Taxation and Opposition- USSR 1928
State Publishing House, 1928
TAXATION AND OPPOSITION.
The Council of People's Commissars of the USSR decided to study the distribution
of taxes in our country between different parts of the population. To do this, a
commission was formed consisting of leading creatures from the Narkomfin (Frumkin,
Levin), the Communist Academy (Yu. Larin, Kritsman), the State Planning
Commission (Strumilin) and the Central Statistical Office (Pashkovsky).
All available materials, information and estimates were delivered to the
commission and re-checked, and the missing data was additionally collected.
After four months of work, on October 25, 1927, the commission unanimously
approved the results presented below.
When calculating, all taxes were taken into account without exception: both
state and local. All taxes, both directly paid (agricultural tax, trade tax,
income tax, and others) and indirectly levied on the population (in the price of
purchased goods or services provided, for example, excises on vodka, salt, yarn
and other items, customs duties on foreign goods included in the price of
railway tickets, taxes, etc.). According to available information, calculations
were made of how many of which goods each part of the population consumes and
how much taxes are paid on them, paid not directly, but in the price of the
In order to compare the severity of taxes for different parts of the population,
a summary and verification of all available information about the income of each
part of the population and the number of non-earning family members was made.
Thus, it was found out how much each part of the population (each class) has per
capita in the average annual income and how much of it goes to pay all taxes
(direct and indirect, state, and local). Of course, at the same time, all
expenses for running their own household were deducted from the income of each
family (for those families that have their own production or trade or other
household). For example, from the income of the peasants, the expenditure on
feeding livestock and on seeds (for those who have livestock and who sow), etc.,
was deducted in advance. This means that the percentage of tax burden was
determined in relation to such a family income as it remains in excess of the
costs of their production or trade or other economy.
The entire population of the USSR in 1925/26 was only 144 million people. In
1925/26, out of every 1,000 people, each individual stratum of the population
accounted for the number of inhabitants indicated in the table below. The
amateurs have already been counted here together with the non-earning members of
their families, and the entire distribution has been checked and its correctness
approved by the same commission of the Council of People's Commissars. Here is
Percentage in the population of the USSR.
1. Proletarian non-agricultural population
2. Non-proletarian labor non-agricultural
3. Small, medium, and large capitalist non-agricultural
4. Declassed population (prisoners, beggars,
5. Proletarian agricultural population (laborers and.
6. Leading their agriculture without systematic recruitment of
7. Farmers with systematic employment of one
8. Farms with systematic employment of two or more
There are reasons to think that the per capita income of the family in the
eighth (highest, kulak) group According to the sum of economic characteristics,
the eighth group and almost half of the seventh group belong to the kulaks, and
in the third (capitalist bourgeois) group it was possible to calculate not
completely, but in general this does not significantly change the picture.
The commission of the Council of People's Commissars worked out information on
what part of all taxes each of these eight groups of the population pays and
what part of all income receives.
The comparison gives such a result that in relation to the entire amount of
income received, we pay taxes in practice in the following way:
1) non-agricultural workers and employees pay one-fifth 6 more against their
2) the bourgeoisie pays half as much against their income;
3) the bulk of the economic peasantry (the sixth group, about 66¼ of the entire
population of the country) pays one quarter less against their income;
4) laborers pay half as much against their income;
5) the rest (employing workers in agriculture, handicraftsmen, and the laboring
non-proletarian population of the city) pay approximately in accordance with and
with the total amount of income of these sections of the population.
This refers to the total amount of income and taxes. But the share of each class
in the incomes (generally received in the country) and in the number of people
in the country does not coincide. For example, the third group (the
non-agricultural bourgeoisie) has a share in income four times greater than in
the population. On the contrary, the fifth group (agricultural laborers) has a
share in the income four times less than in the number of inhabitants.
Therefore, in order to compare the hardship and tax for different classes, it is
necessary to establish for each class how much income it has per capita and how
much tax. The Commission of the Council of People's Commissars did this, and for
1925/26 the following result was obtained:
Income per capita. Taxes per capita.
1st group 254 rubles.
36 rub. 96 kop.
On average, for the entire population of the USSR, it turns out per capita 136
rubles. income, and taxes per capita 13 rubles 86 kopecks. Already from this
table it can be seen that, in relation to their income, the poor and middle
peasants of the agricultural population (sixth group) are taxed less than
non-agricultural workers and employees (first group).
