Social function of individual income tax

The article deals with the role and significance of social deductions from individual income tax that is the most important instrument for implementation of the state social policy. Social tax deductions allow individuals to reduce their taxable income by the sum of separate kinds of expenses on social needs. So it is possible to reduce the acuteness of the socio-economic inequality. The article analyses changes in the composition and size of social tax deductions in comparison with the dynamics of average wages, inflation, average cost of higher education from their introduction to the present day. The author comes to conclusion about a decline in the significance and efficiency of the existing social tax deductions under the conditions of crisis, growth in the tax burden on individuals against the background of increasing unemployment, inflation, wage arrears on the one hand, and raising expenses on education, medical services and medications on the other hand. She considers directions of changing the tax policy and, in particular, the mechanisms of individual income taxation.