On budget cost reduction in alternative models of a market economy

It is proposed to reduce spending on defense, arms production and the entire complex related to these industries more thoroughly in the very near future. Administrative measures to reduce centralized production investments should be supported by economic measures: to make these budget allocations paid (at a preferential rate) and refundable. Then budget revenues, in addition to tax and other revenues, will acquire a new channel — the return of budget allocations previously allocated for production purposes. Further steps should also be taken to decentralize expenditures not only for production, but also for some social purposes, shifting the burden from the state budget to enterprises and organizations to a greater extent. Of course, government subsidies on all lines should be reduced and a program designed to minimize them for several years should be developed.

A fundamentally different approach to allocating budget funds for solving a particular target task can play an important role. Instead of the full amount of funds, for example, it is advisable to allocate only a part for the construction of an infrastructure facility, and interested enterprises and organizations will invest both their own and borrowed funds. Thus, with a relatively small amount of budget expenditures, it is possible to maintain a serious impact on the direction of investment and structural policy.

In order to maintain budget revenues at a sufficient level and avoid budget deficits, it is necessary, in addition to direct income taxes and income taxes, to develop a system of indirect taxes. It is necessary to transform the existing system of turnover tax into a value-added tax, which is taken into account in the price of goods, as is customary in other countries. This, of course, does not cancel out the increased excise tax on certain products (wine and vodka products, tobacco, luxury goods, cars, etc.).

Although the tax system adopted by the Supreme Soviet of the USSR represents a definite step forward, it can only be considered as a system of transition to the market and does not fully meet the needs and realities of a developed market economy.

Tax rates for well-functioning enterprises are prohibitive and discourage entrepreneurship. On the other hand, the linear nature of the tax encourages inflationary price gouging until the marginal profitability level is reached, which is dangerous in conditions of underdeveloped competition and global market pressure. With future changes to the tax system, we must try to avoid the so-called double taxation. It is also important to have tax benefits when channeling profits to the development of science and technology.

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