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By Adam Zwass

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But the state, not the individual enterprise or its association, controls the remainder of the profits. Of the total profits of Soviet industry in 1973, 41 percent was placed at the disposal of enterprises (in 1965, only 29 percent); of this, 16 percent went for the formation of premium reserve funds, 12 percent for investment purposes, and 13 percent for other business affairs. The remaining 59 percent was paid to the state budget (71 percent in 1965), 20 percent as assets tax and 32 percent as residual profits 46 that, because of distribution regulations, could neither be left to the enterprise nor paid into the state budget in another form.

The consumer goods industry, however, is still the principal payer of turnover tax. Other enterprises pay a turnover tax only if they also produce consumer goods in addition to means of production. The situation is similar in the other Eastern European countries. 2 percent in the building materials industry. 26 In the initial phase, industrial prices still had no adequate economic basis as commodity prices. Many extra-economic considerations were attached to them; they were seen as an instrument to redistribute the incomes of enterprises and were shaped on the basis of costs, although by no means all components were taken into account.

Incomes from Enterprises Just as in competitive market economies based on private property, unpaid labor 13 in the actual production process is the source of surplus value. The only difference is that in the planned economies the state, as the collective owner of the means of production, has the ultimate say in determining how surplus value is to be obtained, in what form it should appear, and how it is to be used. Hence, an enterprise and its income play different roles in this respect than in a market economy.

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