The Moscow Times
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President Schekochikhin Urges Federal Parliament for Tax Reform
Moscow -- The Liberal Party's leader, President Alexei Schekochikhin, looks to close the tax loopholes in the Republic's code. The ITS (Internal Taxation Service) issued a report that stated approximately 2% of Russians keep exactly 45% of the wealth of the Republic. Moscow's most lavish neighbourhoods are littered with the riches of the 2%. The way that the income tax works currently allows for many of the wealthiest citizens to claim that their income comes from what is known as capital gains, which is not taxed at the same rate. The current average tax rate for the Russian people of the Republic is 28%, much higher than the capital gains tax, which is at an embarrassing 8%. During a speech at the International Business Centre, the President said:
"It is time that the Republic takes a stand on closing the inequality gap. The middle class and lower class citizens are suffering under an unfair tax burden. We need to make sure that those who are making millions of rubles are contributing to society at the same levels. Some may call it socialism, but it makes sense to ensure that we are all putting in an equal share."
The statement was immediately met with criticism from the Federal Parliament, namely Prime Minister Elisabeta Korzhakova and her Conservative Party majority. The calls in the past for President Schekochikhin to listen to the Russian people and continue. The Liberal Party in opposition of the Conservatives have tried many tactics to slow Conservative legislation, including the President and his veto powers, but the Conservative movement is gaining and the President may find himself on the back foot. Prime Minister Korzhakova said that the idea of having everyone pay 28% in income tax was "absurd talks reminiscent of the communist days where many at the bottom suffered while a select few in government received kickbacks and benefits at the expense of the majority".
"This insistence on reworking the tax code to ensure that all citizens pay higher taxes is exactly why the Liberal Party are working against the idea of the Republic. Instead of being fiscally responsible, they want to engage in the politics of taxation and deficit, where they run up totals on the public debt and insist everyone pay higher taxes to cover for it. Russians must keep their money and we should be giving more of it back. They need less government, not more," Prime Minister Korzhakova said on the floor of the Federal Parliament.
The public opinion is split on the issue, and very evenly divided in terms of who is doing a better understanding the Russian people, with a very slim majority siding with the President's opinion while a sizeable minority stand with Prime Minister Korzhakova's stance. The divided government will have to work together to work on the tax code, as it sets up a showdown between the Liberal President and the Conservative legislature on the federal budget. If the Federal Parliament cannot pass a budget to the President within a month, nor can they override the presidential veto, the Parliament must be dissolved and new elections held.