The whole picture of the severity of taxation in relation to per capita income
will become even clearer if we show in percentage what part of the per capita
income of each group goes to pay all direct and indirect taxes together (one
percent means one cent from y - for example, one kopeck from each ruble). The
Commission of the Council of People's Commissars, as a conclusion of its work,
gives such a table showing for each group of the population severity of taxation
in 1925/26 as a percentage in relation to per capita income:
Severity taxation. in %
On average, for the entire population of the USSR, this gives 10.2% - In other
words, out of every ruble of income the population spends on all direct and
indirect taxes together - on average, a hryvnia (Ukrainian
$). As a study of the actual distribution of taxes has shown, the
agricultural village is more easily taxed in our country than the
non-agricultural population. This is done for the reason that the village is
more behind in its economic and cultural development than the city. Therefore,
the Soviet government deliberately makes taxes easier for the countryside than
for the city.
Commission of the Council of People's Commissars checked and approved the
distribution, by population classes, of income and taxes for 1924/25. Comparison
with the above and above results for 1925/26 shows that in 1925/26 there was an
unfavorable trend (movement of changes) in two respects. First, in the
distribution of national income. Secondly, in the comparative severity of
taxation for different classes.
The dynamics of the distribution of income is evidenced by the following table
of percentages, given by the Commission of the Council of People's Commissars,
by which the average per capita income in red rubles increased in 1925/26
against 1924/25 for each group separately:
1st group (proletariat) 20.9 %
2nd (handicraftsmen, etc.) 12.6
3rd (bourgeoisie) 34.6
5th (laborers) 20
6th (unemployed peasants) 25.7
7th (peasants with 1 worker) 22.5
8th (peasants with 2 workers or more). 23.0
Thus, the per capita income of the bourgeoisie (the third group) in terms of
percentage increase (and even more so absolutely) significantly outstripped both
the workers and the peasants. This is mainly due, of course, to the so-called
"high conjuncture" of 1925/26 for the accumulation of private capital and the
absence of proper tax regulation of the growth of bourgeois incomes, which
manifested itself in that time in fairly distinct forms. The dynamics of the
percentage of withdrawals by taxes falling per capita from per capita income a
is established, verified, and approved by the Commission of the Council of
People's Commissars in the following form:
in 1924/25 in 1925/26
1st group 10.8 12.2
2nd 9.6 10, 1
3rd 17.1 15.2
5th 3.4 4.5
6th 8.1 7.7
7th 10.9 9.7
8th 12.8 10.2
The burden of taxation increased for the proletariat and laborers (groups one
and five), decreased noticeably for the bourgeoisie and kulaks (groups three and
eight), and changed little for handicraftsmen and other peasants.
Such a negative result of the tax practice of 1925/26 was the result of the
so-called "tax spring" carried out for that year. Although it turned out to be
largely unable to change our correct class practice in tax matters, it
it a certain impetus in an undesirable direction.
Below we show how and why such a result turned out and who should be thanked for
it in the first place. Measures to correct this curvature have already been
taken and are being stepped up.
After the opposition was excluded from participation in the leadership of the
central economic bodies (STO, Narkomfin, Gosplan, Narkomtorg, etc.), the party
began to study more closely the practical line pursued in these bodies and its
real class result.
A number of decisive points revealed that glaring contradiction between
"anti-bourgeois" phrases and between the practical line concessive to private
capital, which was generally characteristic of the opposition"
in "Pravda" for October 1926). This contradiction turned out to be
especially evident in the new practice.
Of course, the main, fundamental lines tax policy were decided by the parties.
Therefore, it is impossible to find perversions of our program and common line
in politics and politics itself. But the practical subtleties of all sorts of
extensive, multi-paragraph tax "regulations", "rules", "decisions" - all this
was already developed and carried out by the apparatuses that were under the
direct leadership of the opposition.
Suffice it to recall that the people's commissar of finance was also among the
most responsible representatives of the opposition; member of the NKF collegium
in charge of budget management; Deputy Chairman of the State Planning Committee
in charge of the economic control plan; Chairman of the Budget and Finance
Section of the State Planning Commission; the people's commissar of trade
coordinating questions of private taxation, and earlier the chairman of the STO,
etc. In a word, all the detailed study and preliminary coordination of detailed
tax bills was carried out by apparatuses headed by the opposition.
