Text 1. Read this article and give Russian equivalents to the underlined expressions.

Taxation. is the system of raising money to finance government. All governments require payments of money—taxes—from people. Governments use tax revenues to pay soldiers and police, to build dams and roads, to operate schools and hospitals, to provide food to the poor and medical care to the elderly, and for hundreds of other purposes. Without taxes to fund its activities, government could not exist. Throughout history, people have debated the amount and kinds of taxes that a government should impose, as well as how it should distribute the burden of those taxes across society. Unpopular taxes have caused public protests, riots, and even revolutions. In political campaigns, candidates’ views ontaxation may partly determine their popularity with voters. Taxation is the most importantsource of revenues for modern governments, typically accounting for 90 percent or more of their income. Countries differ considerably in the amount of taxes they collect. In the United States, about 28 percent of the gross domestic product, a measure of economic output,  goes  for  tax  payments.  In  Canada  about  36  percent  of  the  country’s  gross

domestic product goes for taxes. In France the figure is 44 percent, and in Sweden it is 51 percent. In addition to using taxation to raise money, governments may raise or lower taxes to achieve social and economic objectives, or to achieve political popularity with certain groups. Also, some economists consider taxation an important tool for maintainingthe stability of a country’s economy.

Types of taxes. Governments impose many types of taxes. In most developed countries, individuals pay income taxes when they earn money, consumption taxes when they spend it, property taxes when they own a home or land, and in some cases estate taxes when they die. In the United States, federal, state, and local governments all collect taxes. Taxeson pe o p le ’s incomes play critical roles in the revenue systems of all developed countries. In the United States, personal income taxation is the single largest source of revenue for the federal government. In 2008 it accounted for about 45,2% of all federal revenues. Payroll taxes, which are used to finance social insurance programmes such as social security and Medicare, account for more than a third of federal revenues. The United States also taxes the incomes of corporations. In 2008, corporate income taxation accounted for 12,1% of federal revenues.

Individual Income Tax. An individual income tax, also called a personal income tax, is a tax on a person’s income. Income includes wages, salaries, and other earnings from one’s occupation; interest earned by savings accounts and certain types of bonds; rents (earnings from rented properties); royalties earned on sales of patented or copyrighteditems, such as inventions and books; and dividends from stock. Income also includes capital gains, which are profits from the sale of stock, real estate, or other investments whose value has increased over time. The national governments of the United States, Canada, and many other countries require citizens to file an individual income tax return each year. Each taxpayer must compute his or her tax liabilit y—the amount of money he or she owes the government. After computing the amount of tax due, the taxpayer must send this information to the government and enclose the amount due.

Corporate Income Tax. All corporations in the United States and Canada must pay tax ontheir net income (profits) to the federal government and also to most state or provincial governments. U.S. corporate tax rates generally increase with income. The corporate income tax is one of the most controversial types of taxes. Although the law treats corporations as if they have an independent ability to pay a tax, many economists note that only real people—such as the shareholders who own corporations—can bear a taxburden. In addition, the corporate income tax leads to double taxation of corporate income. Income is taxed once when it is earned by the corporation, and a second time when it is paid out to shareholders in the form of dividends. Thus, corporate income faces a highertax burden than income earned by individuals or by other types of businesses. Some economists have proposed abolishing the corporate income tax and instead taxing the owners of corporations (shareholders) through the personal income tax. Other experts see the corporate income tax as the price corporations pay in return for special privileges from society. The most important of these privileges is limited liability for shareholders. This means that creditors cannot claim the personal assets of shareholders, because the liability of shareholders for the corporation’s debts is limited to the amount they have invested in the corporation.

Payroll Tax. Whereas an income tax is levied on all sources of income, a payroll tax applies only to wages and salaries. Employers automatically withhold payroll taxes from

e m p lo ye e s’ wages and forward them to the government. Payroll taxes are the  main sources of funding for various social insurance programmes, such as those that provide benefits to the poor, elderly, unemployed, and disabled.

Consumption Taxes. A consumption tax is a tax levied on sales of goods or services. The most important kinds of consumption taxes are general sales taxes, excise taxes, value-added taxes, and tariffs.

In the United States, consumption taxes account for only 17 percent of all tax revenues. This is considerably lower than in most other countries. In Canada, the figure is 27 percent, and in the United Kingdom it is 35 percent. General sales taxes and excise taxes are the largest sources of revenue for state and local governments in the United States, accounting for about 35 percent of their total tax revenues.

1. General Sales Taxes. A general sales tax imposes the same tax rate on a wide varietyof goods and, in some cases, services. In the United States, most states and many local governments have a general sales tax. Although sellers are legally responsible for paying sales taxes, and sellers collect sales taxes from consumers, the burden of any given sales tax is often divided between sellers and consumers. Most states exempt certainnecessities from sales tax, such as basic groceries and prescription drugs. Both individuals and businesses pay sales tax. 2. Excise Taxes. Federal, state, and local governments levy excise taxes, which are sales taxes on specific goods or services. Excise taxes are also called selective sales taxes. Goods subject to excise taxes in the United States and Canada include tobacco products, alcoholic beverages, gasoline, and some luxury items. Excise taxes are applied either on a per unit basis, such as per package of cigarettes or per litre or gallon of gasoline, or as a fixed percentage of thesales price. 3. Value-Added Tax. In Canada and Europe the favoured form of consumption taxation is a value-added tax (VAT). In this system, the seller pays the government a percentage of the value added to goods or services at each stage of production. The value added at each stage of production is the difference between the seller’s costs for materials and the selling price. In essence, a VAT is just a general sales tax that is collected at multiple stages. 4. Tariffs, also called duties or customs duties, are taxes levied  on imported or exported goods. Import duties also protect domestic industries from foreign competition by making imported goods more expensive than their domestic counterparts. In the United States, import duties were the largest source of federal revenues until the introduction of the income tax in 1913. Today they account for only a small portion of federal revenues.

