Ex.1. Read the words with the following letter combinations.

are [ɛə] welfare, care, dare, spare, rare, compare

ire [ɑiə] retire, require, fire, acquire, tire, expire

air [ɛə] fair, stair, pair, hair, air, lair

aw [ɔ:] law, lawn, awe, awful, awkward, paw

Ex.2. Read the following words with the letter g in different positions.

[g] degree, regulation, government, slogan, great, regardless

[dʒ] energy, engineering, generate, average, suggest, percentage, marginal

[ŋ] among, nothing, seeing, paying

Ex.3. Read the words in the groups bellow. Pay attention to the word stress.

a) words with the stress on the first syllable:

certain, operate, elderly, benefit, common, public, vary, burden, taxable, influence, social, fiscal, modify, pattern, purpose, legal, levy, advocate, generate, governance, equity, equitable, argue, loophole, standard, manner, principle, measure, recognise, average, marginal, total;

b) words with the stress on the second syllable:

except, society, accept, include, utilities, activity, distribute, security, performance, transaction, transfer (v), discourage, taxation, degree, complain, criteria, efficient, intelligible, allow, withhold, afford, discomfort, impose, proportional, progressive, regressive, percentage;

c) polysyllabic words with the main and secondary stress:

economic, engineering, infrastructure, education, unemployment, regulation, externalities, representation, accountability.

Ex.4. Practice reading the following words.

Except, accept, throughout, vary, redistribute, social, society, disabled, transaction, purpose, consequential, representation, externalities, accountability, governance, government, criterion, criteria, equitable, argue, simplicity, intelligible, efficiency, withhold, measure, assume, percentage, average.

B. Word formation

Ex.5. Form verbs adding prefix re- as in the model. Explain what new meaning the prefix adds to the words.

Model: write → rewrite

Distribute, price, do, apply, appoint, organise, appraise, make, build, construct, count, examine.

Ex.6. Identify each of the following words as a noun-thing, a noun-person, an adjective, or an adverb. Translate the words into Ukrainian.

Taxation, physical, governance, accountability, recognise, theoretic, dangerous, manageable, protection, difference, homeless, really, idealist, excellence, possible, leadership, society, shorten, generate, specify, taxpayer, hopeful.

Ex.7. Choose the variant, A, B, or C, that correctly completes each sentence.

1. The __________ of the news was clear for everybody.

2. The company was unable to __________ enough profit to stay in business.

3. As your medical problem is so serious, you should see a __________ .

4. The manager was able to __________ his team to perform better.

5. It is __________ that they live so close to the university.

6. He gave an __________ incorrect answer to the question.

7. It was necessary for the speaker to __________ her message.

8. He was not concerned about the __________ of his actions.

9. The children ran __________ to the entrance of the park.

10. I think this book is one of the most __________ novels of recent years.

Text a: taxes

Active Vocabulary

Benjamin Franklin once wrote, “In this world nothing can be said to be certain except death and taxes”. Yes, we as a society have come to accept the inevitability of taxes. Everyone dislikes them, but we recognize their need.

Taxes are any payment on behalf of the individual to the government. Taxes are used to pay for all government services. Without taxes, the government would have no money to operate.

Purposes of Taxation

Funds provided by taxation have been used by governments throughout history to carry out many functions. Some of these include the enforcement of law and public order, protection of property, economic infrastructure (roads, legal tender, enforcement of contracts, etc.), public works, social engineering, and the operation of government itself. Governments also use taxes to fund welfare and public services. These services can include education systems, health care systems, pensions for the elderly, unemployment benefits, and public transportation. Energy, water and waste management systems are also common public utilities.

Governments use different kinds of taxes and vary the tax rates. This is done to distribute the tax burden among individuals or classes of the population involved in taxable activities, such as business, or to redistribute resources between individuals or classes in the population. Modern social security systems are intended to support the poor, the disabled, or the retired by taxes on those who are still working. In addition, taxes are applied to influence the macroeconomic performance of the economy (the government's strategy for doing this is called its fiscal policy), or to modify patterns of consumption or employment within an economy by making some classes of transaction more or less attractive.

Four R’s

Taxation has four main purposes or effects: Revenue, Redistribution, Repricing, and Representation.

The main purpose is revenue: taxes raise money to spend on armies, roads, schools and hospitals, and on more indirect government functions like market regulation or legal systems. This is the most widely known function.

The second purpose is redistribution. Normally, this means transferring wealth from the richer sections of society to poorer sections.

The third purpose of taxation is repricing. Taxes are levied to address externalities: tobacco is taxed, for example, to discourage smoking, and many people advocate such policies as implementing a carbon tax.

The fourth, consequential effect of taxation in its historical setting has been representation. The American revolutionary slogan "no taxation without representation" implied this: rulers tax citizens, and citizens demand accountability from their rulers as the other part of this bargain. Several studies have shown that direct taxation (such as the income tax) generates the greatest degree of accountability and better governance, while indirect taxation tends to have smaller effects.

