E. Preobraschenski


Taxation Problems in Russia

(23 October 1921)

From International Press Correspondence, Vol. I No. 3, 25 October 1921, p. 23.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2018). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

The introduction of a new railway tariff has caused a considerable amount of dissatisfaction in the working-class. At present this dissatisfaction has to some extent subsided but labour’s attitude toward this measure is still a hostile one, which clearly demonstrates how little our taxation policy is understood by the proletariat. The introduction of the tax on industry met with no such opposition. However, the fact that it is obtaining no energetic support from and is scarcely understood by the working-class again shows how little the proletariat as a class comprehends its advantages.

Two objections are raised against the new industry tax. Firstly, its defective wording and an entire series of mistakes in its application are pointed out; errors that had to be rectified after it had been in force for some time, for example, the numerous changes in the railway fares. These objections are justified and we must draw the following conclusions therefrom: every decree on the introduction of new taxes must be carefully considered beforehand. It would be even better if all such proposals should first be published and discussed for a time before they become laws.

The other objectors maintain that the introduction of taxation has few or no advantages. The taxes are shifted upon the wages of the workers and employees, since the merchants exploit the working-class by a corresponding rise in the price of necessities, so that the State is compelled to replace what the working-class loses out of its own pocket. In the last analysis the transportation charges are paid, not by the retailer who has paid for the transport of his potatoes according to the new rates and immediately raises the retail price of potatoes, but by the workers who buy the potatoes at the higher price. The Stale is forced to equalize this depreciation of the actual wage by an increase in wages and the result is that what is gained in one department (Railway revenue) is lost in the other (the Factory Administration, which pays out wages and salaries).

Those raising these objections have either reasoned falsely or else are simply stupid. For in reality taking for granted that in Moscow the monthly revenue from the increase in fares, the industrial and other taxes are 30 milliard roubels, that the merchants, artisans and others shift the taxes on the consumers by increasing prices who, then, are these consumers? On the one hand workers and clerical employees, on the other hand, however, the artisans, peasants, dealers and speculators, the remains of the bourgeoisie, in short, the petty-bourgeois elements. Assuming that half the taxes will be shifted to the shoulders of the working-class and the other half upon the non-proletarians, what is the result? The half, i.e. 15 milliards, that fall on the shoulders of the working-class must be replaced by the Soviet government; the other half, however, represents the net revenue of the government. The Soviet government is not in the least concerned as to how the bourgeois elements shift this burden from one group to the other. Its task is only the following: approximately ascertaining in what degree the taxes burden the workers and clerical employees and raising their wages to correspond. When we consider that the workers are a minority of the consumers in the entire population, we find that the net revenue greatly exceeds the sum that the State has to repay to the working-class.

The work of the Soviet government in the near future will consist of a further systematic increase in taxation especially upon luxuries an retail enterprises (delicatessens in the Tverskaia) that cater exclusively to the needs of the bourgeoisie. The working-class, whose indignation is aroused at the sight of all these cafés, florists and confectioners, as well as by the enormous profits of the traders and speculators, must support the government’s taxation policy with all the means in its power. For if we permitted unrestricted trade – and no one even thinks of abolishing it – we still are able to keep the profits of the traders and speculators in the entire country down to a minimum. This power is exercised in an unfeeling taxation of all non-State enterprises and in the privileges extended to the working part of the population. The working-class can but greet each new tax. It must see to it that the government replaces the losses that arise from the resulting increase of prices. In its turn, the Soviet government considers this compensation as its primary duty.

In no way do we overestimate the role of these taxes in our budget, but anyone who will lake the trouble to make the necessary calculations will come to the conclusion that, in the coming year, we will be able to cover 10% of the revenue that we are at present deriving from the issue of paper money. That means that, in our attempt to establish a firm foreign exchange, we will be able by means of taxation, either to reduce the emission of notes by 10% or increase our expenditures for production by the same amount.

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Last updated on 4 December 2018