Financial system and fiscal policy of the state. Financial, tax, budget policy of the state. The essence and reasons for taxation. Types of taxes

2. Budgetary system of Russia

3. The essence and functions of taxes

4. State fiscal policy

1. Essence, structure and functions of finance

Currently, finance represents economic relations that arise in the process of formation and use of funds of funds of enterprises, the state, municipalities and the population.

Finance performs a number of important functions in the economy. The main ones are:

Distribution - carried out in the process of circulation of enterprise resources, which is directly related to the formation and distribution of funds of financial resources, starting from the capital of the enterprise and to the distribution of its profits;

Redistribution - implemented by the state through a system of centralized finance through the accumulation and provision of funds to individual industries and enterprises;

Reproductive – using funds of financial resources, the state and enterprises regulate the reproductive process;

Stimulating - carried out through the tax system, budget financing, financial markets in order to develop subjects of a market economy and increase the rate of economic growth;

Control – implemented through a system of state and non-state financial control in order to increase the efficiency of financial resource management.

The financial system is called upon to implement the functions of finance. The financial system is a form of organizing monetary relations between all economic entities for the distribution and redistribution of the total social product.

The structure of the Russian financial system can be represented as the following diagram.

Figure 1. – Structure of the Russian financial system.

This diagram clearly demonstrates that the basis of the financial system is the finances of enterprises, since the monetary content of all other elements of the system depends on them. But the central link of the financial system is considered to be the state budget, due to the fact that with its help the redistribution of monetary resources between economic entities is carried out.

2. Budgetary system of Russia

The concept of “budget” is a financial plan of the state (or municipality) for a certain period, most often for one year, representing an estimate of income and expenses; a form of formation and expenditure of a fund of funds intended for financial support of the tasks and functions of the state and local government.

The totality of the federal budget, budgets of the constituent entities of the federation, local budgets and budgets of state extra-budgetary funds forms the budget system of the Russian Federation. The principles of its construction are:

The principle of unity of the budget system. It assumes a unified legal framework, forms of budget documentation, classification codes for budget items, etc.;

The principle of separating income and expenses between levels of the budget system. It means assigning the relevant types of income and powers to make expenses to the relevant bodies of state power and local self-government;

The principle of completeness of reflection of income and expenses. In accordance with this principle, the budget must include all income and expenses in full;

The principle of budget balance. This means that the volume of envisaged budget expenditures must correspond to the total volume of budget revenues and receipts from sources of financing its deficit. The Russian Budget Code prohibits the planning of budget surpluses at the regional and local levels and limits the size of the deficit;

The principle of efficiency and economy in the use of budget funds;

The principle of transparency. This principle requires mandatory publication in the open press of approved budgets and reports on their implementation. Secret items can only be approved as part of the federal budget;

The principle of budget reliability. Assumes the reliability of socio-economic development forecast indicators and the realistic calculation of budget revenues and expenses;

The principle of targeting and targeted nature of budget funds. It means that budget funds are allocated at the disposal of certain recipients with the designation of their direction for financing specific purposes.

The central place in the budget system is occupied by the federal budget. Its revenue part is formed from part of federal taxes, income from foreign economic activity, from the use of state property, part of the profits of the Central Bank and other sources.

The structure of the expenditure part (according to the functional classification of the budget) includes expenditures on public administration, national defense, judicial power, law enforcement, social services, servicing public debt, providing financial assistance to federal subjects and other expenses.

The excess of revenue over expenditure forms a budget surplus. In economically developed countries, it has not been planned since the 60s of the twentieth century, since a surplus leads to the withdrawal of funds from the national economy, which restrains economic growth. However, in Russia the federal budget has been planned with a surplus since 2001 in order to combat inflation.

The main sources of financing the state budget deficit are:

1) issue of new money or emission method of financing. However, this method leads to inflationary consequences, so they not only try not to use it, but also prohibit it by law, as, for example, in the USA or Russia (since 1994). To some extent, this method includes government borrowing from the Central Bank, which causes an actual increase in the money supply;

2) government loans within the country and abroad. This method of financing a deficit is more common because it does not cause inflation, but it does lead to the creation of public debt.

Government debt is the sum of outstanding government loans and other financial obligations of the government. In contrast to borrowing by enterprises, government loans are most often used not for production activities, but to cover the budget deficit. Payments under it are made not through increased profits, but through taxes.

Taking into account the area of distribution, public debt is divided into internal and external. Domestic debt is usually generated by loans issued through the issuance and sale of government securities. It leads to a redistribution of income among the population in favor of the state’s creditors, shifts debt payments to future generations, increases budget expenditures for the next years, etc.

External debt arises both through the placement of government securities abroad and through loans from other states, foreign banks, international financial organizations (International Monetary Fund, International Bank for Reconstruction and Development, etc.). Payments on external debt lead to a loss of foreign exchange income of the state from foreign economic activity and reduce the possibilities for economic development. The country may become financially dependent on other states.

A budget deficit can arise not only during the formation, but also during the execution of the budget, when tax revenues are lower than planned. In this case, Russian budget legislation provides for the possibility of sequestration - a proportional reduction in budget expenditure items. If tax revenues turn out to be higher than planned, then additional funds will be used either to pay off the public debt or to increase budget expenditures.

Lecture 11. Financial system and fiscal policy. (4 hours)

1. Financial system and its structure.

2. The state budget and its main articles.

3. The essence and reasons for taxation. Types of taxes.

4. Budget deficit and its causes.

5. Public debt and its consequences.

6. Contractionary and expansionary fiscal policy.

1. Financial system and its structure.

Economic relations arising in the process of taxation and government spending are called financial relations, or finance.

These relations, on the one hand, ensure the existence of the state itself and its institutions, and on the other hand, they are used by the state for macroeconomic regulation of the national economy.

Financial relations are carried out through the relevant institutions (Ministry of Finance, Ministry of Taxes and Duties).

The totality of all financial relations of society and the institutions that implement them is the country's financial system.

Main task public finance consists of providing the state with the funds it needs to perform economic functions. They include the following units: state budget, off-budget funds, state credit

Rice. Structure of the financial system

2. The state budget and its main articles.

The leading link in the financial system is state budget- a centralized fund of monetary resources at the disposal of the government and used to carry out socio-economic functions.

