FISCAL POLICY OF THE

STATE
1. The state budget and his structure
2. Taxes and tax system. Curve of
Laffer’s
3. Discretionary and on
discretionary (automatic) tax-
budget policy
 Tax- budget policy - it is influence of the state on the level of
business activity by means of change of the government
spending and taxation. A tax- budget policy influences on the
level of national income and, consequently, on the level of
production and employment volume, standard of prices, it is
directed on a fight against unemployment and inflation. If we
want to find out essence of tax - budget policy it is needed to
consider, that is the state budget.
 State budget - it is a financial account in which the sum of
profits and charges of the state is presented for certain period
(usually for a year). Particular interest is an analysis of execution
of the state budget in which it is evidently possible to expose
divergence between intentions of government and actual
divergence profits. Such different off-budget funds behave to
the budget. On the quantitative composition they not always are
included in the complement of budget. But on principle of
distributing and use they are equivalent to the government
budgetary spending.
Taxes and tax system. Curve of
Laffer.
 Tax - it is a form of the forced alienation of
results of activity of subjects, realizing the tax
duty, in a public or communal domain, which
is brought in the budget of the proper level (or
having a special purpose fund) on the basis of
law (or act of organ of local self-government)
and comes forward as obligatory, no-purpose,
absolute, gratuitous and irretrievable payment.
 Depending on the competense of organ which enters the action of tax payment on the proper territory:
 а) общегосударственные- taxes and collections, set by Verkhovna Rada of Ukraine, are put in an operation
exceptionally by the laws of Ukraine and operating on all territory of Ukraine;
 б) local - taxes and collections the list of which is set by Verkhovna Rada of Ukraine are put in the operation
of self-government local organs and operate on territory of separate regions of Ukraine.
 2. Depending on the channel of receipt.
 а) state are taxes, fully entering the State budget;
 б) local are taxes, fully entering local budgets;
 в) proportional are taxes which are distributed between the State and local budgets in a certain proportion;
 г) off-budget are taxes, entering certain funds (on occasion, true, they must all the same get through a
budget).
 3. Depending on a payer:
 а) Taxes from legal entities (income tax);
 б) Taxes from physical persons (income-tax, tax on trade et cetera)
 в) Mixed are taxes, supposing as a payer and legal, and physical entities (tax from the proprietors of
transport vehicles, land-taxes et cetera)
 4. Depending on the form of levying:
 а) Lines are taxes, which levy in the process of acquisition of material welfares, determined by the size of
object of levying, join in the cost of commodity and paid by a producer or owner;
 б) Indirect (on a consumption) – taxes which levy in the process of expense of material welfares are
determined by the size of consumption, included as a raise to the cost of realization of commodity and paid
by an user.
 The levy of taxes is based on the use of different rates of taxes is the size of tax on unit of taxation.
 Distinguish the followings types of rates:
 hard rates are set in an absolute sum on unit of levying regardless of size of profit (tons, things, a
consignment)
 proportional rates operate in an identical percentage ratio to the object of tax without the account of
differentiation of his size
 progressive rates suppose the progressive increase of rate of tax as far as growth of profit
 regressive rates suppose a tax cut as far as growth of profit.
 Budgetary deficit
 A state house is an inevitable generation of deficit of budget, reasons of which
are related to the downstream, growth of costs, emission of money, growth of
expenses on financing of military industrial complex, growth of volumes of
shadow economy, unproductive charges, losses, thefts et cetera
 Intercommunication of budgetary deficit and national debt shows up in the
issue of loans for coverage of budgetary deficit, that results in subsequent
growth of promissory consequences.
 A budgetary deficit is exceeding of charges above profits.
 A national debt is a sum of the unliquidated credit, accumulated for all the
time of existence of country.
 A capital debt is a sum of the unliquidated debt obligations of the state,
including a percent.
 External is a debt citizens by organizations of foreign countries.
 A floating debt is charges on payments to the creditors and on redemption
of obligations, the term of payment of which came.
 With appearance of debt a duty appears by his management
 The burdensomeness of national debt and
imposing of terms at his forming will result in
that in the modern terms of country try to pass
from the policy of financing deficit to a self-
supporting budget.
 A new fiscal policy finds expression in the
changes of profitable part of the state budgets
foremost, stimulation of investment activity
and expansion of tax base due to growth of
profits and profitability of national economy.