Russia and the Lack of Tax Collection :: International Politics Economics USSR Essays

Russia and the Lack of Tax Collection The economic crisis in Russia has become an important topic within the international political and economic world. The virtual collapse of the Russian economy has had a domino effect in terms of decreased economic stability in a number of countries, especially countries in Latin America. Now the problem Russia, the United States, and basically every major country in the world need to solve is the problem of how exactly to get the Russian economy going again to prevent not only the world economy from collapsing, but also to keep Russia from ceasing to exist. According to Daniel Treisman, in his article "Russia’s Taxing Problem," Russia’s inability to collect taxes, amongst other things, is quickly becoming "†¦the greatest threat to it’s economic and political stability," (Treisman, 1998). Tax collecting, a viable source of revenue needed by most countries in order to successfully run a state, almost does not exist in Russia. I plan to present in this paper th at tax collecting and lack thereof is not the only problem causing this crisis, but it is a serious one. It is mainly caused by corruption and the lack of the government to successfully overcome this corruption to help save their country from economic and political disaster. The economic system in Russia has undergone some significant changes in the last decade. (For the purpose of this paper, I am going to attempt to explain a little of what I understand to be important changes in the economy that effected tax collection). Early Russian economy was characterized by strong governmental control over the activities of enterprises. In other words, the state sought to control all aspects of society, including the economy and allocation of monies to businesses and private citizens and the fixing of prices to promote economic stability. This, however, led to the increase of "black" markets where prices were often inflated and also led to wasteful practices of resource use (Alexashenko, 2-3). The economy of Russia has taken a dramatic turn from this characterization, and has attempted to become an economy characterized by more production control by private sector enterprises with less government involvement (Alexashenko, 3-6). This gives private companies and i nvestors more control over their monetary gains and losses and makes it easier for the rich to become richer and the poor to become poorer. It also hurts smaller businesses because they do not have the influence or control of the bigger enterprises.