Comments

1. to deposit their money — для збереження вкладів

2. to lend excess funds — надавати кредит

3. ... in need of cash — коли потрібні гроші

4. ... that bring savers and borrowers together — що з’єднує кредиторів і дебіторів

5. to gain a clear understanding — щоб мати чітке уявлення

6. liabilities — пасив

7. assets — актив

8. the excess of assets over liabilities — перевищення активів над пасивами

9. ... they earn the interest — на них нараховується відсоток

10. liquidity — ліквідність

U n I t 16

Text A

There are three types of taxes in the United States: proportional, progressive and regressive.

A proportional tax is one that imposes the same percentage rate of taxation on everyone, no matter what their income. Even when income goes up, the per cent of total income paid in taxes does not change.

A progressive tax is one that imposes a higher percentage rate of taxation of people with high incomes than on those with low incomes.

A regressive tax is one that imposes a higher percentage rate of taxation on low incomes than on high incomes. For example, a person with a yearly income of $10,000 may spend $3,000 on food, clothing and medicine, while a person with a yearly income of $100,000 may spend $20,000 on the same essentials. If the state sales tax, which is a regressive tax, were 4 per cent, the person with the lower income would pay a lesser amount in dollars but a higher percentage of total income.^*

Sales Taxes

A sales tax is a general tax levied on consumer purchases of nearly all products. It is added to the final price paid by the consumer.

For the most part, sales taxes are collected by individual merchants at the time of the sale and are turned over weekly or monthly to the proper government agency. Most states allow merchants to keep a small portion of what they collect to compensate for their time and book-keeping costs.

The sales tax generally is a very effective means of getting revenue for states and cities.

Property Taxes

A major source of revenue is the property tax — a tax on real property and tangible or intangible personal property. Real property includes land, buildings and anything else permanently attached to them. Tangible property is all tangible items of wealth not permanently attached to land or buildings, such as furniture, automobiles, the stock of goods in retail stores and clothing. Intangible personal property includes stocks, bonds, mortgages, and bank accounts.

The main problem with personal property as a source of revenue is that many items are not always brought to the attention of the tax assessor — the person who places value on property for tax purposes. Because of this, many things that should be taxed never are. Another problem is that some property is very hard to evaluate fairly.

Comments

1. percentage rate of taxation — процентна ставка оподаткування

2. no matter what their income — незалежно від прибутку

3. sales taxes — податок з продажу

4. property taxes — податок на власність

5. tangible property — матеріальні активи

6. intangible property — нематеріальні активи

Text B

In order to have an effective tax system, government must have criteria or standards. One such criterion is that a tax yields enough revenue.

A second criterion is clarity. Tax laws should be written so that both the taxpayer and tax-collector can understand them. This is not an easy task but people seem to be more willing to pay taxes, when they understand them. A third criterion is ease of administration. A tax should be easy to collect. It should not require a large enforcement staff, and it should be designed so that citizens find it hard to avoid. This criterion also includes convenience and efficiency. That is the tax should be administered at the lowest possible cost. A final criterion is fairness. Taxes should be imposed justly. However, this is hard to do because people do not always agree about what is or is not fair when it comes to taxes.

In general taxes are based chiefly on two principles: the Benefit Principle and the Ability-to-Pay Principle.

The Benefit Principle of taxation is based on two ideas. First, those who benefit from government services should be the ones to pay for them. Second, people should pay taxes in proportion to the amount of services or benefits they receive.

The Ability-to-Pay Principle of taxation says that people should be taxed according to their ability to pay, no matter what benefits or services they receive. This principle is based on three things. First it is not possible to measure benefits, derived from government spending. Second, people with higher incomes suffer less discomfort than people with lower incomes even if they pay higher taxes. Finally, the only means most people have of paying taxes is the income they earn. Since the benefits of government services to individuals are hard to measure, the other basis for distributing taxes is income.