What Makes a "Good Tax"

Just about every taxpayer complains about the high rate of taxes, yet if one were asked whether they would trade the tax for the removal of service, they would rather pay the tax. In order for taxes to be acceptable, however, they must meet certain criteria. In order for a tax to be successful, it must be equitable, simple, and efficient.

For most people, it is believed that taxes should be impartial and fair. However, there is dispute over the level of equity of a tax. Some believe that a tax is fair only if everyone pays the same amount − a flat tax. Others argue that a tax is only fair if wealthier people pay more than those with lower incomes – a progressive tax. Many also argue over the equity of tax loopholes seeing that they allow some people to get out of paying certain taxes.

A second standard for taxes is simplicity. Tax laws should be written in an intelligible manner so that both the taxpayer and the tax collector can understand them. Though it is not an easy task, people are more willing to pay their taxes if they understand them.

Efficiency is the final principle of taxation. A tax should be easy to administer and to gain money from. The income tax fits into this category. An employer withholds a portion of each employee's pay and then sends a single check to the government on a regular basis. At the end of the year the employer notifies each employee of the amount of tax withheld.

Principles of Taxation

The benefit principle of taxation is based on two ideas. The first and foremost is that those who benefit from services should be the ones who pay for them. Secondly, people should pay taxes in proportion to the amount of services or benefits they receive. But there are two limitations of this type of taxation. First, many government services provide the greatest benefit to those who can least afford to pay for them (i.e. welfare). The second limitation is that the benefits often are hard to measure.

The second principle of taxation is the ability-to-pay principle, which is based on the idea that people should be taxed according to their ability to pay, regardless of the benefits they receive. This type of tax recognizes that societies are not always able to measure the benefits derived from government spending. It also assumes that people with higher incomes suffer less discomfort paying taxes than people just getting by on their income would.

The Three Types of Taxes

The three types of taxes are the proportional tax, the progressive tax, and the regressive tax.

A proportional tax imposes the same percentage of taxation on everyone, regardless of income. If the percentage tax rate is constant, the average tax rate is constant, regardless of income. This means that if a person's income goes up, the percentage of total income paid in taxes does not change.

The second tax, the progressive tax, imposes a higher percentage rate of taxation on people with higher incomes. Progressive taxes use a marginal tax rate that increases as the amount of taxable income increases. Therefore, the percentage of income paid in taxes increases as income goes up.

The final tax is the regressive tax, which imposes a higher percentage rate of taxation on low incomes than on high incomes. For example, if the state sales tax were 5%, the person with the lower income would pay a greater percentage of their total income in sales tax.

Language notes:

We... have come to accept... – ми … (поступово) порозумілися…;

enforcement of law and public order – забезпечення дотримання закону і громадського порядку;

social engineering – соціальна інженерія: наука, що вивчає методи перебудови суспільства;

social welfare – (амер.) соціальне забезпечення, соціальна допомога;

water and waste management system – система управління водними ресурсами і використання відходів;

carbon tax – податок на викиди вуглекислого газу;

direct tax – прямий податок, тобто податок, що стягується державою безпосередньо з доходів чи майна платника податку (прибутковий податок – income tax, податок на прибуток підприємств – corporation income tax, податок зі спадку і дарунку – inheritance/gift tax, податок на майно фізичних осіб – personal wealth/property tax, податок на видобування корисних копалин – severance tax под.);

indirect tax – непрямий податок, тобто податок на товари та послуги, встановлений у вигляді надбавки до ціни або тарифом (акциз – excise tax, податок на додану вартість – value-added tax, мито – customs duty, екологічні податки – environmentally related taxes/charges/fees/duties);

tax loophole – "шпарина" в податковому законодавстві;

if one were asked whether they would trade the tax for the removal of service, they would rather ... – якщо б кого-небудь запитали, що б він вибрав: платити податок або обійтися без якоїсь послуги, він скоріше б...

if the state sales tax were 5%, the person with the lower income would pay… – якби податок на купівлю (продаж) був 5%, людина з більш низьким доходом платила би...

Vocabulary focus

Ex.1. Find the English equivalents in the text.

Податок; оподаткування; неминучість податків; від імені особи; виконувати багато функцій; охорона власності; забезпечення дотримання контрактів; фінансувати соціальне забезпечення; система охорони здоров'я; допомога з безробіття; комунальні послуги; ставка податкового обкладання; податковий тягар; розподіляти між; діяльність, що підлягає оподаткуванню; фіскальна політика; модель споживання або зайнятості; передача багатства від більш заможних верств населення до більш бідних; бути спрямованим на зовнішній ефект економічної діяльності; підтримувати політику; вимагати звітність; висока податкова ставка; щоб податки були прийнятними; відповідати певним критеріям; справедливість податків; уникнути сплати визначених податків; утримувати частину зарплати; на регулярній основі; до відома кожного працівника; першочерговий принцип; мати можливість (дозволити собі платити за послуги; незалежно від отриманих пільг; відчувати менше незручностей; жити (виживати) тільки на дохід.

Ex.2. Give Ukrainian equivalents for the following words and phrases.

