№ 10/2019

№ 10/2019

Fìnansi Ukr. 2019 (10): 58–72https://doi.org/10.33763/finukr2019.10.058

TAX POLICY

MELNICHUK Anna ¹

¹University of the State Fiscal Service of Ukraine
OrcID ID : https://orcid.org/0000-0002-0640-0334

Aging of the world’s population: implications and challenges for taxation

The article discusses the challenges and consequences for the future socioeconomic development, budget and tax system of the state caused by demographic aging of the population in most countries of the world. The purpose of this article is to generalize the results of modern scientific research on the specific impact of the aging оf the population on the tax system and the dynamics of tax revenues in individual countries and the likely consequences of raising individual taxes to address the challenges of fiscal imbalances and meet the growing needs of the elderly. It is established that the aging of the population affects the dynamics of tax revenues not only by reducing the number of people of working age and for that reason, which leads to an increase in inequality in the distribution of income and poverty, and indirectly ? due to the impact on labor markets, employment, labor productivity, consumption and savings, interest rates, unemployment and more. The results of the research to quantify such effects indicate its ambiguous nature. It is established that raising taxes on labor is undesirable for addressing the financial problems posed by an aging population, since such actions lead to a reduction in work incentives and an increase in unemployment. To some extent, the consumption tax will also have a negative impact, as the tax burden on senior people will increase. In the research, the following methods are used: induction and deduction, logical generalization, critical analysis, and comparison. A comparative analysis of the main instruments (tax increases, spending cuts, increased borrowings, raising the retirement age), which are considered in scientific English-language publications in terms of their ability to overcome financial problems caused by population aging, will serve as a theoretical basis for justifying recommendations on how to solve similar problems in Ukraine.

Keywords:population aging, consequences of population aging, tax payments, personal income tax, consumption taxes, fiscal imbalances

JEL: E21, H24, J11

Melnichuk A. . Aging of the world’s population: implications and challenges for taxation / A. Melnichuk // Фінанси України. - 2019. - № 10. - C. 58-72.

Article original in Ukrainian (pp. 58 - 72)

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