Social Impact of the Tax System

Abstract

Taxation is a very important part of the financial system. It affects all aspects of our lives, including social and economic. The tax system and the social sphere are interconnected. Taxation influences social processes through taxation of income and real estate, as well as pricing. And the social sphere has an impact on the tax system in two directions: through the need to introduce tax benefits for certain social groups of citizens and through the fiscal orientation of the tax system. In developed countries, the tax system is quite organically connected with the ideas of social justice. But adherence to the principle of social justice through the provision of tax benefits conflicts with fiscal and incentive objectives. Tax benefits of a social nature reduce tax revenues to the budget, which ultimately leads to a general increase in the tax burden for other taxpayers. Thus, analyzing the effectiveness of the interaction between taxation and the social sphere is important both for improving the tax system and for leveling the negative impact of taxes on some social phenomena. UDC: [316.4.063:336.225.66](478); JEL: H24.