Russia’s Communists Propose Progressive Income Tax…….Just Like German Communists

Posted: January 9, 2015 in Econ 101, Society and Culture

SEE ALSO:  Russia Helps Belarus Into WTO Through U.N. Fund

SEE ALSO:  German State Governor’s Own Party Has Communist Roots


.

Russia’s Communists Propose Progressive Income Tax, ‘Anti-Usury Law’
© Sputnik/ Vladimir Vyatkin
08.01.2015

Russian Communists in the Duma are planning to propose two draft bills once parliament starts up again after the holidays. One proposes the introduction of a progressive income tax, the other an ‘anti-usury’ law aimed at banks charging exorbitant rates.

MOSCOW,  — The Communist fraction of Russia’s lower house of parliament plans to propose a draft bill on the introduction of a progressive income tax in the country once the parliament goes back to work after the New Year’s holidays, RIA Novosti has reported.

The bill proposes that Russians earning less than 20,000 rubles a month (equivalent to about $320 US) be exempt from paying income tax entirely, while those earning 400,000 or more (about $6,400) be taxed at a rate of 35 percent. Communist Party Duma deputy Vadim Solovyev told RIA Novosti that the bill, which they had originally proposed two years ago, has been modified and updated.

“[Income] over 20,000 rubles would be taxed along a progressive scale. Income between 20,000-50,000 rubles would be taxed 10 percent, income from 50,000 to 100,000 13 percent, income from 100,000-200,000, 15 percent, income from 200,000 to 400,000, 25 percent, and income over 400,000 — 35 percent,” Solovyev explained.

In Solovyev’s words, those who earn more could afford to pay more into the budget. Russia presently has a 13 percent flat income tax rate, one of the lowest rates in Europe. The flat rate was introduced in 2000 as part of a series of measures aimed at increasing revenues and income tax compliance rates during a difficult period in Russia’s transition to capitalism.

Average monthly wages in Russia are presently about 32,250 rubles a month (about $515 US, not accounting for purchasing power parity).

Communists Also Set to Introduce ‘Anti-Usury’ Bill

The Duma’s Communists are also set to introduce a so-called “anti-usury” bill aimed at assisting honest borrowers who have been stuck with high percentages, penalties and bank fees after paying off the principle of their loan. According to Central Committee Secretary Sergei Obuhov, one of the authors of the project, people who have paid the principal of their loan should not become “banks’ slaves.”

Accordingly, the bill will propose that percentages and penalties should be limited by law.

© Sputnik/ Ruslan Krivobok

“Since the government is conducting an offshore amnesty, it should also carry out a credit amnesty. If we are willing to provide amnesty for funds which have been stolen and exported abroad to offshore [tax shelters], we should also forgive citizens for the debts they have been made to pay after having repaid their loan principle. An ‘anti-usuary law’ has been drafted and we will introduce it [for debate] right after the New Year,” Obuhov told RIA Novosti.On December 4, 2014, Russian President Vladimir Putin proposed an amnesty on capital returning to Russia. In November, the Russian government amended the country’s tax code forcing the Russian owners of foreign-based companies to inform Russia’s Federal Tax Service of their profits.

SOURCE: http://sputniknews.com/politics/20150108/1016676694.html

.

Why Taxation Must Go Global
OCT 30, 2014
By Wolfgang Schuble
.

BERLIN – We are witnessing profound changes in the way that the world economy works. As a result of the growing pace and intensity of globalization and digitization, more and more economic processes have an international dimension. As a consequence, an increasing number of businesses are adapting their structures to domestic and foreign legal systems and taxation laws.

Thanks to technical advances in the digital economy, companies can serve markets without having to be physically present in them. At the same time, sources of income have become more mobile: There is an increasing focus on intangible assets and mobile investment income that can easily be “optimized” from a tax point of view and transferred abroad.

Tax legislation has not kept pace with these developments. Most of the tax-allocation principles that apply today date back to a time when doing business internationally primarily meant transporting goods across a border to a neighboring country. But rules that were devised for this in the 1920s and 1930s are no longer suitable for today’s international integration of economic processes and corporate structures. They need to be adapted to the economic reality of digital services.

In the absence of workable rules, states are losing revenue that they urgently need in order to fulfill their responsibilities. At the same time, the issue of fair taxation is becoming more and more pressing, because the number of taxpayers who make an adequate contribution to financing public goods and services is decreasing.

The resulting tensions between national fiscal sovereignty and the borderless scope of today’s business activities can be resolved only through international dialogue and uniform global standards. Within the European Union, permitting groups of states to forge ahead with joint solutions to issues that can be addressed only multilaterally has worked well in the past. If such measures prove successful, other states follow.

This approach can also serve as a global governance model for resolving international problems. In today’s world, even large states cannot establish and enforce international frameworks on their own. Groups of countries still can. This has been demonstrated in the context of financial-market regulation; it is starting to become clear with regard to the regulatory framework for the digital economy; and it is now being confirmed in the area of taxation.

The Seventh Meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes took place in Berlin this week, bringing together representatives from 122 countries and jurisdictions, as well as the EU. A joint agreement on the automatic exchange of information on financial accounts was signed on Wednesday.

The joint agreement was originally an initiative by Germany, France, Italy, the United Kingdom, and Spain. Roughly 50 early-adopter countries and territories decided to take part, while other countries have indicated their willingness to join.

The agreement is based on the Common Reporting Standard, which was developed by the OECD. Under the CRS, tax authorities receive information from banks and other financial service providers and automatically share it with tax authorities in other countries. In the future, virtually all of the information connected to a bank account will be reported to the tax authorities of the account holder’s country, including the account holder’s name, balance, interest and dividend income, and capital gains.

Various measures are in place to ensure that banks can identify the beneficial owner and notify the relevant tax authorities accordingly. The CRS thus expands the scope of global, cross-border cooperation among national tax authorities. In this way, we can establish a regulatory framework for the age of globalization.

The automatic exchange of information is a pragmatic and effective response to the perceived lack of global governance regarding international tax issues. By making taxation fairer, governments will have a positive impact on people’s acceptance of their tax regimes.

This great success in the fight against international tax evasion would have been unthinkable only a few years ago. Now it is important to continue the efforts of the OECD and the G-20 in the area of corporate taxation. We need to make sure that creative tax planning in the form of profit-shifting and artificial profit reduction is no longer a lucrative business model.

A “beggar-thy-neighbor” taxation policy, by which one country pursues tax policies at the expense of others, is just as dangerous as beggar-thy-neighbor monetary policies based on competitive currency devaluation. It leads to misallocations – and will ultimately reduce prosperity around the world.

That is why we need to agree on uniform international standards in order to achieve fair international tax competition. The progress achieved in Berlin on the automatic exchange of tax information shows that, by working together, we can realize this goal.

SOURCE: Germany’s Minister of Finance Wolfgang Schäuble Promotes Globalist Tax Collection For E.U.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s