ABSTRACT
This chapter looks at expenditures, revenues, and transfer payments from Moscow to assess the evolution of "fiscal federalism" and the rise of the republics in the Soviet system. Soviet fiscal federalism has gone through several stages, with an emphasis on increased central control during the First Five-Year Plan, the war, and during the last years of Stalin's rule. At the end of the First FYP, republic and local governments retained a major role only in health care, primary and secondary education, welfare, housing, and municipal services. Republic leaders had major responsibility only for health, education, welfare, housing, and municipal services. The pension system was revamped in 1956 and education was reorganized in 1958, with both measures pumping up regional expenditures. Agricultural investment climbed, and the increasing emphasis on consumer policies pushed republic expenditures even higher. The literature on taxation was filled with references to tax policies as weapons in the struggle against the bourgeois class.