Payment on behalf of the individual to the government; to carry out many functions; to use different kinds of taxes; to vary tax rates; to fund welfare and public services; to distribute the tax burden; to redistribute resources; to support the poor, the disabled and the retired; to influence the microeconomic performance; patterns of consumption or employment; to raise money; a consequential effect of taxes; “no taxation without representation”; to generate a high degree of accountability and governance; to dispute over the level of equity; tax loopholes; the amount of the withheld tax; to impose the same percentage of taxation on everyone.

Ex.3. Give three forms of the following verbs. Find the sentences with these verbs in the text.

Write, say, pay, operate, provide, carry out, vary, do, spend, show, meet, see, understand, withhold, impose, mean, go up.

Ex.4. Match the words on the left with the definitions on the right.

Ex. 5. Make up verb+noun collocations (there may be several variants).

Ex.6. Fill in the gaps in the following verb collocations with appropriate prepositions or adverbs.

Payment ___ behalf ___ the individual ___ the government; to pay taxes ___ government services; to carry ___ many functions; to distribute the tax burden ___ individuals or classes; population involved ___ taxable activities; to spend money ___ public services; to transfer wealth ___ richer sections of society ___ poorer sections; to complain ___ the high rate ___ taxes; to demand accountability ___ the authorities; to argue ___ the level of equity; to get ___ ___ paying certain taxes; to gain money ___ taxation; to notify workers ___ the withheld taxes; to be based ___ two ideas; to provide benefits ___ those who need them; to get ___ ___ one’s income; to impose the same percentage of taxation ___ everyone regardless ___ income.

Ex.7. Choose the appropriate word or phrase to complete the following sentences.

Energy, water and waste management systems; impartial and fair; proportional tax; raise money; distribute the tax burden; certain criteria; welfare and public services; redistribution; on behalf of the individual; the poor, the disabled, or the retired; in an intelligible manner.

Taxes are any payment ____________ to the government.

Governments also use taxes to fund ____________ .

____________ are common public utilities.

Governments use different kinds of taxes and vary the tax rates in order to ____________ among individuals or classes of the population.

Modern social security systems are intended to support ____________ by taxes on those who are still working.

Taxes ____________ to spend on armies, roads, schools and hospitals, and on more indirect government functions like market regulation or legal systems.

____________ means transferring wealth from the richer sections of society to poorer sections.

In order for taxes to be acceptable, they must meet ____________ .

To be equitable means to be ____________ .

Tax laws should be written ____________ so that both the taxpayer and the tax collector can understand them.

A ____________ imposes the same percentage of taxation on everyone, regardless of income.

Ex.8. Look through the text again and replace the words in bold with the linking words and phrases given below.

On behalf of, in addition, while, yet, in order for smth/smb to do smth, so that, both ... and, (al)though, according to, regardless of, as

Taxpayers complain about high tax rates. However, they would prefer to pay taxes for using certain services rather than do without them.

Taxes are paid on the part of the individual to the government.

If taxes are to be acceptable, they must meet certain criteria.

People should be taxed on the basis on their ability to pay.

A proportional tax means the same percentage of taxation on all taxpayers no matter what their income is.

In the progressive tax, the percentage of income paid in taxes increases when income goes up.

Taxes are used to pay for public goods and services. Besides, they are applied to influence the macroeconomic performance of the economy.

Direct taxation provides greater accountability and better governance, whereas indirect taxation may have smaller effects.

Tax laws should be written in an intelligible manner for the taxpayer as well as the tax collector to understand them. Even if it is not an easy task, understanding tax laws makes people more willing to pay taxes.

Ex.9. Translate into English.

Ніхто не любить податки, але всі визнають їх необхідність.

Податки – це будь-які виплати від індивідуальної особи уряду, які використовуються для оплати функцій, що здійснюються урядом.

Ці функції включають забезпечення дотримання закону та суспільного порядку, охорону власності, підтримку економічної інфраструктури та інші сфери діяльності уряду.

Податки також використовуються для фінансування соціального забезпечення, систем суспільної освіти, охорони здоров`я та пенсійного забезпечення, допомоги по безробіттю, суспільного транспорту та інших суспільних послуг.

Уряд використовує різні види податків, щоб розподілити податковий тягар серед різних верств населення.

Податки застосовуються для впливу на макроекономічну діяльність країни, що називається фіскальною політикою уряду.

Податкова політика має наступні цілі: приносити дохід, забезпечувати перерозподіл багатства, коригувати ціноутворення та забезпечувати звітність держави за використані податки.

Система оподаткування має бути справедливою, простою та ефективною в організації управління.

Простота оподаткування означає, що податкові закони мають бути зрозумілими як платникам податків, так і податковим організаціям.

Система оподаткування заснована на двох принципах: пільговому принципі та принципі платоспроможності.

Пільговий принцип передбачає, що ті, хто отримує пільги, сплачують на них податок.

Принцип платоспроможності означає, що люди сплачують податки відповідно до своїх можливостей, незалежно від отриманого доходу.

Існує три види податків: пропорційний, прогресивний та регресивний.