Fiscal Policy of the State
Fiscal policy of the state is in itsfunctions analogue of fiscal policy. This is based, firstly, on the literal translation of this concept from the Latin language: fiscus - "state treasury" and fiscalis - a term related to the treasury. Secondly, the main economic instruments of state regulation in the country are the budget and taxes, which are managed only through fiscal mechanisms.
Proceeding from the above, we can formulateDefinition: The fiscal policy of the state is a state system for regulating the economy by making appropriate adjustments to public expenditure, the taxation system and, in general, the state budget, to increase production, employment, inflation index control and effective economic growth.
State expenses and taxes are the maintools of this type of policy. Fiscal policy of the state can have a different impact on the stability of its economy (positive and negative). This policy should contain in its structure such subspecies as budgetary, tax and stabilization.
State policy aimed at internal stabilization should maintain a balance of aggregate supply and demand using instruments to smooth out economic fluctuations.
The main objectives of this policy are:
- control over the necessary level of employment;
- achieving stability in economic growth;
- controlling inflation.
The state's stabilization policy shouldcarried out both through budgetary and tax policies, and through credit and money, but only with full coherence of actions between them. This policy, due to its influence on the activities of business entities, should be fairly predictable.
As already indicated, taxes are one of theinstruments of fiscal policy, and, accordingly, tax policy is quite an important element of state management of economic processes. Therefore, specialists of this field of knowledge pay much attention to its classification and typification. It is advisable to consider types of tax policy according to certain functional criteria: by narrow specialization, by territorial sign, by the long-term goals and their scale, and by the targeted policy orientation.
Tax policy on a territorial basiscan be considered at the local, regional and federal levels. This division is conditional, as today local and regional state bodies do not have tax rights. And while only the federal center is developing the main tax tactics and strategy, and the responsibility of the lower levels includes unconditional implementation.
The sign of narrow specialization includes such types: investment, social and customs policy. This unit is based on the application value of tax policy.
The long-term goals and their scale distinguish: strategic policy, implemented over three years, and tactical, designed for a period of up to three years.
The target orientation of the tax policy provides for its various types: regulatory and regulatory, regulatory, fiscal and combined.
Fiscal policy of the state usingof its instruments affects the aggregate supply (the sum of the costs of companies) and the aggregate demand (in other words, the total costs). In this case, the revenues and expenditures of the state budget (taxes, government purchases and transfers) are used as tools.