Having ousted the tsar and formed a government, the communist government faced many problems: a growing army, demanding food, job losses, and imminent hunger. In order to gain a foothold in their positions and prevent economic chaos, as well as public indignation, the authorities decide on reforms that should strengthen their policies.
Food surplus or tax deductible?
This was a question that was discussed by the party leadership in the early 1920s. Having embarked on the industrialization and electrification of Russia, Lenin was not ready to abandon such a tempting plan. But the more efforts were devoted to the construction of industry, the less people were engaged in agriculture.
The growing army demanded bread, which prompted the new government to carry out a series of transformations that were supposed to provide the required rate of grain. For example, the introduction of food surplus - forced harvesting from peasants. However, the fact that most of the fields used earlier was abandoned was not taken into account, and more often peasants simply did not have enough seeds for sowing.
Strict standards were set for the delivery of products at a price convenient for the state, which led to a food dictatorship and the impoverishment of farmers. The so-called bread monopoly forced to hand over the entire crop to the bins of the motherland, leaving a small amount required for the survival of the farms.
If initially the surplus-appraisal system “sucked out” all the grain stocks, then by the end of 1920 the norms of change appeared on other products (meat, potatoes, etc.). The discontent caused by such a cruel consumer attitude could soon result in peasant armed uprisings.
At the Tenth Party Congress, it was decided to soften measures and introduce new, loyal methods that contribute to the revival of agriculture. A tax was introduced and several other related measures. They reduced the burden on agriculture and strengthened the country's economic market.
Wording
The meaning of the word “food tax” becomes clear if we take into account that it comes from two words - “food” and “tax”. Thus, this reduction explains the meaning of the term, that is, we are talking about the in-kind tax levied by peasants in the USSR until 1923.
Soft technique
What does the food tax mean for the population? The norms that the peasants had to give to the treasury had clear boundaries, since the number of eaters, sown land, and also livestock was taken into account. It can be noted that the introduction of the tax in kind had its results.
In the first year, the established norms were collected in the amount of two hundred forty million poods of grain, which was much less than with the surplus appraisal, but not critical for the country's economy. The exception was the kulaks, having more prosperous farmsteads. For them the tax was higher than for other peasants.
Value added tax
With the entry into force of the new decree, the Russian economy began to gradually come out of the crisis. Market relations began to revive. The surplus products that remained after mandatory payments, the population could sell, and not exchange, as it was before.
This turn of events gave impetus to the implementation of monetary reform and the emergence of a stable currency. And the lifting of the moratorium on the work of small private enterprises has returned to many the opportunity to continue to conduct their business.
By allowing domestic trade, as well as by de-nationalizing certain sectors of industry, Lenin stabilized the economy at his own expense, without resorting to forced methods.
Thus, it can be noted that the tax in kind is not just a fixed tax, but a well-thought-out plan for a new economic policy. Promoting the formation of the domestic market of the country, the authorities contributed to the creation of a turnover between producer and consumer, thereby increasing the turnover of large enterprises.
People who had not previously been engaged in labor were forced to serve forced labor. Also appeared organizations involved in the employment of the population.
Despite the efforts made, the new economic policy did not manage to completely correct the state economy. Thanks to the food tax, the agricultural sector has gained importance. People in a hurry to a bright communist future demanded vigorous action, the result of which would be quick visible results.
In view of the current situation, in May 1921, Lenin declared that the tax on taxes was a rather acceptable policy for a state that was keeping up with the times. Prior to this, jumps in prices for manufactured goods and a decrease in the cost of natural production forced the residents of the country to complain. But the introduction of fixed norms for the delivery of agricultural products calmed the population.
Thanks to such changes, the country's economy began to recover. And they gave an impetus to this tax and the development of the industrial sector.