Rice. Functional structure of consolidated budget expenditures in 2007, as a percentage of the total

For an excellent student! The bulk of budget expenditures in the section “Real sector of the economy” accounted for expenditures in subsections: “Agriculture, fishery activities” - 43.5% (in 2006 - 47.3%) of all expenditures on the national economy, “Roads” - 22% (24.4% in 2006), “Industry, energy, construction and architecture” - 19.1% (instead of 14% in 2006). Social expenses in the sections: “Social policy”, “Education”, “Healthcare”, “Physical education, sports, culture and media” amounted to 53.3% of all expenses of the consolidated budget. In 2006, the share of these expenses was 53.7%.

3. The essence and reasons for taxation. Types of taxes.

There are two main sources of covering the budget deficit:

1. Issue of new money, or emission method of covering.

2. Attracting a government loan, or a non-equity method of coverage.

Inflation tax.

It is also a kind of “invisible” government loan and is a method of withdrawing funds from the population.

Inflation-assisted government borrowing is a method used by many developing countries to pay for government spending because other means of taxation are ineffective.

Influence on the volume of production in the country through the state budget.

Historical information.

§ Taxes have existed at all times. However, even before 1936, the country's budget was used mainly to ensure the existence of the state itself and its institutions.

§ The use of the state budget to regulate demand and production in the country was proposed by J.M. Keynes and first implemented in the USA in 1936, during the Great Depression. Then President F. Roosevelt created the Federal Reserve System. Then similar fiscal systems were created in all countries with market economies, and since 1992 in the Republic of Belarus.

Influence on the volume of production in the country through the budget. Continued 1.

In a modern fiscal system, two key instruments influence the volume of demand and production in a country - a progressive scale of income taxes and government spending.

Government expenditures in the form of social transfers are directed to various groups of the population and in the form of grants and subsidies to various economic entities.

Since tax rates are revised less frequently (over decades) than the value of individual items of the state budget (approved annually or for 5-7 years), the main instrument is not tax policy, but budget policy.

Rice. Influence on the volume of production in the country through the budget. Continued 2.

Influence on the volume of production in the country through the budget. Continued 3.

Thus, the economy, once in a depression, may not come out of it for a long time. Example. During the Great Depression in the most developed countries at that time - England and the USA, unemployment reached 30%, a decline in production over the period. amounted to 50%, the number of suicides increased significantly, people began to rob stores.

Influence on the volume of production in the country through the budget. Continued 4.

To prevent a reduction in demand, a progressive scale of income taxes is being introduced (on personal income and on corporate profits). As a result, those who earn more pay more to the budget, while those who find themselves bankrupt or lose their jobs pay nothing. Further, those people who have lost their jobs or, due to a decrease in income, have found themselves below the poverty line, receive benefits and additional payments from the budget, and those companies that are on the verge of bankruptcy receive subsidies and subsidies. The increase in AD from the budget can be described according to the expenditure components GDP = C + I + G + Xn. People who have nothing to eat will not save their income, and firms that do not have the means to resume production will not send money abroad. They will use the funds received to purchase goods and invest in production; Thus, firms that were expected to close: will resume production (Y) --- will rehire previously laid off workers (L) --- they will receive W --- AD will begin to gradually increase, which will lead to an increase in GDP.

Rice. Limited influence on production volume through the state budget.

Finance- this is a set of monetary relations organized by the state, during which the formation and use of national funds of funds is carried out to carry out economic, social and political tasks.

Finance is a set of cost flows associated with the distribution and use of monetary resources.

The essence of finance is manifested in its functions. It is customary to distinguish two functions of finance:

Redistributive function – providing each business entity with the necessary financial resources in the form of monetary funds for special purposes.

Control function - finance, through financial resources and funds, has the property of quantitatively reflecting the reproductive process as a whole and its individual phases, i.e. inform about the proportions of distribution of the social product.

Financial system– a set of financial relations and institutions regulating them. The financial system includes:

Public Finance;

Finance of business entities;

Public finances.

Public finances consist of the state budget and extra-budgetary funds. A significant portion of the gross domestic product (GDP) of various countries is redistributed through public finance: from 1/3 to 1/2. Most of all in Sweden - about 2/3. In Russia this figure is approximately 1/2 of GDP.

In any society, the state uses finance to carry out its tasks in regulating the economy. One of the ways to solve them is to carry out financial policy.

The state determines measures to mobilize financial resources, their distribution and redistribution, and use in the economy. The final directions of financial policy depend on the economic state of the country and the tasks being solved.

Depending on the duration of the time interval and the nature of the tasks, financial policy is divided into financial strategy and financial tactics.

Financial strategy– this is a long-term course of financial policy, designed for the future and providing for the solution of large-scale problems determined by economic and social strategies.

Financial tactics is aimed at solving the problems of a specific stage of development of society through timely (prompt) changes in the ways of organizing financial connections and regrouping financial resources.

Fiscal (budgetary and tax) policy– a type (direction) of state economic policy, which is the manipulation of the state budget, its income and expenses to achieve macroeconomic equilibrium.

Fiscal policy is implemented through taxation and government spending.

The basis of fiscal policy is the state budget.

State budget is an estimate of government revenues and expenditures for a fiscal year. The budget includes government revenues and expenses. Expenditures show the direction and purpose of government appropriations. They are used to maintain the state apparatus, for military needs, to finance social programs, to maintain and develop the public sector of the economy, and for many other purposes.

Composite parts of the state's fiscal policy are:

- discretionary a policy that involves the government regulating its expenses and revenues (taxation).

- non-discretionary policies (automatic stabilizer policies) that regulate revenues and expenditures regardless of the operational actions of the state;

Discretionary policy – comes in two versions:

Expansionary (stimulative) policy, which increases aggregate demand through increased government spending and lower taxes and is aimed at increasing output and employment (carried out during an economic downturn);

Restrictive (restrictive or contractionary) policies that restrain aggregate demand by reducing government spending and increasing taxes and aimed at reducing output and employment (carried out during an economic recovery).

Restrictive policies are used primarily to combat inflation, and expansionary policies are used to smooth out the cyclical nature of economic development and ensure economic growth. Expansionary policies can generate inflation.

The main instruments of discretionary fiscal policy:

Change in the volume of government procurement of goods and services (G);

Change in income tax amount (T).

1. Financial system: purpose, functions, structure.

2. Socio-economic content of fiscal policy.

3. Discretionary fiscal policy.

4. Non-discretionary fiscal policy.

5. Public debt: causes and consequences.

6. The theory of supply-side economics.

1.Financial system: purpose, functions, structure.

