To a Question of Fiscal Federalism Problems

An issue concerning the rationalization of tax revenue distribution between the Russian Federation and its constituent entities is especially important in conditions of economic instability. The article defines the essence of fiscal federalism and considers three types of fiscal federalism existing in the worldwide practice. Studying the specifics of the current Russian model of fiscal federalism and intergovernmental fiscal relations, which are characterized by the concentration of tax revenues «in the heart», the discrepancy between expenditure obligations of federal subject and his own revenue powers, the article concludes that the Russian fiscal federalism violates the fundamental principles of intergovernmental relations typical of a federal state. Basing on statistical analysis, the authors conclude that our country’s current intergovernmental relations lead to the regions’ disinterest in the development of their tax capacity, increase in the number of subjects needing subsidies, with the number of donor entities gradually reducing. The authors suggest there are ways to improve the fiscal system in order to provide a more efficient allocation of tax revenues between the entities and the Federation. Effective solution of the growing problem of fiscal federalism correlates with further strengthening of the Russian Federation as the integrity.