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Opinion: why Russia’s ‘parasitism’ law could be critical for its creative industries

Opinion: why Russia's 'parasitism' law could be critical for its creative industries

A proposed law in Russia designed to raise taxes would hit freelancers in the creative industries particularly hard, damaging a sector with huge potential for growth

24 October 2016

Rumours about a potential “social parasitism” law have been doing the rounds in the Russian media and internet for nearly two years now. While western countries are discussing the possibility of a universal basic income, the speculative proposals under discussion in Russia include making unemployment a criminal offence for everyone who is fit for work, introducing an annual charge for anyone who doesn’t pay income tax, or charging unemployed people for currently free social services like healthcare. Suddenly, oligarchs with shady tax records and poor freelancers alike are united in their opposition to the hypothetical law.

And while the Ministry of Labour insists that the law is not in the works, the deputy prime minister for social affairs and the Minister of Health have argued for the necessity of such measures, and they are regularly discussed on official platforms like the newspaper and government daily Rossiyskaya Gazeta. Only a few days ago TASS reported that, according to an unnamed source in the Russian government, the law could potentially concern 13-15 million Russians who don’t pay tax without “socially justified reasons”. Of those people, the source claims, the government could only realistically “enforce” five million, which will bring in about a 100 billion roubles (approximately $1.6 billion) to the state budget each year.

Some argue that the law is impossible and its approval could never happen in modern Russia – mirroring the arguments put forward about the “gay propaganda” law that seemed just as impossible right up until the moment of its acceptance. For a while now Russia and other post-Soviet countries have been lauded as a refuge for young creatives who feel overwhelmed by the need to make money in western countries: every year a new post-Soviet city seems to be branded the “new Berlin”. But a law like this would put a strain on Russia’s creative industries in which the majority of people freelance, some not paying tax due to the onerous bureaucracy involved. Others don’t do any paid work at all — that’s just what creative work is like sometimes. If these freelancers are squeezed, the new Berlins will have to mushroom somewhere else.

The discussion plays to the notion that art is not a “real job”

The language being used in the discussions around the law hails from the Soviet era and stigmatises those who don’t do any formal work as recognised by the state, branding them “social parasites”. This plays to the notion that art is not a “real job” and creates additional difficulties in a professional field that is already practically a Survivor-style obstacle course. In the USSR, not working was practically outlawed because, according to the constitution, labour was not a right but an obligation. Thousands of people were prosecuted, with poet Joseph Brodsky being one of the most famous cases — he was sentenced to five years of hard labour in 1964, 23 years before he won the Nobel Prize in Literature. Others had to take on unqualified jobs just to keep off the Party’s radar, a desperate measure that certainly didn’t help the creative process. We will never know now how many potential Brodskys we lost to unloading freight cars and janitorial jobs.

A similar “social dependency” law has also existed in Belarus since April 2015 and is a slightly softer version of the Soviet one — anyone who doesn’t pay regular tax has to pay an annual charge of about $250 to the state or risk administrative arrest, community service or an even bigger fine.

But what about the freelancers who make money and don’t pay taxes? They are often the target of news stories and opinion pieces that praise the potential law, heavily employing the parasitism terminology and branding freelancers as freeloaders who don’t contribute anything to the budget or society. Ignoring the disturbing narratives, we have to admit that this situation does happen sometimes. Not paying taxes is wrong but it sometimes happens in the creative industries, especially for those who are at the start of their career and haven’t yet figured out how to exist professionally and legally — both of these processes are often very complicated in Russia. And while the situation is far from ideal, clamping down on this would do more damage to the creative industries than it is worth for the gain in taxes— especially considering the measly freelance fees involved.

Blaming the lack of funds in the budget on freelancers is violently cynical

And besides, in a country with the corruption, money laundering and oligarch tax evasion levels of Russia, blaming the lack of funds in the budget on freelancers is violently cynical. One way to solve the issue would be to make the process of complying with the existing laws easier. Fewer obscure forms to fill out, fewer half-day queues to speak to rude bureaucrats, a clear online application process and guidelines – improvements that several countries’ tax affairs could benefit from really. But the law in its currently discussed forms targets the wrong people with the wrong tools. Tax the oligarch, leave the poor artist be.

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