It goes without saying that the main directives of the Party have always
remained in force - the capitalist of the list with us has always been taxed on
a larger sum than the worker, and the kulak was taxed on a larger sum than the
poor, etc. But within the framework of these directives, as it turned out,
detailed practical measures were carried out, which in their totality meant a
relative favor for large private capital, which weakened the useful effect of
the adopted political directives.
The passage of these multi-paragraph tax laws through the Council of People's
Commissars and the Central Executive Committee in the Soviet order did not help
the matter enough, because attention was focused there on the main lines, and
not on an infinite number of tax rates in the appendices (constituting, for
example, an entire pamphlet on agricultural tax). And the speed of passing
through the meetings of the CEC and the Council of People's Commissars generally
excluded the possibility of a detailed check of all individual rates, and the
practical trend of these rates, as it later became clear from experience, could
not be assumed without familiarizing themselves with them in detail.
It so happened that the tax practice developed and led by the opposition in a
number of points diverged from the directives of the party in the direction of
favoring private capital. Here, first of all, the responsibility falls on the
respective leaders of the opposition both for these distortions and for the
direction that the bureaucratic apparatus, which was under their closest
leadership and control, was able to pursue in this respect. The Party then had
to, and still has to gradually study and correct these opposition-bureaucratic
perversions. Basically, six of them were found in the tax file.
In the first place, we have a completely definitive line to the effect that
agriculture should be harder for the kulaks than for the middle peasants, and
even easier for the weak. Meanwhile, a special memorandum from the updated
Narkomfin established that in fact the rates were developed in a way that led in
practice to the opposite result. As a result of checking what turned out to be
in fact in 1925/26, - N KF on page 92 of the report on the severity of taxation
submitted to the commission of the Council of People's Commissars, gives a table
showing throughout the RSFSR as a whole the severity of agricultural taxation of
each group of peasants.
The severity of taxation means the percentage of withdrawal of agricultural tax
funds from the income of a peasant farm, and all farms are divided into groups,
depending on the amount of income in rubles per capita for each family member on
average (in order to receive family income, you need this amount multiply by
five). The result of the check turned out to be the following for the RSFSR:
Groups by income per capita. Percent. Seizures
60 rub. up to 80 rubles
80 100 4.9
100 150 4.1
150 200 3.7
Over 200 rubles. 2.8
In other words, the more prosperous the peasant, the easier the tax rates were
calculated for him. While the party issued the directive to press the fist and
relieve the middle peasants, the apparatus, headed and led by the leaders of the
opposition, for which they bear full responsibility, in the development of
rates, pursued a sharply sustained line of relative favor to the more powerful
households (for the poorer and the poorer). group, according to the same report,
the size of the withdrawal in the RSFSR turned out to be up to 10.1% of income,
i.e., three and a half times more difficult than for the most prosperous). In
the 1927 edition of the People's Commissariat of Finance of the USSR
"Agriculture according to the data of the agricultural tax for 1925/26" on page
21 of the introduction (in Comrade Lifshitz's article), a clear illustration is
given of the methods by which such a result could be achieved.
The government gave a directive to reduce the agricultural tax in 1925/26 by 30%
against its total value in 1924/25. The People's Commissariat of Finance carried
out this directive, but distributed the reduction in separate categories in such
a way that the kulaks received a discount more than the middle peasants and the
poor peasants, and for the poor peasants the tax rates were even partially
increased. Thanks to this, in contrast to the entire Soviet tradition, during
the period of practical leadership of the opposition in the tax business, that
unsightly picture was obtained, as evidenced by the above official table.
Comrade Lifshitz gives such a clear example.
For the purpose of imposing agricultural tax, the peasants are divided into nine
groups (the least sowing and little arable - the first, the most arable and the
most sowing - the ninth). Within each group, tax is levied at three rates:
1) for the first half a tithe per eater, 2) for a portion above half a dozen to
one and a half tithes per eater, 3) for a portion above one and a half tithes
per eater. It turns out that when these detailed rates are set for 1925/26 r.
