STATE BUDGET AND INVESTMENTS
The purpose of this section is not to discuss public finance in a centrally planned economy but to give basic information which may be necessary in order to elucidate the preceding chapter on prices, to understand the meaning of Czechoslovak statistics on investments in the next section of this chapter, and to discuss some of the problems that will emerge in connection with the attempt to estimate Czechoslovak national income and gross national product in Chapter 10.
As is to be expected, the proportion of gross national product going through the state budget is much larger in Czechoslovakia than in the market economies. State receipts and state expenditures reach a level equal to almost two-thirds of gross national product (provided the estimate of the latter, in Chapter 10, is not too far from reality). In West Germany and in the United States1 less than one-fifth, and in the United Kingdom less than one-fourth, of the gross national product has been reallocated through the state budget in recent years.
Yet the really important difference lies in the different economic function of the state budget in Czechoslovakia rather than in its scope. In market economies state budgets serve, from the economic point of view, as important tools to redistribute income. This is not so in Czechoslovakia. Tables 8.1 and 8.2 show the Czechoslovak budget in recent years by main categories of receipts and expenditures. Direct taxation comes under the official heading of "receipts from the population." This amounts to only 11-12 per cent of the budgetary state revenue. The main component of the "receipts from the population" is the "wage tax," which, in 1958, provided 92 per cent of actually collected personal taxes.2 The rates of the wage tax, and of some other personal taxes, are much less progressive than____________________