HIGH TAX, RED TAPE HINDER SOVIET'S SMALL BUSINESSES
MOSCOW — Embattled leaders of new Soviet private businesses are protesting that they are being strangled by oppressive taxes and bureaucrats who portray them as greedy swindlers. Officers of the new Alliance of United Cooperatives told a news conference Wednesday they were alarmed by signs of swelling anti-cooperative sentiment from the populace, the state-run media, and even Soviet leader Mikhail Gorbachev.
On July 1, some localities in the Ukraine and Byelorussia began taxing revenues rather than profits at rates as high as 50 percent, said Vladimir Tikhonov, president of the alliance.
The small businesses, which usually share their profits among several owners, are virtually the only visible success in the economic reform. More than 100,000 have sprung up in just 2 years, and they have created 2 million jobs in an otherwise stagnant Soviet economy.
Although Gorbachev praised the co-ops Jan. 1, he gave them only lukewarm support Tuesday in a meeting with Leningrad residents. In response to their complaints that cooperatives charge exorbitant prices for poor-quality goods, he said local authorities can regulate their activity.