Compared with 1924/25, a combination was made, which can be illustrated by the
following table of totals for the Tula ruble (from p. 21, the introduction of
Comrade Lifshitz is mentioned). The minus indicates here the percentage of the
shutter reduction compared to the previous year, and the plus is the percentage
of the increase:
First Second Third
First (lowest) -40 - 14 + 15
Ninth (highest) - 53 - 35 - 15
It was necessary to use the entire reduction in agricultural tax (about 100
million rubles) to alleviate the situation of the poor and the middle peasants,
in order to enable them to invest as much as 100 million rubles in improving
their economy. For this, the state made such a sacrifice as reducing the
agricultural tax by 100 million ruble, despite the general tension of the state
budget and the insufficiency of ruble to fully satisfy all needs:
The oppositional Nar-Komfin used this to reduce the rates of taxation of the
kulak as much as possible, not only through a general reduction in the
agricultural tax, but even through an incidental partial increase in the tax
rate for the lower group. The theoretical fundamental substantiation of such a
line of "assistance to the development of productive forces" can be found in
general form in Comrade Sokolnikov's well-known speech at the December Party
Congress of 1925. But there is no special application of it to the agricultural
tax and tax practice in general. And what this means in practice - we are
gradually understanding this only as we really study the tax practice that was
inherited from the comrades who led it with distortions and deviations from the
fundamental directives of the party.
It goes without saying that during the implementation of the agricultural tax in
the next 1926/27, these distortions were corrected.
The severity for the poor was lowered, the severity for the upper groups was
increased. The next year, 1927/28, this correction of distortions was further
aggravated by the abolition of the agricultural tax for a significant part of
the weak and the resolution submitted by the Central Committee at the Fifteenth
Party Congress on the introduction of progressive income taxation of the rural
elite. But even the reporting data on the completed collection of the
agricultural tax for 1926/27 clearly testify to the onset of a sharp change in
practice, the return of the renewed financial agencies from oppositional
perversions to Soviet traditions, to actual observance of principled directives.
I will cite as an example (from p. 93 of the memo mentioned) data for three
districts: Valdai district, Starorussky district, Omsk district. These data show
the percentage of agricultural tax withdrawals from the incomes of peasant
families, divided into groups according to profitability per consumer.
Groups 1925/26 1926/27
Plus or, minus.
a) lower group.
4.1 2.4 -40
6) higher 13.5
a) lower group 2.8 2
6) higher 5.6 15
- 16 7
a) lower group 2.1 1.9
b) higher 6.8
14.3 + 110
Comparison of this tablet with the preceding one may serve as an excellent
illustration of the question of the real social meaning of the exclusion of the
opposition from participation in the leadership of the main organs of
Marx taught that the highest
criterion for theory and (the yardstick for its evaluation) is practice.
Lenin added that the
idiot is the one who believes in the word. The practice of agricultural tax,
as well as the subsequent paragraphs of this chapter, can help guide those who
wish to understand the words and deeds of the opposition.
The second essential directive of which we now have to speak, and which has
never been repealed by the Party, is that taxation should be more favorable for
co-operatives than for private enterprises.
Meanwhile, the verification of the "inheritance" showed that, in fact, the
comrades from the Narkomfin were sticking to the line of reducing the burden of
taxation for private traders and increasing the burden of taxation for
co-operatives. This, of course, fully corresponds to the principled line of a
number of prominent leaders of the opposition, who recommended that state
capital be withdrawn from trade and thereby, therefore, replace cooperative
trade with private trade (in the name of investing additional funds at the
present time in the construction of new factories). But this, no doubt, should
come as a surprise to party public opinion, which has a completely different
The report of Comrade Grossman, inspector of the NK RKI of the USSR, agreed with
the NKF (February 1927), compares the change in the severity of the trade tax
(equalization fee with offset of the patent fee) for cooperation and for private
traders in the period of interest to us. The severity of the taxation is
expressed here as a percentage, which is the taxation in relation to the
turnover, respectively, of cooperation and private traders:
Cooperative Private traders
April-September 1924 0.6
October 1925-March 1926 0.8
Thus, the severity of taxation for cooperation increased by 33%, by a third, and
the severity of taxation for private traders, on the contrary, decreased by 8%.
In April-September 1924, private traders were taxed 116% harder than
cooperation, and in October 1925-March 1926 only 50%.