Financial relations arise between subjects of market relations and represent monetary relations not related to servicing personal consumption. The main types of financial relations include monetary relations: between the state and enterprises; between the state and public organizations; between the state and the population; between enterprises and organizations; within enterprises and organizations.

Thus, financial system is a set of historically established economic relations in society regarding the formation and use of funds not related to servicing personal consumption.

Finance performs accumulating, regulating, distribution and control functions in the economy.

One of the main elements of a country’s financial system is its tax system.

Tax system represents a set of taxes established by the legislature and levied by executive bodies, as well as principles and methods of constructing taxes.

The role and structure of the tax system is determined by the characteristics of the historical and economic development of a particular country. The tax system is designed to provide the state with financial resources. It includes various types of taxes, the classification of which is based on different characteristics.

The main group of taxes consists of direct and indirect taxes. This group of taxes is associated with the object of taxation and the characteristics of the relationship between the taxpayer and the state. Direct taxes are established directly on income and property (direct form of taxation). These include: corporate income tax, corporation tax, individual income tax, inheritance tax, vehicle tax, etc. Indirect taxes are taxes on goods and services paid in the price of goods or services included in the tariff. The owner of the goods or the provider of services upon their sale receives tax amounts, which he then transfers to the state (indirect form of taxation). In this case, the connection between the taxpayer (consumer of a product or service) and the state is mediated by the object of taxation. Indirect taxes include: turnover tax, excise taxes, customs duties, etc.

Based on changes in tax rates taxes are divided into: taxes with a constant rate, with a proportional rate, with progressive and regressive rates.

Another important element of the country's financial system is the state budget.

State budget represents an annual financial plan for the formation and use of the centralized monetary fund of the state.

The main elements of the state budget are revenues and expenses of the state budget.

Government expenditure includes government consumption ( C G) and public investment ( I G), i.e. G = C G + I G . In addition, the expenditure activity of the state is manifested in the payment of transfers ( T r), consisting of subsidies (subventions) to entrepreneurs ( T rU) and various payments to households ( T rH). Government spending also includes interest payments on the government debt ( rD G), Where r– real interest rate.

The history of economic development of industrialized countries shows that the share of government spending in GNP or GDP throughout the twentieth century. has a steady upward trend. It is noteworthy that back in the 19th century. German economist Adolf Heinrich Wagner identified this trend, which was later called “Wagner’s law.”

Wagner's law– a political economic pattern establishing that with the development of the world economy, the share of government spending in GNP or GDP tends to increase.

The main types of government expenses and revenues are summarized in table 11.1.

Table 11.1

The main sources of state revenue are taxes ( Tx) in the form of straight lines ( T x dir) and indirect taxes ( T x ind), factor income of the state ( Y G) from the sale of goods produced in the public sector and the creation of public debt ( D G). At the same time, to simplify theoretical analysis, the concept of net taxes is often used ( T), which are defined as follows : T = T x – T r.

Normal state of the state budget assumes equality of its expenditure and revenue parts, i.e. balance of state budget revenues and expenditures. Meanwhile, in practice situations often arise that differ from normal ones, which are usually characterized by the emergence of a deficit or surplus of the state budget.

State budget deficit represents a situation in which current government expenditures exceed revenues (tax revenues) in the current year. The opposite situation is called state budget surplus.

Government budget deficits can be either structural or cyclical. Structural deficit of the state budget arises as a result of deliberate measures taken by the government to increase government spending and reduce taxes in order to prevent declines in production. The cyclical state budget deficit is the result of a cyclical decline in national production and reflects crisis phenomena in the economy.

If the government pursues a discretionary fiscal policy to combat inflation and the decline in production, then, as a rule, it rarely manages to balance its budget in a particular year, i.e. equalize government revenues and expenses. Macroeconomic theory has developed three approaches to solving problems of balancing the state budget. In each case, the government influences employment, real national income, and the general price level.

The first approach is based on the concept of an annual balanced budget, i.e. annual equalization of state income and expenses. This approach, in fact, contradicts the counter-cyclical policy of the state, since in reality it deepens cyclical fluctuations. Meanwhile, supporters classical And neoclassical theories support such fiscal policy because, in their opinion, it limits the expansion of the public sector and therefore prevents the contraction of the private sector of the economy. As a result of such a budget policy, government intervention in the economy is limited and there is no increase in costs to society in the form of increased taxes.

The second approach is based on the concept of a budget balanced on a cyclical basis.. Proponents of this approach (Keynesians, neo-Keynesians, etc.) propose to alternate between surplus (in years of economic growth) and deficit (in years of economic recession) government budgets to stabilize the economy. However, with this approach, the problem of balancing the state budget is only partially solved, since in most cases the duration of the boom and bust phases of economic cycles do not coincide.

The third approach is based on the concept of functional finance. In accordance with this concept, the main purpose of public finance is to ensure non-inflationary full employment and economic stabilization, whereas the problems of balancing the state budget and public debt are of secondary importance. Non-inflationary full employment and economic stabilization must be achieved regardless of the impact of the ongoing fiscal policy on the size of the state budget deficit and public debt. Thus, with this approach, the problems of balancing the state budget and public debt are of secondary importance.

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Coursework

State financial system and fiscal policy

financial system fiscal policy

Introduction

1.1 The concept of the financial system, its scope and links

1.2 Functions of finance

Chapter II. Fiscal policy

2.1 Fiscal policy, concepts and goals

Chapter III. Types of Fiscal Policy

3.1 Types of fiscal policy

3.4 Problems in implementing fiscal policy

Conclusion

List of used literature

Introduction

Finance plays a huge role in the structure of market relations and in the mechanism of their regulation by the state. They are an integral part of market relations and at the same time an important tool for implementing government policy. That is why today it is more important than ever to know the nature of finance, to deeply understand the peculiarities of its functioning, and to see ways of using it most fully in the interests of the effective development of social production.

The essence of finance is manifested in its functions: distribution, control, incentive, fiscal.

The set of financial relations within the national economy forms the financial system of the state. From the point of view of socio-economic relations, it consists of centralized, decentralized finance and household finance. From the point of view of macroeconomic analysis and the role of the state in the development of the national economy, public finances are of particular importance. The principle of their construction, characteristic of the financial systems of modern developed countries, is the principle of fiscal federalism, in which the functions between different levels of the system are clearly delineated. In accordance with this principle, in unitary states local budgets are not included in the state budget; in federal states - local budgets are not included in the budgets of members of the federation, and the latter are not included in the state federal budget. For example, the public finances of the Russian Federation are also built in accordance with the principle of fiscal federalism.

