III. Language

Exercise 1. Find in the text and put down English equivalents to the following word combinations:

Накладати фінансове стягнення; витрачання стягнених податків; юридична чи фізична особа,що не сплачує податки; ефективна податкова система; платник податків; розподіл податків; дохід; витрати; платити податки; з найменшими можливими витратами; принцип платоспроможності; отримувати пільги від уряду; пільговий принцип оподаткування.

Exercise 2. Fill the blanks with the suitable words:

1. … is to impose a financial charge upon a taxpayer (an individual or legal entity) by a state.

(to pay taxes, to tax, to distribute taxes)

2. The government… of taxes raised is often highly debated in politics and economics

( collection, expenditure, administration)

3. A proportional tax is one that imposes the same percentage rate of taxation on everyone, no matter what their…

(activity, income; sources of funds)

4. People should pay taxes in proportion to the amount of … they receive.

(credits, services or benefits; income)

5. Tax laws should be written so that both the taxpayer and … can understand them

(tax assessor, tax-collector, government)

Exercise 3. Make up the possible word combinations out of the following and translate them:

Tax Government Legal Benefit Regressive Direct percentage

Tax laws principle rate collection expenditure entity agency

Exercise 4. Match the definitions to the economic terms in the left column:

regressive tax redistribution Ability-to-Pay Principle of taxation to tax proportional tax fines progressive tax

a). to impose a financial charge upon a taxpayer; b). a tax imposing the same percentage rate of taxation on everyone; c). a principle which declares that people should be taxed according to their ability to pay; d). a tax imposing a higher percentage rate of taxation of people with high incomes than on those with low incomes. e). a tax imposing a higher percentage rate of taxation on low incomes than on high incomes f). civil penalties g). transferring wealthfrom the reachersection of society to poorer sections

IV. Text understanding

Exercise 5. Find in the text and translate a passage describing:

1. definition of the word “to tax”

2. progressive tax

3. four criteria of an effective taxation system

4. the Benefit Principle of taxation.

Exercise 6. Agree or disagree with the statements:

1. In modern taxation systems, taxes are levied in money.

2. Tax collection is performed by a non-government agency.

3. The method of taxation and the government expenditure of taxes raised is not debated in politics and economics.

4. There are two types of taxes in the United States.

5. One of the most important criterion of taxation is that a tax yields enough revenue.

6. The Benefit Principle of taxation says that people should be taxed according to their ability to pay.

7. Since the benefits of government services to individuals are hard to measure, the other basis for distributing taxes is income

Exercise 7. Answer the questions:

1. What does “to tax” mean?

2. What happens when taxes are not fully paid?

3. What is the difference between proportional, progressive and regressive tax?

4. What standards must government have to make taxation system effective?

5. What two ideas is the Benefit Principle of taxation based on?

6. What three things are fundamental for the Ability-to-Pay Principle of taxation?

Exercise 8. Read and translate the text.

Text В

VAT

For a number of industrial nations, the value added tax (VAT) is an important source of revenue. VAT is paid every time value is added to a good as it moves along the chain of production. Although there is no value added tax in the United States at the present time, there are those who favor its use. In support of their position, they make the following points:

• Since the VAT is paid at each stage of production, it is relatively easy for the government to collect and difficult to evade.

• Since all business transactions would be subject to the VAT, it can generate a lot of revenue.

• Because the tax is hidden from the consumers, who really pay it, there is likely to be less public opposition to it.

Those opposing the VAT argue that:

• It is regressive. Like any sales tax, it falls more heavily on the poor than on the rich taxpayer.

• Hidden taxes are unfair taxes. The VAT is inflationary because it increases prices (by the amount of the tax).