Finances under Socialism, the system of economic relations expressing the planned formation and use of finances for expanded socialist reproduction and the satisfaction of other social requirements. 140 Finances in socialist society entail the use of money and commodity-money relations in the process of formation, distribution and redistribution of the aggregate social product and national income, as well as the exercise of financial control over the economic and financial plans of various enterprises (see Monetary Control) and the observance of policy of economies. Finances help balance the principal elements of the national economic plan by achieving conformity between the material and financial resources. As far as their material content is concerned, finances are the aggregate of the centralised (state) sums of money concentrated directly in the hands of the state, and the funds entrusted to certain cost-accounting enterprises and organisations. State finances are directly connected with the economic activity of the socialist state in organising social production, directing the economy and culture, raising the people’s living standards, organising control over the measure of labour and that of consumption, strengthening the country’s defence capability, and developing cooperation and mutual assistance among the socialist countries. In the Soviet Union, the following belong to state finances: the state budget of the USSR, state social security and social maintenance, and state personal and property insurance. The finances of socialist enterprises go into the formation and circulation of their monetary means, the formation and use of monetary accumulation and other economic incomes. The financial activity of enterprises encompasses monetary relations which evolve in the process of reproduction between the enterprises and the working people, between the state and the enterprises, and between the enterprises themselves. There are the finances of the state enterprises and the collective farms and cooperative organisations. The finances of the state enterprises occupy the leading place. State enterprises play a decisive role in creating monetary accumulation in the country and in forming the national fund of monetary means. The most important principles of organising the finances of socialist enterprises and economic branches are: democratic centralism, planning, links with the cost-accounting activity of enterprises, stimulating high indices of production and making it more effective, differentiating fixed and circulation assets and sources of their financing, and forming financial reserves. The main financial forms of the distribution and redistribution of the national income are the turnover tax, profit (see Profit of Socialist Enterprises), allocations for social insurance, the financing of capital investments and circulating assets, and the creation of the social consumption funds, insurance, reserve and other funds. Tax methods of redistributing the national income in the interest of building socialism were widely used in the period of transition from capitalism to socialism. With the construction of socialist society, taxation (see Taxes’) has lost its class significance, and the perspective is that accumulations of socialist enterprises will be the only source of profit. Profit and circulation tax provide the lion’s share of state financial resources in the USSR. The planned use of financial resources makes it possible to fund the implemention of important tasks of building communism like the heightened development of progressive industries which determine scientific and technical progress; the rapid development of the productive forces in agriculture, which promotes the gradual elimination of the essential distinctions between town and country, and steadily raising the living standards of all members of developed socialist society.