Rational taxation as a factor in reducing interregional differentiation and stimulating the growth of average per capita incomes in the regions of the Russian Federation

Kudrov A.V.

Central Economic and Mathematical Institute of the Russian Academy of Sciences

The paper will present a model explaining the differences in average per capita income between the regions of the Russian Federation and consider the problem of irrational tax burden of the Russian regions. According to the results obtained, the characteristics of regional economic specialization, GRP per capita and per capita level of subsidization of regions are directly related to the average per capita income. This allows us to build a model for average per capita incomes by regions of the Russian Federation, according to which, for example, a decline in the level of manufacturing industry can lead to a significant decline in average per capita incomes, which, in turn, exacerbates the problem of income inequality. Further, the paper will consider the problem of irrational tax burden, which arises if a planner can introduce budget-neutral targeted taxes and subsidies to induce a redistribution of these resources across regions and obtain a reduction in interregional differentiation in average per capita income. The obtained estimates of Pareto-efficient redistribution of resources are uneven between regions and depend on their specialization. It will be shown that irrational tax burdens of the Russian regions can be a serious obstacle both for the reduction of interregional inequality in average per capita income and the development of the country.

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