Tax Burden is an Important Indicator of the Effectiveness of Tax Policy

Abstract

The main impact of taxes on economic activity is through the tax burden indicator. Therefore, it is necessary to analyze its impact. The problem of calculating the tax burden is one of the most important and controversial in the theory and practice of taxation. The tax burden indicator is of significant importance in solving a number of problems, which include: developing tax policy; conducting a comparative analysis of the tax burden in different countries; forming the state's social policy; forecasting the economic behavior of entrepreneurs, etc. The problem of determining, establishing and maintaining an optimal tax burden on the economy plays a special role in improving the tax system of any state. World practice shows that the withdrawal of up to a third of the taxpayer's income causes a process of reduction of savings and investments in the economy. If more than 40% of the taxpayer's income is withdrawn, this practically deprives him of incentives for entrepreneurial initiative and production growth. Therefore, constant monitoring of the level of tax burden both in the country as a whole and for individual groups of taxpayers is an extremely necessary process for developing an effective tax policy. JEL: H21; H22; H3