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

Abstract

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.

What are the Poverty and Inequality Impacts of Fiscal Policy in Turkey?

“…In both cases, however, indirect taxes are less unequalizing than in Turkey. Russia (Popova et al 2018); US (Higgins et al 2018). Turkey: Own estimates based on Turkey 2016 HBS.…”

RUSMOD — A Tool for Distributional Analysis in the Russian Federation

“…These mark a difference with respect to previous fiscal incidence instruments built for Russia, including those based on the CEQ methodology (e.g. Lopez-Calva et al 2017, Popova et al (2018)).…”

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