In this way, the poor private owners, whose net savings are already determined
by the People's Commissariat of Trade for 1924/25 at 30% on capital, were given
the opportunity to put into their pockets the additional difference from the
reduction in taxes for them (up to 20 million rubles. ). cooperatives found it
difficult to oust the private owner and reduce the cost of goods. For the
“oppositional” Narkomfin covered the shortfall from reducing the severity of
taxation for the private trader by increasing the severity of taxation for
This is not entirely similar to the financing
by the proletariat of the cooperative system it needs, which Lenin
is more like financing the capitalist economy through cooperation.
In order to correct this distortion, after a proper assessment of the "legacy"
left by the opposition, the Soviet government already in 1926/27 implemented an
increase in the trade tax for the capitalists, in conjunction with a special tax
on commercial excess profits. For 30 provinces, there are already reports from
the NKF on the results of taxing private traders in 1926/27 under the new law on
trade tax (reported by Comrade Frumkin).
It turns out that taxation increased by an average of 46% against the previous
year, but since the turnover of private traders increased by 38 ¾ according to
the same tax data, the actual
severity of their taxation under the new law increased by almost 6 ¾ - If we
take into account the introduction and the increase in the tax on excess
profits, then the above-described reduction in the burden of taxing private
trade by 8% can be considered already eliminated. However, the extent of
capitalist accumulation, which had been clarified in the meantime, and two
additional features of the practice of taxing private traders, make it possible
to raise the question of a further increase. At present, the Council of People's
Commissars of the USSR is already considering a bill submitted by the NKFin to
raise income tax for capitalists.
Firstly, it turns out that in our country large merchants were taxed relatively
lighter than small ones. Secondly, a detailed analysis (analysis and evaluation)
of tax rates, as they were developed at one time by the Narkomfin apparatus,
shows that their nature, as Comrade Grossman puts it in his report, “does not
correspond to the main direction of our policy regarding private capital to
transfer it from trade to industry" (p. 10 of the mentioned report).
In most branches of commerce, the rates of taxation of capitalists are equal to
those of state and cooperative trade. in almost all branches of private industry
they are, on the contrary, higher than in state and cooperative industry.
This creates easier conditions for private capital to compete in trade than in
industry. It is, as it were, deliberately diverted from the organization of the
production of new useful objects to the organization of speculation with already
In my book "Private
Capital" (1927) it
was shown that for
tax reasons it is more advantageous for the capitalists (where technology
permits) to organize a
"domestic system" of capitalist exploitation instead of directly
opening workshops and factories.
The question of changing taxation towards less stringent conditions for private
industry (except for harmful industries) than for private trade is currently on
the agenda, and this
perversion of tax practice will also be eliminated.
As for the taxation of large merchants easier than small ones, here we have a
semblance of the same reverse progress that we saw above for the agricultural
tax in the RSFSR in 1925/26 of the USSR People's Commissariat of Trade in Table
No. 13 of its report of December 1926 (see also the publication of the People's
Commissariat of Trade "Private trade in the USSR", M., 1927) provides relevant
detailed information on the taxation of private trade for 1925.
Private trade for the purposes of taxation is divided into five categories (the
lowest, peddlers - the first; the highest, the largest - the fifth). For cities,
the People's Commissariat of Trade developed and provided information, starting
with the second category (the second - kiosks, the third - ordinary retail
shops, etc.). All figures in Table No. 13 show the percentage of taxes in
relation to the sales turnover of trade enterprises of each category. Here,
first of all, data on what percentage is the patent fee:
The picture is perfectly clear. The larger the private trader, the larger the
amount the private trader trades for, the smaller the share of the turnover in
the form of a patent fee was taken from him by Narkomfin at the rates developed
under the opposition.
I have already pointed out - and I emphasize again - that it is absolutely
impossible to hide behind the formal approval by the authorities of the
corresponding "regulations", "instructions", etc., of tax regulations. The Party
and the Soviet government never gave directives to big merchants more easily
than small ones, on the contrary.