Problems of financial recovery concern literally everyone today. After all, what is currently happening in the financial sector is closely related to the personal well-being of everyone. The amount of profit and taxes, contributions to social insurance and pensions, the price of stocks and bonds, forms of investment in production and the social sphere, etc. - such issues are discussed today not only in government circles, they deeply concern each of us.

Specific instruments for carrying out state economic policy are, first of all, such fiscal levers of influence, fiscal policy instruments as taxes, government spending, and transfers. With the help of fiscal instruments, the state is able to change the size and direction of cash flows in accordance with the goals pursued and the measures planned for their implementation.

The purpose of this work is to study the financial system of the state and fiscal policy. To achieve this goal, it is necessary to solve the following tasks:

· Analyze the financial system of the state;

· Consider the functions of finance;

· Describe fiscal policy and its goals;

· Consider the main types of fiscal policy.

Chapter I. Financial system of the state

1.1 The concept of the financial system, its scope and links

Finance is a system of social relations through which, on the basis of the distribution and redistribution of the social product and national income, the systematic formation, distribution and use of centralized and decentralized funds occurs. Finance is divided into units.

The financial system in the broad sense of the word is a set of financial relations existing within a given economic formation; in the narrow sense of the word, it is a system of financial institutions, the socio-economic content, functions and structure of which are determined by state policy, which includes financial organizations and all structural divisions of the state tax service.

Structure of the financial system:

· Budget system

· Off-budget trust funds

· Finance of enterprises and organizations

· Property and personal insurance funds

· Credit, which is divided into state, municipal and bank.

The construction of a financial system is based on three fundamental elements:

1. Functional purpose, manifested in the fact that each link of the system performs its own tasks; for example, the state budget expresses the distribution relations between the state, enterprises, and the population, determined by the formation and use of a national fund of financial resources. Property and personal insurance is one of the methods of creating reserve funds for citizens. Enterprise finance expresses relations regarding the creation and use of monetary funds intended to meet the diverse needs of the primary links of social production, fulfillment of obligations to the state budget and commercial banks;

2. Territoriality - each region and republic has a corresponding apparatus of financial and insurance bodies;

3. The unity of the financial system is predetermined by the unified economic and political basis of the state. This determines a unified financial policy pursued by the state through central financial authorities and common goals. All levels are managed on the basis of uniform basic legislative and regulatory acts.

The financial system includes national, sectoral and public financial relations. The financial system as a whole is presented in Diagram 1.

The budget sector is traditionally considered the main link in the financial system. Redistribution through the budget should ensure the normal development of production and means of production. The same applies to the production and non-production spheres, industry, agriculture and other imbalances. The financial system must be distinguished from the financial apparatus. The financial apparatus is the part of the government apparatus that is entrusted with the management of the financial system.

Budget system. The federal budget is the main financial plan of the country, approved by the Federal Assembly as law. Through the federal budget, the state concentrates a significant share of national income to finance the national economy, socio-cultural events, strengthen the country's defense and maintain state authorities and administration. With the help of the budget, national income is redistributed, which creates the opportunity to maneuver funds and purposefully influence the pace and level of development of social production. This makes it possible to implement a unified economic and financial policy throughout the country.

The federal budget is characterized by the following features:

has a pronounced balance sheet character. The excess of expenses over income constitutes a budget deficit.

the formation and use of the budget is based on a combination of centralized principles with the initiative of local authorities.

Main functions of the budget:

· redistribution of national income and approximately 50% of GDP between territories, sectors of activity, and social groups of the population;

· government regulation and economic stimulation;

· financial support of financial policy;

· control over the formation and use of a centralized fund of funds.

Off-budget trust funds. The legal status of funds is regulated in detail in the budget code and in the legislation of the constituent entities. If budgetary funds are associated with the development of general tasks, then extra-budgetary funds are associated with a specific task, for example, a pension fund.

Property and Personal Insurance Fund. The sources of formation of these funds are the funds of enterprises and the population, and the better the financial position of these two groups, the better the condition of these funds.

The pension fund is an off-budget state fund, the funds of which are made up of legally established deductions from the activities of individuals and legal entities, which purposefully spends these funds on the payment of pensions to citizens.

The pension fund performs some functions:

Sh participates in determining the amount of contributions for state insurance, justifying their differentiation among enterprises and organizations depending on working conditions;

Ш ensures control over the timely and complete receipt of insurance premiums and the correct expenditure of funds;

Sh participates in the preparation of proposals to improve pension provision and develop social programs;

SH carries out international cooperation on issues within the competence of the fund.

The State Social Insurance Fund (SIF) is a centralized fund of monetary resources for general government purposes, distributed both territorially and sectorally.

Compulsory health insurance is an integral part of state social insurance, providing all citizens of the Russian Federation with equal opportunities to receive medical and pharmaceutical care at the expense of compulsory health insurance.

Federal Compulsory Medical Insurance Fund (FFOMS);

Territorial compulsory health insurance funds (TFIF);

Enterprise finance. The volume of such decentralized monetary funds directly depends on the state of the state’s tax system. If the state’s tax system is quite “forgiving” and the volume of tax payments is small, then the decentralized funds of the state grow. This is good because the funds from these funds will remain in the state and be used for various needs. Financial resources are monetary incomes and savings at the disposal of business entities and the state and intended for expanded reproduction, solving social problems, and realizing the interests of owners.

The conditions for the formation of financial resources are laid down at the production stage in the proportions of various elements of the cost of the created product, which are adjusted through prices and distributed among participants in the production process. Their income is then redistributed by the state through the tax system and transfers passed on to the population, as well as through the financial market.

The composition of financial resources varies significantly among different economic entities. Scheme 2.

Diagram 2 shows the most typical composition of financial resources of commercial organizations. It excludes borrowed funds that are raised by enterprises through the issuance of debt obligations and bank loans. Borrowed funds, as is known, require their obligatory repayment. This is the most important criterion for the difference between financial and credit resources. Nevertheless, borrowed funds, along with financial resources, make it possible to solve the problem of providing the economic activities of an enterprise with sources of financing.

At the same time, the differences between financial and credit resources are not only conceptual in nature, but also determine the presence or absence of obligations of the enterprise and the possibility of repaying them.

Thus, the financial resources of enterprises are essentially their own sources of financing, attracted from the financial market and arising as a result of economic activities. These funds are intended for expanded reproduction, solving social problems and satisfying the interests of enterprise owners.

