Taxation of Wealth and High Income: Features of the Fiscal Policy of the Republic of Moldova

In countries with developed democracy, the level of taxation of individuals tends to differentiate depending on the amount of income received. At the sametime, first of all, special taxes are imposed on luxury goods, elite housing and other attributes of wealth that are inaccessible to the absolute majority of the population. And in parallel, differentiated income tax rates are introduced. During the years of independence, a community of citizens has also formed in Moldova, which in the poorest country of Europe, on the one hand, demonstrates their elitism with high levels of expenditure that emphasize their wealth, and on the other hand, they pay taxes at rates, like the absolute majority of citizens. Attempts to impose taxes on luxury, as in a number of other post-Soviet states, so far largely demonstrate their inefficiency. Moreover, in Moldova, their list and directly the tax rates themselves are reduced. And all this is happening against the background of high corruption in the country for four and a half years, remaining unpunished and unprecedented theft from the banking sector of amounts equivalent to one billion euros. At that time, it was equivalent to 42% of the entire money supply in the country in lei in cash and non-cash forms for individuals and legal entities. Even Western development curators of the Republic of Moldova were forced to admit that the country is a seized state. And from October 1, 2018, the Republic of Moldova moved to a one-tier system of taxation on income. The article presents the results of studies that demonstrate the inadequacy of the fiscal policy in the field of wealth taxation, which are discordant with the accumulated world experience. The methodological basis of the research is a retrospective analysis of the consequences of the introduction of various forms of the luxury tax in Moldova and tax rates on personal income. The main results of the study are the evaluation of existing forms of wealth taxation, the identification of inefficient and erroneous approaches to solving this problem. This will allow modernizing the current taxation system in accordance with the practice of civilized countries and suggest mechanisms for redistributing the fiscal burden between the richest taxpayers and the rest of the people, both in Moldova and in other countries in the transition economy.