When the relevant laws were submitted for approval to the relevant authorities,
with tables of different rates, etc., it could not occur to anyone that if all
these rates were suspected and deciphered, then there would be more relief for
the kulak compared to the middle peasant, and for the big a merchant is
relatively lighter taxation compared to a simple kiosk or street peddler from
the unemployed. In the text itself, nothing of the kind was hinted at, and
nowhere in his numerous reports did Comrade Sokolnikov warn that in practice
such a picture would turn out: This applies not only to the patent fee, but also
to the totality of all taxes. The People's Commissariat of Trade in the
indicated table No. 13 also gives a certificate on what percentage of the sales
turnover for private trade in cities was the total of all taxes (including
income, trade, stamp, etc., including all local):
Sometimes empty talk is circulated to the effect that rent payments have been
placed and that similar tax-like collections are allegedly particularly capable
of hurting precisely the big capitalists. Therefore, the People's Commissariat
of Trade provides information on the amount of taxes for city merchants,
together with rental and other "tax-like" payments. Result:
2nd category. 7.81
The result is exactly the same for private trade in the countryside. For the
village, the People's Commissariat of Trade gives (in the same table No. 13)
data on all five categories. I will give only a general result, including all
taxes (patent, equalization, income, stamp, etc.), all fees, rent and other
1st category. 10.81
Consequently, a large merchant, in relation to the amount of his sales, is
taxed in the countryside (including rent, etc.) three times as lightly as a
street peddler. We have almost the same difference in the city between a large
merchant and a kiosk. Meanwhile, the net accumulation of the big man (the
capitalist) is large, while the street and kiosk stores have almost none or none
at all. It may occur to anyone that, since the wholesaler and are placed in the
fifth (highest) category, they should be taxed lighter, otherwise they will
shift the increase to retailers.
But why, then, should a larger retailer of the third category be taxed lighter
than a smaller retailer of the second category, and even more so of the first?
There is no rational basis for this. ?,. one simply has to establish a
distortion of tax practice in the direction of directing the main pressure not
on the capitalist (as it should be according to the directives of the Party and
the Soviet government), but in the direction of the private owner of the
non-exploiting type, petty and small. This was especially pronounced in the
field of so-called "tax-like" payments (rent for premises, utility services).
If, according to the given data on the taxation of private trade in cities, we
take as 100¾ the relative value of payments for merchants of the second category
(kiosks), then for much larger merchants of the fourth and fifth category we
Taxes Rent Etc.
2nd category. 100 100
Extreme unevenness, irregularity, and even reverse progressiveness took place,
especially in the payment of rent, utilities, etc. Therefore, at the present
time, when we have sorted out the "opposition legacy", the question of revising
all these "tax-like"
payments (like rent and utilities) has already been raised and
predetermined, firstly, downward for merchants of the first and second
categories (for peddlers and stalls) and for handicraftsmen without hired
workers, and secondly, in the direction of bringing them into line with the
principles of taxation (which means an
increase for large ones compared to small ones).
perversion of the party line by tax practice in the same year of the
leadership of the oppositionists in the financial apparatus consists in a
peculiar, quite definite shift in the tax burden within the non-agricultural
population. We have seen above what happened during this period with the
agricultural tax, and how the party later had to correct the distortions
committed in this respect. We also saw the manifestation of certain
corresponding tendencies in the taxation of private trade.
Now the People's Commissariat of Finance of the USSR (the same report) has
developed data on changes in taxation under the same tax in 1925/26 of various
parts of the non-agricultural population compared with the previous 1924/25 (p.
44-45 of the report). As is well known, no
income tax is levied on peasants; agricultural tax is taken from them. We
take the percentage of income tax withdrawal from the income of each group of
the population, established by the NCF for 1924/25, as 100. And then, using the
same NCF plate, we look at how many percent it increased (plus) or decreased
(minus) in 1925-26 against the previous year. The result is like this:
1. Workers +28
2. Employees +45
3. Personal trades (labor) +1
4. Homeowner (small ones) +9
5. Merchants and Entrepreneurs:
a) small -6
b) medium. -2.5
c) large -3.8
6. Pensioners, fellows, etc. no change.
This table explains quite well why a new income tax law was issued for 1926/27.
For the latest creativity of the apparatus headed by the opposition, which
existed in 1925/26, meant, as we see, a noticeable increase in the burden of
taxing the income tax on workers and employees, a certain increase in the burden
for small-scale private economy (labor trades) and along with this downgrading
for all merchants and capitalists (including industrial ones). Party and Soviet
directives in this manner to calculate and set tax rates were put on the head.
They had to be put on their feet. To this end, in the new income tax adopted
“after the opposition” (entered into force on October 1, 1926), workers and
employees who receive up to 100 rubles a month (previously only up to 75 rubles)
are exempted from income tax , and increased
income tax rates for capitalists.
