Grammar

Past Tenses

Simple Perfect

had + Participle II

• Action referring to an earlier past

He got the loan but unfortunately the court had declared him a bankrupt.

They started discussing their budget as soon as the Chief Execute had arrived.

He was excited because he had never taken part in such representative meetings

• Action referring to unfulfilled hopes and wishes with verbs expect, hope, mean, suppose, think, and want.

I had hoped to return the loan in time, but I didn’t manage to do it.

Perfect Continuous

Had been + Participle I (V_ing)

• Action in progress through out a period

They looked very tired because they had been making a very important order days and nights.

Read the text about the attempts of German politicians to change tax system in the country

Will Germany start tax reform?

Paul Kirchhof, a lawyer at Heidelberg Univer­sity tried to persuade Germany that the country's tax system needs radical reform. He suggested the country would do away with most tax exemptions and cut the top marginal income-tax rate to 25%.

Angela Merkel said that she did not expect tax reform this year.

That Germany badly needs tax reform has been recognised for years. What is new is the attention being paid to simplic­ity, which is popular with voters. Hardly a day passes without a politician demand­ing that tax returns be made no larger than a "beer mat", or quoting the claim that Ger­many produces over two-thirds of the world's academic tax literature.

Germany is hardly the only country to suffer from fiscal complexity. But marginal and average tax rates are high, especially for companies. That matters, as it makes the country a less attractive place in which to invest. Other countries have responded to a similar lack of competitiveness by lowering marginal tax rates and scrapping tax breaks, broadening the tax base and simplifying the system. But Germany has managed only incremental reforms. These have left a patchwork that, says the Ger­man council of economic experts, "is fast losing any semblance of being a structured, rational system".

One often cited explanation for this is Germany's federal system, which gives the opposition a de facto veto over tax changes. Less well known is the role of the country's Constitutional Court, says Steffen Ganghof, a researcher at the Max Planck Institute for the Study of Societies in Cologne, in a forthcoming book. The court often has the last say in tax policy. It is widely assumed that it would strike down any law openly breaking with one tradition of German taxation: those cor­porate- and income-tax rates must be about the same. Combined with the Gewerbesteuer, a court-protected local trade tax, this has meant that politicians are lim­ited in their ability to respond to tax com­petition without losing revenue.

The CDU*, adds Mr. Ganghof, has often proposed bolder tax reforms than other right-wing parties. One recent plan drawn up by Friedrich Merz, a CDU parliamen­tary leader, would have put Germany ahead of other countries in simplicity. It suggests three tax rates: 12%, 24% and 36%, for incomes above €8,000, €16,000 and €40,000 respectively. Such radicalism does not make for easy compromises. De­spite scrapping many tax breaks, Mr. Merz's plan would cut revenues by €24 bil­lion in the first year - which the govern­ment cannot afford. Anyway, the govern­ing Social Democrats (SPD) dislike low tax rates, because they want progressive taxes to balance high social-security contribu­tions, which tax lower incomes propor­tionately more than higher ones.

More surprisingly, the Christian Social Union, or CSU, the CDU’s sister party in Bavaria, has qualms of its own. It recognises that the CDU's tax ideas do not square with its health-care plans, which would make social-security contributions more regressive. The CSU has come up with a rather less ambitious proposal, which gets rid of some tax breaks and low­ers the top rate only from 45% to 39%. So what way will the government choose?

One option would be to copy Scandina­vian countries by bringing in a "dual in­come tax" that treats labour and capital in­come differently. While wages can still be taxed progressively, this allows a flat rate for dividends, capital gains and rents. That would mean taxing capital and labour dif­ferently, according to how mobile each is. The CDU could, at least partially, test its flat tax; the SPD and CSU would keep their progressive income tax. But this would not be legal, says Mr. Kirchhof, who once sat on the Constitutional Court.

“The Economist”

*CDU – Christian Democratic Union.

COMPREHENSION CHECK.

Exercise 1. Match the definitions with the words from the text.

1. competitiveness	a. increasing
2. incremental	b. to make smth. die or become so bad that it can exist no longer
3. semblance	c. refusal from cutting the tax rate
4. strike down	d. a thick piece of card that you use for putting your drink on esp. in a bar
5. right-wing parties	e. reduction of the tax rate
6. exemption	f. if one idea, opinion, explanation is in conformity with another, they both seem good or reasonable
7. beer mat	g. difficult nature of smth. which may be hard to understanding, to do, to deal with
8. oft-sited	h. the most conservative parties
9. tax break	i. thoughts that what you are doing might be bad or wrong
10.marginal tax rate	j. the ability to compete in markets for goods and services
11.patch work	k. the situation in which smth. only appears in a small amount
12.complexity	l. permission to ignore smth. such as a rule, obligation, payment
13.academic tax literature	m. mostly referred to
14.tax return	n. smth. in great disorder, chaos
15.scrapping tax breaks	o. manuals and books devoted tax problems
16.to square with	p. additional tax paid on each unit in the revenue increased
17.qualms	q. a report by a tax payer to the tax authorities of his or her income

