federal Agency for Youth Affairs, told Itar-Tass.
"We want the young people to understand and know what opportunities
are available to them in the country for realizing their ambitions. We
want to hear how they see their future," Yakemenko went on to say.
The Mashuk-2010 camp will work in two shifts. The first will last on
August 9-17, the second on August 18-27. The forum will be attended by
2,000 young people aged 18-30 from the Stavropol territory, the republics
of the North Caucasus as well as South Ossetia and Abkhazia.
For two weeks, the young people will listen to dozens of unique
educational programs, will be able to present their projects to leading
experts in various fields and meet State Duma deputies, public figures and
businessmen.
The guests of the forum include Alexander Khloponin, the presidential
envoy in the North-Caucasian Federal District, Valery Gayevsky, the
governor of the Stavropol territory, Boris Ebzeyev, the president of the
Karachai-Cherkess Republic, North Ossetian President Taimuraz Mamsurov,
Ingush President Yunus-Bek Yevkurov, Chechen President Ramzan Kadyrov,
Dagestani President Magomedsalam Magomedov and President of
Kabardino-Balkaria Arsen Kanokov.
The main objective of the Mashuk-2010 camp is to select and support
talented young people on their way to creating competitive goods and
services and civilian and public projects.

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