Of course, as has already been mentioned in relation to the entire taxation as a
whole, even in 1925/26, in spite of all these distortions, the capitalists were
more heavily taxed in our country than the workers.
A different setting would immediately catch the eye in the text of any law, and
no one would tolerate it or miss it. But the tendency to correct and opposing
amendments in practice, through the corresponding "development" of detailed
rates, is shown and confirmed by a number of facts cited in full. And, of
course, it gave in practice its harmful results, which are characterized quite
higher according to official data.
It was only after the oppositionists
were removed from the leadership of the tax business that the inheritance
became sufficiently clear, and a review and correction
of the observed perversions began, which continues to this day.
The fact that all these distorted ideas are directed in the same direction
cannot but be characteristic of the practice of those figures who, like Comrade
Kamenev (then chairman of the STO), Comrade Sokolnikov ( the then Narkomfin),
Comrade Smila (then the actual head of the State Planning Commission, first
deputy chairman of the ailing), led the development and implementation of all
this practice by the appropriate apparatuses, and now they are not averse to
declaring themselves especially left and almost former eternal left.
The sixth point in this practice, to which special attention will have to be
paid, is the almost complete lack of development of measures for taxing private
credit capital. We have seen above its dimensions and significance for bourgeois
accumulation. Public opinion quite rightly recognizes the monetary and credit
operations of the capitalists as the most profitable branch of their activity.
And it is they who actually remain with us almost completely without taxation,
while capitalist and labor private industry and trade are taxed. The main
difficulty here is the absence of such sharply conspicuous external prospects as
exist to some extent in trade and partly in industry.
But this difficulty is not insurmountable. Two-thirds of private credit capital
is invested in capitalist medium and large-scale industry and trade. The number
of all such enterprises is not immensely large, only about 180 thousand, and
their business books (which they are obliged and should be obliged to keep) are
controlled by financial inspectors. The data of these books and the balance
sheets drawn from them contain, as we saw from the NCF questionnaire,
information about very large amounts of private credit capital, about hundreds
of millions. It is possible to establish, for example, the taxation by a certain
percentage of all credit turnover of a given commercial or industrial enterprise
(with the adoption of measures to attribute this taxation due to a corresponding
decrease in interest on these credit transactions, etc.). It is possible to
point out some other clues for solving the same problem - this is not the place
to enter into technique. But the task itself must be set in practice and
honestly, and in contrast to the almost complete tax laissez-faire on the
capitalist monetary and credit market that has hitherto existed.
In connection with the question of the taxation of private capital, two more
circumstances must be noted. In the first place, about a year and a half ago,
the calculations of some workers of that time about an unheard-of enormous
taxation of private capital were circulated among us. It turned out that not
only could there not be any significant accumulation, but in general one was
left wondering how these sufferers still exist. It turned out that taxes and
tax-like payments should absorb 70 and 80 and even 91% of all their income from
private entrepreneurs (minus the costs of the operations themselves, but without
taxes). It remained a mystery to fools why these selfless people are still
engaged in trade, if it is unlikely that even the standard of living of a
low-skilled worker can be provided for the rest of the family.
The tendentiousness and agitational striving of these calculations were clear
even then. Their task was to give the impression of such an allegedly existing,
extreme over taxation of private capital in order to pave the way for that
policy of more favoring it, which was simultaneously pursued by the same
apparatus through the development and implementation of various complex, long,
and confused tables of rates and salaries, which were attached to the relevant
decrees, and rules.
Let us not forget that all these calculations were made, printed, and advertised
at the very time, about which now both the Narkomtor and the State Planning
Committee, etc., on the basis of all the surveys carried out and the materials
collected, established that one net savings from private traders then amounted
to at least 30¾ entry to capital. Now the secret of these statistical tricks is
completely revealed, "The chest just opened." It turns out that tendentious
speakers in favor of a private channel - some probably consciously, and some,
one must think, out of ignorance or lack of a sense of responsibility for their
speeches - used this technique. Everyone knows that if a trader pays rent for a
commercial premises, then he includes it in the price of those goods that he
sells in these premises.