Credit. The lender is individuals and legal entities, the borrower is the state represented by its bodies. The state attracts additional resources by selling bonds, treasury bills and other types of government securities on the financial market. This form of loan allows the borrower to direct the mobilized additional financial resources to cover the budget deficit without issuing an issue for these purposes. State credit is also used to stabilize money circulation in the country. In conditions of inflation, government loans from the population temporarily reduce their effective demand. Excess money supply is withdrawn from circulation, i.e., there is an outflow of money from circulation for a predetermined period.

The use of government credit is determined by the need to meet the needs of society at the expense of budget revenues. Mobilized temporarily free funds of the population and legal entities are used to finance economic and social programs, i.e. state credit is a means of increasing the financial capabilities of the state. At the national level, government loans do not express a specific target nature, while local authorities can use the mobilized funds for the improvement of urban and rural areas, the construction of healthcare, cultural, educational, and housing facilities.

Depending on the borrower, government loans are divided into those placed by central and local governments. Depending on the location, government credit can be internal or external. Based on the period of raising funds, loans are divided into short-term (up to a year), medium-term (from a year to 5 years), and long-term (over 5 years).

The mobilization of huge financial resources, as a consequence, produces large public debt. The size of the government loan is included in the amount of the country's government debt.

Public debt is the entire amount of issued but not repaid government loans with interest accrued on them as of a certain date or for a specific period.

The state internal debt of the Russian Federation means the debt obligation of the Government of the Russian Federation, expressed in the country's currency, to legal entities and individuals. The forms of debt obligations are loans received by the Government of the Russian Federation, government loans made through the issue of securities on its behalf, and other debt obligations guaranteed by the Government of the Russian Federation.

Public external debt is the debt on outstanding external loans and unpaid interest on them. Domestic debt consists of debt from previous years and newly arising debt. Any debt obligations of the Russian Federation are repaid within a period that cannot exceed 30 years.

Servicing public debt is expressed in the implementation of operations to place debt obligations, repay them and pay interest on them. These functions are performed by the Central Bank of the Russian Federation. The costs of servicing the public debt are made at the expense of the republican budget of the Russian Federation and have become one of the most important elements of government spending. Payments to service the public debt are growing very quickly, crowding out other types of spending from the budget.

Russia's huge public debt, both internal and external, reflects the country's economic and financial crisis. Under these conditions, the state can use refinancing of public debt, i.e. repaying old government debt by issuing new loans.

Control over the state of the state internal and external debt of the Russian Federation and the use of credit resources is assigned to the Accounts Chamber of the Russian Federation.

1.2 Functions of finance

The essence of finance is manifested in its functions. Functions refer to the “work” that finance does. The question of the number and content of functions is controversial.

The famous financier Alexander Mikhailovich Birman identified three main functions of finance:

1. Providing cash for the management process;

2. Control of the ruble;

3. Distribution.

A. M. Alexandrov and E. A. Voznesensky argued that finance is expressed in the formation of monetary funds, the use of monetary funds and control.

However, no one denies that finance is a set of monetary relations organized by the state, during which the formation and use of funds of funds is carried out. And to the question of what is the source of the formation of numerous funds at different levels, there is usually only one answer - gross domestic product. The process of distributing the gross domestic product can be carried out using financial instruments: norms, rates, tariffs, deductions, etc., established by the state.

If we consider finance as a whole, then, apparently, we should assume that it performs two main functions: distribution and control.

The action of the distribution function of finance follows from the essence of finance: ensuring relations related to the distribution and redistribution of the total social product (SOP), national income (NI) and net income (NI), the formation of income and savings; creating funds of funds. The specific mechanism of action of the distribution function follows from the essence of finance as a relationship for the distribution and redistribution of that part of the social product, the action of which occurs in conditions of separation, separation and bifurcation of the cost and material forms of the social product and national income.

The distribution function of finance reflects economic relations determined by the movement of net income, as well as its influence on the components and elements of the total product (thus creating conditions for the subsequent sale of this product in physical form through acts of purchase and sale).

Finance, through net income, not only mediates the entire process of social production, but also actively participates in the circulation of funds at all its stages, directly ensuring the process of expanded reproduction.

So, the social purpose of the distributive function of finance is, firstly, to distribute and redistribute part of the value of the total social product, mainly net income, in monetary form in order to ensure expanded reproduction; secondly, in the formation of potential opportunities for creating a financial basis for the functioning of the state and the entire economic system of any socio-economic formation.

Along with the distribution function, finance plays a control function. The control function is generated by the distribution function and is manifested in control over the distribution of the total social product, national income and net income among the corresponding monetary funds and their intended expenditure.

The control function quantitatively, through the movement of financial resources, reflects economic processes associated with the distribution and redistribution of the total social product. The control function is determined by the normative nature of monetary relations. Regulatory acts regulate both the conditions for the distribution of income and profits allocated for expanded reproduction, and the conditions for payments to the budget (establishment of categories of payers, objects, taxation units, rates, benefit funds for payments, the procedure for their calculation, etc.); financing from the budget (the procedure for opening budget financing and its use); lending; formation and use of various monetary funds of economic entities. It is the control over compliance with regulations that express the essence of the distribution function of finance that, in turn, reflects the content of the control function of finance. This is the dialectical and inextricable relationship between the two functions of finance. This implies the specificity of the control function - the control function is a derivative of the distribution function.

The regulatory function is government intervention in the reproduction process through finance (taxes, government loans, etc.). The state influences the reproductive process through the financing of individual enterprises and the implementation of tax policy;

Stabilizing function - providing citizens with stable economic and social conditions

The functions of finance are shown in Diagram 3.

1.3 Finance of modern society

The most important element of the economic mechanism of modern society is finance.

Finance is a system of economic relations established in society according to

the formation and use of funds of funds based on the distribution and redistribution of the total social product and national income.

In the meaning of “cash payment” it began to be used in the XII-XV centuries. in Italy, a number of whose cities - Florence, Venice, Genoa - were at that time the largest European centers of trade and banking. Subsequently, the term gained international distribution and began to be used as a concept associated with the system of monetary relations, the formation of monetary resources mobilized by the state to perform its political and economic functions.

In pre-capitalist formations, government revenues were predominantly in kind. Most of the state's needs were met through various types of revenue from in-kind fees. With the decomposition of the feudal system and the development of capitalist relations in its depths, monetary income and expenses of the state become increasingly important.

