The tax burden is an important indicator of the economic state of the state

The tax burden is the loss of part of the net benefit to society due to a drop in the level of industrial production and, accordingly, consumption of goods below the optimal point due to the introduction of new or higher rates of existing taxes.

The concept of "tax burden" simultaneously arose with the introduction of taxes. In the 18th century Adam Smith conducted a study of the economic dependence between the receipt of funds in the state budget and the level of the tax burden. As a result, an axiom has been obtained, which states that the state will continue to benefit from a reduction in the tax burden, since released funds are available, from which additional income can be obtained and, consequently, an additional tax.

Quantitative assessment of this indicator, scientists, economists have tried to give a long time. For the first time it was possible to the German economist F. Justi, who was given the definition of this term at the macro level and is represented by the ratio between the state budget and the national income of the same state.

The tax burden is of great importance for the economy and consists in the following:

- This indicator is used when compared with the corresponding indicator of other countries, which results in the decision to implement certain tax reforms.

- The tax burden is actively used by the state in developing appropriate policies. With the introduction of new taxes, changing their rates, making changes to tax benefits, the state continuously monitors the results of the changes introduced, in the event of a negative impact on the economy, the government should respond accordingly.

- This indicator can be used as an indicator of the behavior of business entities. It is from its magnitude that the ability of an enterprise to expand its production or invest investments depends.

- At the national level, the tax burden is used for the social policy of the state. It is guided by its importance, the state can evenly distribute it among different social groups.

When calculating the tax burden, the business entity, in addition to the amount of taxes paid, also takes into account the costs that affect the receipt of these taxes. They include:

- expenses for payment of wages to the personnel of the organization;

- payment of interest on borrowed funds;

- production costs;

- costs of property insurance, etc.

Since the tax burden affects absolutely all economic processes in the state, it is monitored at the micro and macro levels.

At the micro level, this indicator is calculated for each specific taxpayer (this can be either a business entity - an enterprise or a common citizen). According to the enterprise, the tax burden can be calculated in several ways. One of them is the ratio of the amount of taxes paid to the total sales volume. The disadvantage of this algorithm is the failure to take into account the costs. The second formula, which uses net profit instead of sales , is clearer and takes into account all factors that affect simple income.

When determining the tax burden of a common citizen, the income tax (Personal Income Tax) is applied to its aggregate income.

At the macro level, this indicator is calculated using the ratio of all taxes received to GDP.

Summarizing the above, we can draw the following conclusion: an excessive tax burden is the loss of public benefits caused by the implementation of the tax policy, which lead to the reduction of many economic indicators in the state.