The same applies to the payment of trade tax, etc. So, the statistical
conjurers made the assumption - modestly not emphasized by them in their
speeches - that the merchant does not include in the price of the goods sold
either the rent for the premises, or the trade tax, etc. The good-natured
merchant in the USSR, in contrast to merchants all over the world, allegedly did
not pass on to consumers the full costs that are necessary for the sale of
goods. The good-natured merchant in the USSR, in contrast to merchants all over
the world, allegedly did not pass on to consumers the full costs that are
necessary for the sale of goods. Such an assumption was especially inappropriate
and impossible during the years of the commodity famine experienced by the
country at that time, when not the merchant was chasing the consumer, but the
consumer was chasing the merchant.
Now the commission of the Council of People's Commissars of the USSR has
developed data on the actual taxation of private capital, taking into account
the transferable and non-transferable part of taxes. Non-transferable include
income tax, apartment tax, that part of excise taxes, trade tax, etc., which
falls on the part of the country's production consumed by this bourgeoisie,
etc. And immediately all the legends about how the poor capitalists pay almost
91% of their income with us (and we must rush to their aid?) It turned out that
it was impossible to raise the taxation of private commercial and industrial
activity above 17, 2 ¼ for 1924/25, and above 15.2% for 1925/26. If for the
bourgeoisie even the entire expenditure on housing is counted (assuming that a
tax element is included in the rent for them), the percentage of tax deductions
from their income in 1925/26 will still increase only to 17.7%.
If the pictures sometimes painted to us about the complete unbearability of
taxes for the capitalists were correct, these same capitalists would have closed
their wholesale enterprises long ago. But, as we have seen, taxes were really
heavy not for them, but for the very small ones - peddlers, small retailers,
etc., for whom the severity of taxation is three times greater than its severity
for the largest merchants (see above). This small business did sometimes go
bankrupt (especially handicraftsmen, etc.), while the large ones only
transferred their funds from the trade in manufactory to the purchase of
The second circumstance is the assertions that were often circulated that made
the growth of the high cost dependent on taxation and private trade.
In fact, taxes in our country generally constitute such a modest part of the
price of commodities that it completely sinks into the general cloak of private
merchants, which they do for other purposes (for the sake of profit, etc.). We
have seen that in 1925/26 taxes on private turnover were relatively even
reduced. Capes of private merchants, on the contrary, increased. In "Economic
Life" dated April 16, 1927, a prominent worker of the NKF P. Kutler made a
comparison of taxes on private turnover, the amount of this turnover and the
amount of retail capes of private traders on wholesale prices in Moscow for two
years (half-years from October 1924 to September 1926).
At the same time, all taxes, both irreplaceable and transferable (without any
deduction of the transferable part), are fully taken into account here. The
result is like this:
The ratio of taxes
Retail cape and wholesale prices.
to the amount of turnover of
October 1924-March 1925 8.9%
April 1926-September 1926 6.0%
This table clearly shows that the nodding at the Soviet authorities regarding
the high cost of goods from a private trader has no basis. For two years, the
severity of taxes for private turnover has decreased, and the private trader,
using his position in the market, even increased his capes. The reduction in the
severity of taxes did not result in a reduction in the price of goods, because
the private trader not only put the difference in his pocket, but also increased
Reducing the price, as experience has shown, can be achieved without reducing
taxes on the private owner by increasing Soviet intervention in the organization
of the market, by increasing the share of goods sold by the Soviet way. The
experience of 1926/27 fully confirms this.
In 1926/27 taxes on private turnover were increased. But at the same time, a
serious campaign was launched to lower prices. And we see that from January 1 to
June 1, 1927, for the first time in a long time, prices also dropped somewhat in
private trade. True, not particularly significant, and, moreover, almost only in
trade in industrial products, but it was still a success in comparison with the
previous long-term growth of all final private indices. Thus, the absence of a
causal relationship between our level of taxes and the current high cost in the
private market has been proven twice in recent years - both directly and in
reverse. Of course, it does not follow from this that it is worth increasing
taxes, as everything is cheaper.
But it follows from this that it is not taxes that are playing a decisive role
in our country at the present time in directing the movement of high prices on
the private market, and therefore all the nods to the tax measures of the Soviet
government, as the primary cause of the high prices among private traders, have
no basis. grounds, contradict
the facts and are the conduct of an alien ideology or "capitulation" to it.
Translation from Russia Svitlana M and MLDG