Central Planning in Czechoslovakia: Organization for Growth in a Mature Economy

By Jan M. Michal | Go to book overview

Chapter 8
STATE BUDGET AND INVESTMENTS

1. State Budget

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

____________________
1
Referring to the federal budget.
2
Personal taxes collected in 1958 were as follows (from SRRC, 1959, Table 21.6), in million Kčs: wage tax, 9,340; agricultural tax (paid by individual farmers), 131; tax on incomes from literary and artistic activities, 15; tax on other personal incomes, 176; tax on entrepreneurship (paid in addition to "tax on other incomes" by all nonagricultural self-employed workers), 43; "house tax" on private house ownership, 405.

-165-

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Central Planning in Czechoslovakia: Organization for Growth in a Mature Economy
Table of contents

Table of contents

  • Title Page iii
  • Acknowledgments v
  • Contents vii
  • List of Tables ix
  • Abbreviations and Symbols xiii
  • Introduction 1
  • Chapter 1 Population and Manpower 6
  • Chapter 2 Industry 26
  • Chapter 3 Construction 58
  • Chapter 4 Agriculture 64
  • Chapter 5 Transportation 91
  • Chapter 6 External Trade 96
  • Chapter 7 Money and Prices 139
  • Chapter 8 State Budget and Investments 165
  • Chapter 9 Income of the Population and Standard of Living 188
  • Chapter 10 National Income, Gross Product, and Expenditure Aggregates 211
  • Conclusion 238
  • Appendix Results of the 1959 Plan; Plan for 1960 and Targets for 1965 Under the Third Five-Year Plan 245
  • Summary 253
  • Bibliography of Works Cited 265
  • Subject Index 269
  • Name Index 274
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