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Development of Tax Incentives for Investments in Human Capital

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  • Anna V. Tikhonova

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation; Russian State Agrarian University — Moscow Timiryazev Agricultural Academy, Moscow, Russian Federation)

Abstract

The article discusses the basics of building a system of tax incentives for investments in human capital, capable of ensuring economic growth of the Russian Federation. The relevance of this issue is explained by three circumstances: first, investment in human capital is a key tool for protecting workers from the adverse effects of automation; second, human capital accumulation is closely correlated with income inequality and poverty levels; third, it is a key factor in stimulating rapid economic growth. The purpose of the study is to work out directions of development of tax incentives for investments in human capital on the basis of review and systematization of domestic and foreign literature. In accordance with the goal, the following tasks are defined: to identify areas of taxation influence on human capital formation; to formulate the principles of tax stimulation of investments in human capital; to characterize the tax instruments stimulating growth of investments in human capital; to highlight the state approaches to tax stimulation of investments in human capital of individuals. The scientific literature in the field of human capital development and tools for its regulation was analyzed, and the use of tax incentives was substantiated. The principles of tax stimulation of investments in human capital are formulated and described: the principle of risk minimization, the principle of multidirectionality by subjects of stimulation, the principle of differentiation by types and forms of human capital, and the principle of systemic measures of state support. The study presents three groups of tax incentives focused on the identified areas of impact and taking into account the formulated principles of stimulating investments in human capital.

Suggested Citation

  • Anna V. Tikhonova, 2023. "Development of Tax Incentives for Investments in Human Capital," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 116-133, February.
    • Handle: RePEc:fru:finjrn:230107:p:116-133
    DOI: 10.31107/2075-1990-2023-1-116-133
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    More about this item

    Keywords

    economic growth; tax incentives; investment in human capital; tax burden; employees; education;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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