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Originally posted by ziggystrange
I don't know how they handle things in places where there is "some" sort of capitalism, but in the USSR prior to the fall of the Soviet Union the State owned everything so they collected no taxes. Communism usually means no taxes, however some would say it's academic since there is nothing to tax. What you have is given to you by the State so they get their "profits" up front and you get a share of what is left I suppose.
In addition to fixed capital, each enterprise is allocated a minimum of working capital from the state through the Central Bank and is required to meet various operating expenses with the proceeds from sales of its output. Up to 50% of the "profit" is taxed, the remaining half being kept by the enterprise for purchase of equipment, introduction of new technology, welfare benefits, and bonuses. As such, the system provides some built-in incentives and some degree of micro-level autonomy, unlike the budget allocation system, under which any surplus is turned over to the government in its entirety.