This process intensifies with the expansion of the sphere of commodity-money relations, the growth and complexity of the functions of the state. With the separation of the state treasury from the personal treasury and property of the monarch, the concepts of “state finance” and “state budget” arise.

In modern conditions, the concept of finance covers, on the one hand, public finances, and on the other, the finances of enterprises and corporations.

Public finance is a special area of economic relations associated with the secondary as well as primary distribution and consumption of part of the total social product in order to form the monetary funds necessary for the state to carry out its functions. Their material content is embodied in state and local budgets, special funds, and the finances of state enterprises.

Finance of private enterprises and corporations expresses the monetary relations that arise in the course of their economic activities and ensure the process of production and profit. They materialize in the form of money capital, various monetary funds of enterprises.

The characteristic features of modern finance are the following:

1) monetary form as opposed to natural relations;

2) the distributive nature of the relationship, i.e. there is no equivalent exchange;

3) distribution of the total social product and national income through real monetary funds, for example, in contrast to price distribution.

Thus, finance in its origin is monetary relations. But not all relationships are financial; they become such only when, in the process of production and sale of goods, monetary incomes of participants in the reproduction process are formed and these incomes are used, i.e. when the movement of money acquires a certain independence.

The role of public finance in modern conditions lies primarily in this. that they act as an important tool for influencing the process of social reproduction, maintaining the pace of economic growth, developing key sectors of the economy, structurally restructuring the economy, and accelerating scientific and technical progress. Thus, by expanding the volume of public investment, the state causes an increase in demand for equipment and labor, which, in turn, gives impetus to the growth of industrial production, employment, and the revival of economic conditions. The state budget supports demand, finances social events and programs, etc.

Military spending also has an impact on the economy, although contradictory.

Military expenditures give a certain impetus to the development of industry, but at the same time, a long arms race leads to depletion of the economy, intra-economic imbalances, changes in the structure of production and other negative consequences. Currently, public finances have begun to be actively used to achieve long-term results - increasing the competitiveness of the national economy, accelerating scientific and technical progress and strengthening the scientific and technical potential of the country, overcoming the uneven distribution of productive forces.

However, the dialectics of any economic system is such that public finances, while having a serious impact on the economic situation, growth rates, living standards of the population, etc., at the same time give rise to new difficulties and problems in the economic and social spheres. The effectiveness of solving these problems largely depends on the correctly developed financial policy of the state.

Financial policy is a set of financial activities carried out by government bodies through the links and elements of the financial system. It is based on the theoretical concepts dominant in a given period, under the influence of which the economic course of the state is formed.

Chapter II. Fiscal policy

2.1 Fiscal policy, concepts and objectives

Fiscal policy is part of the financial policy of the state.

Fiscal policy is the policy of manipulating the budget, spending and taxes in order to change real output and employment, control inflation and accelerate economic growth.

The state's fiscal policy involves using the government's ability to levy taxes and spend state budget funds to regulate the level of business activity and solve real social problems.

Fiscal policy includes:

Ш discretionary policy based on strict conscious intervention in the economy;

Ш non-discretionary policy based on automatic stabilization of the economy.

There are two types of discretionary policies: stimulating and restrictive.

Expansionary fiscal policy is carried out during a recession, depression, includes increased government spending, lower taxes and leads to a budget deficit.

Restrictive fiscal policy is carried out during periods of boom and inflation, includes a reduction in government spending, increases in taxes and leads to a government budget surplus.

Taxes and government spending are the main instruments of fiscal policy. Fiscal policy can have both beneficial and quite painful effects on the stability of the national economy.

Thus, the main purpose of discretionary fiscal policy is to counteract cyclical fluctuations in the economy by stimulating or restricting aggregate demand. That's why it's called anticyclical.

Carrying out discretionary fiscal policy requires the implementation of measures to balance the state budget, which involves:

· deficit financing;

· elimination of budget surpluses.

There are two main methods of financing the deficit: borrowing from the population through the loss of securities and issuing money.

Non-discretionary fiscal policy is driven by the fact that, to a certain extent, changes in the relative levels of government spending and taxes are automatic. In this case, taxes and transfers act as automatic built-in stabilizers of the economy - shock absorbers of cyclical fluctuations that do not require conscious government intervention. Built-in stability is the mechanism of action of automatic stabilizers.

The state determines government spending standards and tax rates, but not the tax revenues themselves. The latter change even if the tax rate remains unchanged. In economic theory, there are different points of view on the methods of implementing the state’s fiscal policy.

Proponents of the Keynesian direction traditionally focus on creating effective aggregate demand as a stimulus for economic development. Therefore, they consider tax cuts as the main factor in the growth of aggregate demand and, accordingly, the growth of real production. At the same time, in the short term, there is a reduction in budget revenues, which results in education or increase in budget deficit.

Proponents of the theory of “supply-side economics” view a decrease in tax rates as a factor in increasing aggregate supply. They believe that a decrease in the tax burden leads to an increase in income:

Population, and consequently, to an increase in savings;

Business, and consequently, to increase the profitability of investments.

Thus, tax cuts cause an increase in national production and income, which, in turn, not only does not reduce tax revenues to the budget and does not cause a budget deficit, but at lower tax rates ensures an increase in tax revenues to the budget due to the expansion of the tax base ( in accordance with the “Laffer effect”).

Diagram 5 The influence of fiscal policy on aggregate supply.

Initially, equilibrium within the national economy (aggregate demand - AD1, aggregate supply - AS1) was achieved at production volume Q and price level P1. The reduction in tax rates on personal income led to an increase in aggregate supply from AD1 to AD2. With the same aggregate supply, this led to an increase in the equilibrium volume of GNP and an increase in the price level (Q2 and P2, respectively). An increase in aggregate demand while simultaneously reducing tax rates on entrepreneurs' income led to an increase in aggregate supply from AS1 to AS2. A new equilibrium has been achieved within the national economy (aggregate demand - AD2, aggregate supply AS2) with production volume Q3 and price level P3. It should be noted that the impact of taxes on demand occurs more quickly.

2.2 Methods of economic regulation

Modern fiscal policy determines the main directions for using the state’s financial resources, methods of financing and the main sources of replenishment of the treasury. Depending on the specific historical conditions in individual countries, such a policy has its own characteristics. However, a common set of measures is used. It includes direct and indirect financial methods of regulating the economy.

Direct methods include methods of budget regulation. The state budget finances:

v costs of expanded reproduction;

v unproductive expenses of the state;

v development of infrastructure, scientific research, etc.;

v implementation of structural policy;

Using indirect methods, the state influences the financial capabilities of producers of goods and services and the size of consumer demand.

