"On Redistribution of Authorities Among Levels of Power"
Discussion of UNIFEM project Gender Budgets in Russia 2006/div>

Discussing Budget-2007

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Can introduction of a tax on childlessness for bachelors and childless adults help stimulate birth rate in the light of a famous demographer’s slogan "Protect the men!"

Speaking about the tax on childlessness (for bachelors, single adults or small families), let us remember that the tax was introduced in the country’s hardest times, in 1941, and abolished in the 1990’s. The unjust nature of the tax was obvious, that is why it was fist abolished for families with 1-2 children, who had to pay it, and then for single women. Only unmarried men and childless couples remained. Only those who could not have children for health reasons were exempt, however, there were quite few people who took a risk of bringing a certificate and make known their personal information of this kind at work.

LET US LOOK AT OLD AND NEW ASPECTS OF THE ISSUE:

1. ECONOMIC FACTORS. Russia is not that poor and in need of resources as in war times. We have a stabilization fund, gold and currency reserves, budget surplus (in 2007 it amounted to 1.5 trln roubles, i.e. 20% of the budget). That is why the Government of Russia (Medvedev, Kudrin, Zurabov) plans to establish within the stabilization fund a special fund for future generations for paying maternity allowance ("maternity capital").

2. GOVERNANCE FACTOR. Introduction of a new tax is a costly process that requires additional staff, equipment, etc. Tax collection from a lot of individuals is much more expensive than collection of any other taxes. The tax is not feasible, as it is difficult to give a definition and monitor bachelors and single, especially today, when unregistered marriage is widespread, divorces are frequent, migration is large-scale, etc.

3. SOCIAL FACTOR/POOR LIVING STANDARDS. A salary of 9,000 roubles, 25% of staff earn less than the subsistence level (3,600 roubles in 2006 per a working person). Including good parents, like medical workers, teachers, scholars, etc. If the idea is to gather the necessary amount of 130 billion roubles for maternity allowance, these categories will have to pay a new tax in addition to the income tax. As a result people will move to the informal sector of the economy and the budget will not receive the required tax payments. Thus, not only taxes, but also insurance payments, out of which women today receive maternity and other allowances, will not be paid in the budget. Encouraging people to have a second child, we reduce the prospects of improvement for other children.

4. AGE FACTOR. Majority of taxpayers are young people. Can we speak about taxes for youth/young people? We know the amount of scholarships, if paid at all. All students try to earn extra at least to provide for themselves, be somewhat independent from their parents. One has to pay for education, healthcare, holidays, while housing is also an issue. At the same time, they have a natural wish to have a family and children. This is the main reason they want to save in order to fulfil their plans, to have a successful career and a family. Do we really want to make it difficult for them?

5. MORAL AND ETHICAL FACTOR. There is a gender imbalance in Russia, with women comprising a major part of the population. As a rule, women want to have a normal family and have children in marriage. Introduction of a tax for childless young women will lead to increase in the number of single mothers, who require additional support from the state. At the same time it is better for a child to have a family with two parents.

6. MEDICAL FACTORS. The current state of reproductive health is not very good. According to the data of the State Duma Committee on Health Protection, there are 30 million infertile women and the same number of infertile men. According to estimates, millions of them would like to have children, but cannot afford the cost of assisted conception. It might be the time to ask the state to fund a medical infertility treatment programme. At the same time, infertile married couples could spend money for treatment if they could afford it instead of paying the tax on childlessness.

7. POLITICAL FACTORS. Young active citizens will be unhappy with the discriminating tax and as a result their trust to the authorities will decrease.

WHAT SHOULD BE DONE?

If the country needs more children rather than more money, the approach to solving the demographic programme should be different. LET US SUPPORT THOSE WHO HAVE CHILDREN. It is a common knowledge that a system of incentives is more effective than that of penalties. It is a big question, IF THE SYSTEM OF PENALTIES WILL LEADE TO INCREASE IN THE NUMBER OF CHILDREN?

Let us look HOW WE CAN SUPPORT THOSE WHO HAVE CHILDREN?

1) Increase tax benefits for children. Introduce tax deduction from income in the amount of the minimum of 3,200 roubles per child, instead of current 700 roubles. Grant the right for benefits to people with the annual income up to 100,000 roubles (currently 30,000 roubles). It will give up to 1,000 roubles extra per child in a family. People will work to earn more; as a result, tax and insurance payments to the budget will increase.

2) Introduce a system of family taxation widely used abroad. The system gives an opportunity to choose between a personal tax (per each taxpayer) and taxation of the family's aggregate income taking into account the number of dependants and favourable for the families with many dependants (this system for Russia was developed by the Institute for Social and Gender Policy Foundation).

3) There are positive examples of France, Italy, etc. where child allowances are paid out of insurance payments of the employer interested in reproduction of workforce. In some countries both employers and employees pay insurance fees (Greece, Portugal, etc.). The principle of joint responsibility of the well-to-do in favour of deprived children is employed, which seems quite fair for all and not that discriminating for certain groups.

CONCLUSIONS

1. Let us not take money from childless and give them to other people's children. Let them use the money to treat infertility. Sure, inability to have children does not make people happy.

2. Let us not reduce the chances of young men to start a family. Today a lot of people do not marry because they do not have a possibility to provide for a family according to current standards.

3. Maternity allowance ("maternity capital", the notorious 250,000 roubles, will not solve the problem. It will require large investments in education, housing, and women's pensions.)

Children require every day expenses: the monthly subsistence level of 3,600 roubles per child. An employee with a minimum salary of 1,100 cannot provide for a child, with an average salary of 9,000 roubles it is possible to have one child, but in this case a person will hardly make ends meet taken the current cost of life. Therefore, without an adequate salary one cannot speak about having two children.

Why not an allowance for a mother who does not work, but parent's salary? Because work is a source of any payments, including social ones. If people do not work, there will be no source for demographic or other social policy. Therefore, it is necessary to combine economic stimulating measures for those able to work and social incentives in the situation when the dependent's burden increases with a birth of a baby. Thus we can contribute to both economic development and improvement of the demographic situation in the country.

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