IV. Match each term in Column a with its definition in Column b:

Column A Column B

1. Ability-to-Pay Principle of taxation	a. An official who examines statements of people’s income and decides the tax to be paid.
2. Benefit Principle of taxation	b. Principle that states taxes ought to be paid by those who can best afford them.
3. taxman/tax-collector	c. A person whose job is to collect taxes.
4. taxpayer	d. A person who places value on property for tax purposes.
5. tax inspector	e. Principle that states taxes ought to be paid according to the amounts of benefit received from the government.
6. tax assessor	f. A person who pays taxes, esp income tax.

V. Define which of the following items best completes the statement:

1. Gasoline taxes are used for highway improvement. This is

an example of

a. Ability-to-Pay tax.

b. Benefits-received tax.

c. Progressive tax.

d. Value-added tax.

2. Which of the following is the best example of a tax based on the

ability-to-pay theory of taxation?

a. Sales tax.

b. Property tax.

c. Excise tax on gasoline.

d. Federal income tax.

VI. Say whether these statements are true or false and if they are

false say why:

1. To have an effective tax system, government must have criteria or standards. 2. People seem to be more willing to pay taxes, when they don’t understand them. 3. A tax should be easy to collect. 4. It should require a large enforcement staff. 5. People always agree about what is or is not fair when it comes to taxes. 6. It is possible to measure benefits, derived from government spending. 7. People with higher incomes suffer less discomfort than people with lower incomes even if they pay higher taxes. 8. The only means most people have of paying taxes is the income they earn.

VII. Complete the following sentences:

1. In order to have an effective tax system, government must have ... . 2. One such criterion is ... . 3. A second criterion is ... . 4. Tax laws should be written so that ... . 5. A third criterion is ... . 6. A final criterion is ... . 7. In general taxes are based chiefly on two principles: ... . 8. The Ability-to-Pay Principle of taxation says that ... . 9. The only means most people have of paying taxes is ... . 10. Since the benefits of government services to individuals are hard to measure, ... .

VIII. Ask someone:

if the second criterion is clarity; tax laws should be written so that both the taxpayer and tax-collector can understand them; this is an easy task; a tax should be easy to collect; the tax should be administered at the lowest possible cost; taxes should be imposed justly;

what government must have in order to have an effective tax system; the first criterion is; the third criterion is; this criterion also includes; the final criterion is; two principles taxes are based on; you can say about the Benefit Principle of taxation; the Ability-to-Pay Principle of taxation says; the only means most people have of paying taxes is.