Property Taxes. In principle, a property tax is a tax on an individual’s wealth— the value ofall of the pe rson ’s assets, both financial (such as stocks and bonds) and real (such as houses, cars, and artwork In the United States, state and local governments generally levy property taxes on buildings—such as homes, office buildings, and factories—and on land. The property tax is often unpopular with homeowners. One reason is that, because homes are not sold very often, governments must levy the tax on the estimated value of thedwelling. Some citizens believe that the government overvalues their homes, leading to unfairly high property tax burdens.

Estate, Inheritance and Gift Taxes. When a person dies, the property that he or she leaves for others may be subject to tax. An estate tax is a tax on the deceased person’s estate, which includes everything the person owned at the time of death—money, real estate, stock, bonds, proceeds from insurance policies, and material possessions. Governments levy estate taxes before the deceased person’s property passes to heirs. An inheritance tax also taxes the value of the deceased person’s estate, but after the estate passes to heirs. The inheritors pay the tax. Estate and inheritance taxes are sometimes collectively called death taxes. A gift tax is a tax on the transfer of property between living people.

Other Taxes. A poll tax, also called a lump-sum tax or head tax, collects the same amount of money from each individual regardless of income or circumstances. Poll taxes are not

widely used because their burden falls hardest on the poor. When the British government implemented a system of local poll taxes in 1990, citizens considered the tax so unfair that they held demonstrations—some violent—around the country. The extreme unpopularity of the tax contributed to the downfall of Prime Minister Margaret Thatcher. In the United States, the 24th Amendment, ratified in 1964, prohibited the payment of poll taxes as a requirement for voting in federal elections. Until that time, a number of Southern states had used poll taxes to deny poor blacks the right to vote. A pollution tax is a tax levied on a company that produces air, water, or soil pollution over a certain level established by the government. The tax provides an incentive for companies to pollute less and thus reduce damage to the environment. The United States, France, Germany, the Netherlands and Russia all levy taxes on some types of pollution. However, these taxes account for just a tiny amount of total tax revenue.

 

 

Task 1. Match the following expressions with the correct definitions:

1. Tax avoidance

2. Capital gain tax

3. Sales tax

4. Tax evasion

5. Income tax return

6. Value Added Tax (VAT)

7. Excise

8. Poll tax

9. Estate tax

 

 

a) tax paid on profits made by selling possessions or from money you have invested.

b) tax on the money and possessions of a dead person, paid by the heirs, when a value is over a certain amount set by the government.

c) tax that a government charges on services used and goods sold inside its country.

d) form which is filled by income tax payers who state how much they have earned and what money they do not have to pay tax on, and is used to calculate how much tax they must pay.

e) tax of a fixed amount collected from every citizen.

f) an amount of money charged as tax in addition to the ordinary price of an article or a service. Because the tax is collected from the customer, it is a consumption tax.

g) any legal way of reducing the amount of tax one has to pay.

h) illegally  paying  less  tax  than  one  should  by  not  declaring  certain  income  is considered to be a crime in almost all countries.

i) tax added to the price of something you buy, and paid by the buyer and seller, who then pays it to the government.

 

 

Task 2. Join the halves of sentences below. Translate into Russian:

1. Income tax was first implemented in Britain in December of 1798

2. Personal income tax is often collected on a pay-as-you-earn basis,

3. If someone buys a building, uses it for business, then sells it again,

4. In United States tax law, there is a distinction between an estate tax and an inheritance tax:

5. In England customs duties were traditionally part of the customary revenue of the king,

6. Community charge was introduced by the Conservative government as a way of paying for local government services;

7. In the Netherlands property tax is levied on homes on a municipal basis in two parts:

8. In the United States, sales tax is nearly always explicitly added on and not included in the price,

9. Norway, Denmark and Sweden have the highest VATs at 25%

10. Tax avoidance is the legal utilisation of the tax regime to one's own advantage,

11. Former Vice President Al Gore's proposal to replace payroll taxes with a tax on pollution, including carbon dioxide, to help cut greenhouse gas emissions and curb global warming is

12. If you give someone money or property during your life, you may be subject to federal gift tax,

13. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,

 

 

a) they must pay capital gain tax on the profit that they make from the sale.

b) and therefore did not need parliamentary consent to be levied, unlike land tax, or other impositions.

c) in order to reduce the amount of tax that is payable by means that are within the law.

d) and includes, in particular, dishonest tax reporting.

e) for the one who lives in the house and one for the owner of the house.

f) however, the money and property you own when you die may be subject to federal estate tax.

g) a notable exception is sales taxes on gasoline.

h) to pay for weapons and equipment in preparation for the Napoleonic wars.

i) although reduced rates are sometimes used.

j) a welcome idea that deserves to be taken seriously.

k) however, many people protested against this tax, and it was replaced with the council tax, based mainly on the value of people’s houses.

l) the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate.

m) with small corrections made soon after the end of the tax year.

 

 

Task 3. Give Russian equivalents to the following expressions used by President George W. Bush in his “Remarks on Tax Cut Proposal” in 2002:

· To face economic challenges, to feel squeezed

· Credit card debt, consumer debt

· To get tax relief

· Average mortgage for a month

· To be grouped in five income tax brackets

· To get a $1000 tax credit per child

· The top federal income tax at almost 40%

· To reduce the marginal tax rate