Exercise 2. Read the text again and complete the following sentences:

1. Germany badly needs tax reform because …

2. Marginal and average tax rates are very high for …

3. Other countries attract foreign investments by …

4. Now German system of taxation is far from …

5. The complexity of German tax system is explained …

6. The main opponent of breaking a tradition of German taxation is …

7. The main traditional law in tax system says that …

8. Friedrich Mezz suggests 12%, 24% and 36%tax rates for …

9. That tax system if introduced …

10. People with less incomes pay tax …

11. Duel income tax …

Exercise 3. Insert the proper word

CRACKDOWN ON “ALCOHOL DISORDER ZONES”

P

will be imposed, troublemakers, to impose charges, the revenue, target, will stay away, to cut alcohol-related crime, to reduce, the opposite effect, to pay a levy, licensed premises

olice forces and local authorities are to

be given powers ¹… on pubs, nightclubs

and other ² … in binge drinking trouble

spots, writes Andrew Porter.

Charles Clarke, the home secretary, believes

the new policy could help ³ … and disorder by10%.

He is proposing that areas blighted by disorder caused by drinking can be identified as "alcohol disorder zones" (ADZs), where licensed premises would have ⁴ … if they did not clean up their act.

The Home Office estimates that up to 30 police forces are ready to declare ADZs. Under the plans the police will keep ⁵ … that is raised.

Licensed premises in trouble spots will be given 12 weeks ⁶ … alcohol-related crime significantly.

If this ⁷ … is not met, the police will declare the area a "live" ADZ and levies - a minimum of £100 a week — ⁸ … .

Mark Hastings, of the British Beer and Pub Association, said yesterday: "Imposing alcohol disorder zones will have ⁹ … to what the government wants.

"People they want to attract to pubs and bars ¹⁰ … and the ¹¹ … are likely to carry on coming."

LEXICAL AND GRAMMAR EXERCISES

I. Make up sentences.

1. And, security, taxes, are, state, benefits, spent, usually, social, particular, for.

2. Government, police, taxes, to, due, state medical healthcare, our, are, even, kept, army.

3. Holland, assets, Switzerland, in, as, 40%, about, makes, tax, up, countries, all, of, some, inheritance.

4. Such, individuals, incomes, tax, income, interest, all, is, from, dividends, as, rent, of, wage, kinds, paid.

5. Used, for, communities, local, needs, by, taxes, usually, are, their.

6. Duties, to, have, too, not, pay, only, customs, manufacturers, individuals, sometimes, but.

7. Drinks, gambling, on, education, alcoholic, morality, the, money, spirit, high, duties, received, especially, children, of, in, should, on, of, excise, spent, be, from, tobacco.

8. Legally, try, to, is, riches, taxes, and, ignore, many, evade, but, prosecuted, it.

OUTSTANDING ECONOMISTS.

Exercise 2. Chose the right sentence.

1. Finn Kydland, a professor from UC Santa Barbara, has got/got/had been getting the Nobel Prize in Economics in 2004.

2. He had shared/had been sharing/shared $1.3 mln prize equally with his colleague Edward Prescot from Arizona State University.

3. The first research of Kydland and Prescot had been published/was published/had been publishing in1977.

4. It had found/found/had been finding that economic decision-makers shall commit/should commit/shall have committed to a specific long-term policy.

5. Also they stressed/had stressed/had been stressing that it is better not make short-term changes in times of economic troubles.

6. The first research is found/had been found/was found very influential because of its mathematical models.

7. In their second part of research they had studied/studied/had been studying the driving forces behind business cycles, and had published/published/has published it in 1982.

8. They refuted/had refuted/have refuted that business cycles are dependant on consumer demand.

9. The scientists proved/have proved/had proved that large changes in supply, dramatic events and technological innovations have more far reaching effects on the economy.

Exercise 3. Chose the correct tense.

Lily ¹(start) her business recently. Two days ago she ²(buy) new commodity and at that moment she ³(display) it for sale. Suddenly a fragile vase ⁴(slip) out of her hands and ⁵(fall) before she ⁶(have) a chance to catch it. Of course it ⁷(break). And it ⁸(be) a very valuable, old Chinese vase. Its price ⁹(exceed) the price of any good in the shop. What ¹⁰(do)? She picked up the pieces and remembered that a very rich client ¹¹(order) such vase not long ago. He even ¹²(leave) his address. She quickly ¹³(pack) the pieces into the box, ¹⁴(put) customs declaration, price list and certificate of validity and ¹⁵(send) it to Mr. X. Before sending the parcel she ¹⁶(write) a message where she kindly ¹⁷(ask) to pay the check as soon as possible. Also she ¹⁸(congratulate) Mr. X with the coming holiday and added that she ¹⁹(make) him a good discount. Can you imagine her disappointment when she ²⁰(get) the parcel back with many thanks and apologizes and her astonishment when she ²¹(unwrap) the paper and ²²(see) a beautiful intact vase!

Exercise 4. Comment on the sources of government revenue and public spending in the U.K.