Savings-Oriented Modeling of the Progressive Personal Income Tax

Abstract

The article considers theoretical and methodological aspect of a transition from the current tax rate adapted in 2001 to a progressive tax scale for personal income, the eff ect that such progressive tax might have for the national savings rate, and carries out an analysis of the correlation between the saving rate and the current income based on empirical data.
The main idea is to see how the nonlinear scale affects the formation of national savings as one of the factors of the economic growth. Base don such analysis of the empirical data of households, a new discriminatory model of the progressive personal income tax scale has been developed. Particular attention is drawn to the newly formed theory on the characteristics of the savings behavior of the middle and higher income classes. The theory has proved to be plausible and could be used to explain a number of economic phenomena. Refs 7. Figs 7. Tables 6.

Keywords:

set of tools, tax, tax on personal income, macroeconomics, macroeconomic policy, parameters of the state support, private and public interests, regulatory impact assessment