The taxation system plays an important role here. By changing tax rates on various types of income, providing tax breaks, reducing the tax-free minimum income, etc., the state seeks to achieve, perhaps, more sustainable rates of economic growth and avoid sharp ups and downs in production.

Among the important indirect methods that promote capital accumulation is the policy of accelerated depreciation. Essentially, the state exempts entrepreneurs from paying taxes on part of the profits that are artificially redistributed to the depreciation fund.

The state performs its regulatory functions through administrative and economic methods. A command economy is characterized by the predominance of administrative methods of regulation. The system of state regulation of a market economy, on the contrary, is based on the use of economic methods. The fundamental difference between these two groups of methods is as follows.

Administrative, or direct, methods of regulation limit the freedom of choice of an economic entity. For example, directive planning targets for the volume and range of products produced or centrally set prices for goods and services - typical methods of administrative regulation in a planned economy - deprive the enterprise of the possibility of alternative use of resources. It is obliged to produce products in a given range and volume and sell them at a given price. In contrast, economic and indirect methods of government regulation do not limit the freedom of entrepreneurial choice. For example, reducing business taxes or, say, lowering the interest rate are typical methods of economic regulation aimed at increasing production and increasing the investment activity of enterprises. The latter increase capital investment and production volume not because they have no other choice. They are completely free to choose their production program and investment policy. Simply lowering taxes and the discount rate makes growth in production and investment more profitable than before.

The distinction between administrative and economic methods of government regulation is to some extent arbitrary. In order to use any indirect regulator, a preliminary administrative decision of the relevant government authorities is necessary, for example a decision to change tax rates, to provide tax incentives or to sell government bonds by the Central Bank, in this sense, any economic regulators bear the stamp of administration. At the same time, any administrative regulator, directly forcing business entities to perform certain actions, simultaneously has a secondary indirect impact on a number of related economic processes. For example, an administrative increase in prices will not only directly determine their new level, but through prices will indirectly affect the state of supply and demand, and in this sense, we can say that any administrative methods of regulation carry features characteristic of economic, indirect regulators. Nevertheless, the criterion discussed above allows, as a rule, to distinguish economic methods from administrative ones in practice without any problems. The distinction between them is fundamentally important from the point of view of the nature of market relations.

Chapter III Types of fiscal policy

3.1 Types of fiscal policy

Fiscal (fiscal) policy is a system of government regulation of the economy through changes in government spending, taxes and the state of the state budget, in order to change the real volume of production and employment, control inflation and accelerate economic growth. Fiscal policy, according to J. M. Keynes, it is customary to call the area of the economy directly related to the interaction of government bodies and all other economic entities. This interaction is achieved through a system of government orders, taxation and transfer payments. Since public spending means using state budget funds, and taxes are the main source of its replenishment, fiscal policy comes down to manipulating the state budget.

Fiscal policy combines such large types and forms of financial policy as budgetary, tax, income and expenditure policies.

Among the numerous fiscal policy objectives that form the so-called tree of objectives, the main ones are:

Sustainable growth of national income,

Moderate inflation rates,

Full employment,

Smoothing out cyclical fluctuations in the economy.

Fiscal policy tools include: manipulation of various types of taxes and tax rates, in addition, transfer payments and other types of government spending.

Different instruments have different effects on the economy. Government procurement forms one of the components of total expenditures, and, consequently, demand. Like private spending, government procurement increases the level of total spending. In addition to government procurement, there is another type of government spending. Namely, transfer payments. They are not included in GNP, however, they are included and counted in personal income and disposable income. The volume of private consumption rather depends not on national income, but on disposable income. Transfer payments indirectly affect consumer demand by increasing household disposable income. And the instrument of negative impact on total expenditures is taxes. Any taxes mean a decrease in disposable income. A decrease in disposable income, in turn, leads to a decrease not only in consumer spending, but also in savings.

Modern fiscal policy determines the main directions for using the state’s financial resources, methods of financing and the main sources of replenishment of the treasury, including direct and indirect financial methods of regulating the economy.

Direct methods include methods of budget regulation. The state budget funds finance: costs of expanded reproduction; unproductive government expenses; development of infrastructure, scientific research, etc.; implementation of structural policy; maintenance of the military-industrial complex, etc. Using indirect methods, the state influences the financial capabilities of producers of goods and services and the size of consumer demand. The taxation system plays an important role here. By changing tax rates on various types of income, providing tax breaks, reducing the tax-free minimum income, etc., the state strives to achieve the most sustainable rates of economic growth and avoid sharp ups and downs in production. Important indirect methods that promote capital accumulation include accelerated depreciation policy. Essentially, the state exempts entrepreneurs from paying taxes on part of the profits that are artificially redistributed to the depreciation fund. However, in these cases, depreciation is written off in amounts significantly exceeding the actual depreciation of fixed capital, as a result of which prices for products produced using this equipment increase. If accelerated depreciation expands the financial capabilities of businessmen, then at the same time it worsens the conditions for selling products and reduces the purchasing power of the population.

Depending on the nature of the use of direct and indirect financial methods, two types of state fiscal policy are distinguished:

a) discretionary

b) non-discretionary

Fiscal policy instruments are used by the state to influence aggregate demand and aggregate supply, thereby influencing the general economic situation, contribute to the stabilization of the economic situation, and carry out countercyclical measures to counteract excessive fluctuations in economic parameters that threaten the emergence of crisis phenomena.

3.2 Discretionary fiscal policy

Discretionary fiscal policy refers to the deliberate manipulation of taxes and government spending to change real national output and employment, control inflation, and accelerate economic growth.

There are two types of discretionary policies:

stimulating

· restrictive.

Stimulating fiscal policy (fiscal expansion) is carried out during a recession, depression, includes an increase in government spending, a decrease in taxes and leads to a budget deficit.

In the short term, the goal is to overcome the cyclical downturn in the economy and involves increasing government spending, lowering taxes, or a combination of these measures.

In the longer term, tax reduction policies can lead to increased supply of factors of production and increased 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 government spending.

A contractionary fiscal policy (fiscal restriction) is carried out during a period of boom and inflation, includes a reduction in government spending, an increase in taxes and leads to a government budget surplus.

