Smoothing income inequality of Russians based on regulation of taxation of individuals

The problem of smoothing income inequality using various tools is outlined in the list of priorities of the National Security Strategy of the Russian Federation. One of these important tools is the regulation of taxation of personal income. This study analyzes the effectiveness of the personal income tax (personal income tax) as a tool for reducing income differentiation, with an emphasis on the dynamics of its parameters from the beginning of the 19th century to 2025, as well as regional peculiarities in the subjects of the Northwestern Federal District. The paper shows that after a long period of applying a flat tax scale (from 2001 to 2020), progressive elements are gradually returning: first, a 15% rate was introduced for incomes over 5 million rubles, and from 2025, a five-tariff progressive scale (from 13 to 22%). The results show that, despite the growth in the number of high-income taxpayers, their share in the total number of personal income tax payers remains insignificant (less than 0.2% on average in the Northwestern Federal District). This limits the social effect of the changes preceding the five-step scale. An analysis of data from the Federal Tax Service for 2011–2023 revealed a high concentration of income among the well-off segments of the population in the Kaliningrad Region, where the incomes of several thousand taxpayers at a rate of 15% are comparable to the total incomes of hundreds of thousands of citizens taxed at a rate of 13%. At the same time, the tax deductions that have replaced the non-taxable minimum cover a wide range of socially significant expenses, but their structure, especially investment deductions for an individual investment account, can increase inequality by stimulating the well-being of wealthier groups of the population. In conclusion, we conclude that additional measures are needed to increase the social orientation of personal income tax, including the possible introduction of a tax-free minimum for low-income groups of citizens (for example, those with incomes below the subsistence minimum or minimum wage), as well as the expansion of the automated tax deduction mechanism, which is scheduled to be launched in 2026.