Income and wealth distribution in the European Union and Russia: comparativ analysis

Abstract

The subject of the study is the features of economic relations between income and wealth distribution/redistribution in Europe and Russia from the perspective of the need to overcome excessive socio-economic inequality. The aim of the article is to determine the level of existing socio-economic inequality, to make cross-country comparisons of income and wealth differentials in society, and then to substantiate the possibilities of applying the best practices of foreign countries to reduce socio-economic inequality in Russia. The methods of research are philosophical (dialectical, critical), general scientific (methods of scientific abstraction, the unity of the historical and logical, analysis and synthesis, induction and deduction, analogy, classification), private scientific (economic and mathematical, statistical, functional). The theoretical significance of the study lies in the development of the theory and methodology of A. Ya. Kiruta and A. Yu. Shevyakov on excessive inequality. The recommendations proposed by the authors to reduce excessive inequality in Russia represent the practical significance. The study shows that the EU countries, which are characterized by smooth income distribution, are extremely unequal in wealth distribution. The Russian economy has excessive levels of inequality in terms of both income and wealth. At the same time, there is a polarization of Russian society and a concentration of income in the hands of the upper percipient. The Gini coefficient, the Kaitz index, and the ratio of median and minimum wages demonstrate the extreme degree of inequality in income distribution among Russians. The research investigates the losses from existing levels of inequality in the EU countries and Russia through changes in human development indices. The authors conclude that socio-economic policy aimed at reducing excessive inequality in Russia should be based on the principle of social federalism. Russia needs a comprehensive strategy to combat social stratification and a consistent policy aimed at the formation of a full-fledged middle class. The authors consider it necessary to introduce in Russia a non-taxable minimum income tax, a progressive scale of gift and inheritance taxes, and the introduction of a new wealth tax.