Its goal is 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 help reduce demand inflation at the cost of rising unemployment and a decline in production. Over a longer period, a growing tax wedge can serve as the basis for a decline in aggregate supply and the deployment of a stagflation mechanism (recession, or a significant slowdown in economic development), especially in the case when the reduction in government spending is carried out proportionally across all budget items and does not create priorities in favor of government investments in labor market infrastructure.

Prolonged stagflation against the backdrop of ineffective management of public spending creates the preconditions for the destruction of economic potential, which is often found in economies in transition, including Russia.

Within the framework of discretionary policy, various social programs, a state employment program, and changes in tax rates are considered.

The state employment program is one of the measures to combat unemployment and stabilize the economy. This program is being implemented at the expense of the state and local authorities. For example, widespread use in a market economy during the crisis of 1929-1933. Found a program for organizing public works. Under this program, the state, at the expense of budgetary funds, organized various types of work for the population on the principle of “just to occupy it” - sometimes some dug holes, while others buried them. Therefore, quite often, from an economic point of view, these programs were ineffective.

The main objective of these programs was to stimulate aggregate demand and relieve social tension in society in conditions of massive growth in unemployment.

Since these programs are quite wasteful, it is much more effective to implement regular countercyclical policies than to deal with the consequences of the crisis in an ineffective way.

Of course, these employment programs can be modified. Thus, to increase employment, small enterprises that provide maximum employment in their production can be encouraged. This practice is used in China.

In normal economic conditions, the government must have a strategic and clear employment program to effectively use it in a recession when people lose their jobs. Employment programs are usually quite flexible. They are very effective in the sense that, unlike public works programs, they require less costs and can be used by local authorities in any local market.

Expenditures on social programs include pension payments, various programs to help the poor, expenses on education, medicine, etc. These programs help stabilize economic development when household incomes are declining. The main disadvantage of all these programs is that they are introduced during a recession and are difficult to cancel when the economy is booming.

Changing tax rates, from this point of view, is a more effective tool in an effort to stabilize the economy.

Thus, reducing income tax rates in a short-term recession can keep revenues from declining, thereby preventing the escalation of crises by increasing consumer spending.

But there is also a drawback here. Temporary tax cuts are not always appropriate to combat a recession, since in a democratic society it is usually more difficult to raise taxes after a recession has been overcome, and it can be much easier to organize political sentiment to combat unemployment than to combat the inflation gap and overemployment.

Effective discretionary fiscal policy presupposes a competent diagnosis of ongoing economic processes, on the basis of which the government adjusts its levers.

However, it is impossible to fully know what the emerging trends in macroeconomics will result in. Therefore, the government cannot always predict the actual directions of economic development, which forces it to make decisions on setting fiscal policy with a certain delay. A time lag is formed between the need to adjust the economic levers of fiscal policy and government decision-making.

The delay in the action of the necessary levers of discretionary policy is also associated with the usual administrative procedures for organizing events caused by the implementation of a new economic policy.

The effect of adopting a new fiscal policy usually does not come immediately, because investments in production development pay off after a fairly long period of time.

The noted delays, time lags between the period of emergence of the need for new directions of fiscal policy and the receipt of the expected positive effect from their application overlap each other. This, of course, worsens the ability of discretionary fiscal policy to quickly adjust to ongoing changes in the economy and effectively correct them.

3.3 Non-discretionary fiscal policy

The second type of fiscal policy is non-discretionary, or the policy of automatic (built-in) stabilizers. The limited ability of discretionary fiscal policy to adapt to the needs caused by new economic proportions makes it necessary to supplement it with another type of fiscal policy that can continuously adjust tax revenues. This is done automatically using so-called built-in stabilizers.

A “built-in” (automatic) stabilizer is an economic mechanism that allows one to reduce the amplitude of cyclical fluctuations in employment and output levels without resorting to frequent changes in government economic policy. Such stabilizers in industrialized countries typically include a progressive tax system, a government transfer system (including unemployment insurance), and a profit-sharing system. Built-in economic stabilizers relatively mitigate the problem of long time lags in discretionary fiscal policy, since these mechanisms are “switched on” without direct parliamentary intervention.

Their essence lies in linking tax rates with the amount of income received. Almost all taxes are structured in such a way as to ensure an increase in tax revenues with an increase in the net national product. This applies to personal income tax, which is progressive; income tax; for added value; sales tax, excise tax.

In the graph, government spending is constant. In fact, they are changing. But these changes depend on the decisions of parliament and the government, and not on the growth of GNP (gross national product). Therefore, the graph does not show a direct connection between government spending and an increase in NNP. Tax revenues increase during a boom. This happens because sales and income increase. The removal of part of income by taxes restrains the rate of economic growth and inflation. As a result of the forces at play, in addition to the efforts of the government, the economy is prevented from overheating due to imbalances during the recovery.

During this period, tax revenues exceed government expenditures (T>G). A surplus arises - a surplus of the state budget, which makes it possible to pay off government debt obligations incurred during a depressed period of the economy.

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

Cyclical deficit (surplus) - a deficit (surplus) of the state budget caused by an automatic reduction (increase) in tax revenues and an increase (reduction) in government transfers against the backdrop of a decline (rise) in business activity.

Built-in stabilizers do not eliminate the causes of cyclical fluctuations of equilibrium GNP around its potential level, but only limit the scope of these fluctuations.

Based on data on cyclical budget deficits and surpluses, it is impossible to assess the effectiveness of fiscal policy measures, since the presence of a cyclically unbalanced budget does not bring the economy closer to a state of full employment of resources, but can occur at any level of output. Therefore, built-in economic stabilizers are typically combined with government discretionary fiscal policies aimed at ensuring full employment of resources.

As a result, a structural deficit (surplus) of the state budget arises - the difference between expenses (income) and income (expenses) of the budget under conditions of full employment. The cyclical deficit is often estimated as the difference between the actual budget deficit and the structural deficit.

The tax system should be improved in the following key areas:

A reduction in the tax burden is required. It is excessive since tax withdrawals during the preparation of the state budget have so far been planned in the amount of about half of GNP. World experience and theoretical developments show that the level at which mass flight from taxes begins determines the low level of tax collection. In addition, as a result of the crisis of non-payment of enterprises, the conditions for continuous production are undermined;

It is necessary to change the structure of tax revenues through a gradual increase in the level of taxation of individuals (income and property), as well as property taxes and rent payments in nature-exploiting industries, which will ensure an increase in payments for the use of natural resources. A sharp transition to preferential taxation of individuals is impossible, since the low incomes of the bulk of the population do not yet allow them to pay such taxes;

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