Redistribution of trade benefits through progressive taxation: theoretical dimensions of the issue

The study reveals the results of studying key theoretical aspects of the modern global economy, focusing on the role of international relations and trade processes in shaping micro- and macroeconomic indicators. Fundamental questions about the expediency of introducing a progressive tax system in an open trading regime are considered. The theoretical reasoning is based on the analysis of standard models of incomplete markets and competitive frictional labor markets using the Ricardian approach to the definition of international trade. Based on the analysis of empirical data, it has been established that negative changes in comparative advantages lead to a decrease in real wages of workers experiencing competition from foreign manufacturers. It is shown that the introduction of progressive taxation makes it possible to compensate for the missing mechanisms of full insurance protection and effectively redistribute income from foreign economic activity. At the same time, the progressive scale of taxes reduces the incentives for the redistribution of labor within the country, making it difficult to equalize the regional economic potential. The study of the ratio of potential benefits and associated costs led to the conclusion that the optimal degree of progressive taxation should increase in proportion to the increased openness of the economy to foreign trade. The proposed approach proves the existence of a link between the structural features of the national labor market and the tools of tax administration in the context of growing global trade and economic interactions.