Sweeping reform of the justice system will break the "hopeless cycle" of short prison sentences, according to Justice Secretary Kenny MacAskill.
Launching the Criminal Justice and Licensing Bill, he said it would also target those who direct organised crime with sentences of up to 14 years.
Other measures include closing the loophole that allows spouses to avoid giving evidence against their partner.
The age of criminal responsibility will also be raised from eight to 12.
Mr MacAskill said the bill would strengthen the hand of the police and courts in tackling drug crime, money laundering, human trafficking and predatory sex offenders.
"At the same time, we must act to turn around the unacceptably high reoffending rates that have persisted for too long," he said.
Mr MacAskill rejected opposition claims that a new presumption against jail terms of six months or less, in favour of community sentences, was a "soft touch" approach.
He said: "This bill can help us to break the hopeless and perpetual cycle of short prison spells which lead to a loss of employment, housing and family ties and a greater likelihood of reoffending on release.
"Three-quarters of those given a prison sentence of six months or less reoffend within two years while almost three-in-five sentenced to community service instead have a clean record over the same period."
New Community Payback Orders will require offenders to repay the community for the damage they have done.
Other provisions of the legislation are:
Mr MacAskill added: "There can be no hiding place for those who peddle drugs and despair on our streets and no compromise in curbing the activities of predatory adults whose behaviour poses a risk to our children and others."
The bill was welcomed by Victim Support Scotland which said short prison sentences had failed to address re-offending.
Chief executive David McKenna said: "It is right that we seek other measures which address criminality and re-offending.
"The answer may well lie in tougher community sentencing, where the victims of crime can see that those who offend are genuinely paying back the victims and the community in which the offence occurred."
Labour, however, criticised the new sentencing provisions as a "criminals' charter" that would undermine confidence in the justice system.
Labour justice spokesman Richard Baker said: "Communities expect those who break the law to be punished properly and this soft-touch approach will do nothing to deter lawbreakers.
"As a package, these plans are unsupportable and look unlikely to receive the necessary parliamentary backing."
The Scottish Conservatives said they supported parts of the bill, but also raised concerns at the sentencing changes.
Justice spokesman Bill Aitken said: "To actively move away from considering prison as a valid option for offenders is utterly unacceptable.
"The SNP fails to understand that public fury is not so much directed at the length of sentences handed down but the length of time actually served."
Robert Brown, for the Scottish Liberal Democrats, said: "Community sentences must be speedy, effective and efficient.
"My concern is that the SNP have not begun to spell out how they will make these reforms work in practice. It is absolutely vital that they do so."