Distributional impact of taxes and social transfers in Russia over the downturn

Journal of European Social Policy. 2018. Vol. 28. No. 5. P. 535–548.

Popova D., Matytsin M., Sinnot E.

Low oil prices and the recession in Russia which started in 2014 are increasing pressures for fiscal consolidation, after more than a decade of prosperity. This paper assesses the distributional impact of the main tax and social spending programs in Russia in 2014 by applying a state-of-the-art incidence analysis. Overall, the Russian welfare state achieves a moderate reduction in inequality through tax-benefit policies by international standards. Most redistribution occurs through pensions. Major limits on the redistributive effect of tax-benefit policy include the large share of tax revenues that come from (regressive) indirect taxes, the neutral impact of personal income taxes and the low share of spending that goes on social assistance targeted to low-income groups. Tax-benefit policy also has an important impact on the age distribution of income, as households of working-age people (with and without children) subsidize pensioner households.

Keywords: фискальная политика, Российская Федерация, fiscal policy, государство благосостояния, welfare state, income distribution, перераспределение, распределение доходов, tax-benefit policy, redistribution, налогово-бюджетная политика в России, fiscal incidence, Russian Federation

Publication based on the results of: The analysis of social and economic inequality and redistribution policy, evaluation of the standard and quality of life of various social groups, and the research of the factors of healthy and active ageing (2017)