Taxes and taxation

Words & word-combinations to the text:

inevitable reality – неминуча реальність to exist - існувати purpose – мета, ціль to raise revenue – збирати виручку to represent - представляти a means of redistributing income – засіб перерозподілу прибутку a payment exacted on persons – плата, що стягується з осіб economic entities – економічні організації to discourage the consumption – відбивати бажання споживання to levy taxes – стягувати податки inheritance taxes – податки на спадщину gift taxes – податки на подарунки assets - активи overall revenue picture – загальна картина виручки sales and excise taxes – податки зі збуту та акцизи monetary value – грошова вартість

inequality of income distribution – нерівність у розподілі прибутку compulsory character – обов’язковий характер lack of correlation – відсутність взаємозв’язку direct tax – прямий податок wealth and social security charges – податки на власність та соціальне забезпечення a built-in stabilizer – вбудовані стабілізатори marginal propensity – гранична схильність indirect tax – непрямий податок retail level – роздрібний рівень value added tax – податок на додану вартість (ПДВ) selective tax – вибірковий податок a consumption tax – споживчий податок fairness - справедливість clarity and certainty – ясність та впевненість convenience of payment – зручність оплати ease of administration – легкість керування flexibility – гнучкість

Taxes are inevitable reality. They have existed, they do exist and they will continue to exist in every country.

While their main purpose is to raise revenue, taxes represent a means of redistributing income.

Tax is a payment exacted on persons, corporations and other economic entities by a government to help pay for government operations or to discourage the consumption of the goods or services taxed by raising their cost.

Tax base is the money, property and people on whom taxes could be levied.

People are taxed on what they earn, on what they spend, and on what they own. Firms are taxed as well as households. Taxes are numerous. So, taxes can be levied on assets, on incomes, and on expenditures. Inheritance taxes and gift taxes are taxes on assets; such taxes do not - and cannot - play a large continuing role in the overall revenue picture. Taxes on incomes are important and can be quite progressive. Taxes on expenditures - especially sales and excise taxes - are related to the monetary value of expenditures, not the incomes of those spending the money; they are known to be regressive.

A proportional tax takes amounts of money from people in direct proportion to their income. A regressive tax takes a larger percentage of income from people, the lower their income. A progressive tax takes a larger percentage of income from people, the larger theirincome.

A tax system is said to be progressive if it decreases the inequality of income distribution and to be regressive if it increases the inequality.

The different taxes can be defined. Taxes are distinguished by their compulsory character and by the lack of correlation between the amount paid and the value of the public services financed by the taxes to the taxpayers.

Direct tax is a tax that is levied on the wealth or income of individuals. Income, wealth and social security charges are examples of direct taxes. Direct taxes act as a built-in stabilizer because they reduce the marginal propensity to consume out of national income.

Direct taxes reduce the marginal propensity to consume out of national income.

Indirect tax - a tax that is levied on expenditure such as a sales tax imposed at the retail level, excise tax, or value added tax. Some economists say indirect taxes ate regressive (in that taxes on commodities burden the poor more than the rich), and inflationary (since they raise prices). Excise tax - a selective tax - sometimes called a consumption tax - is a tax on certain goods produced within or imported into a country. Sales tax – a tax levied on the exchange of goods and services at one of more stages in the process of distribution.

The personal tax rate is itself a function of taxable income, and it is useful to distinguish between two different rates. The average tax rate is paid by an individual or by a couple is their income tax divided by total income. The marginal tax rate is the amount of tax the taxpayer would pay on an additional dollar of income.

Generally the following criteria for a "good tax" may be defined.

o Fairness — based on the ability to pay. A tax should also treat people equally.

o Clarity and certainty - taxpayers should know the rate of the tax and how it is to be paid.

o Convenience of payment - easy for taxpayers to pay and easy for governments to collect.

o Ease of administration - cost of collecting a tax should be low.

o Flexibility - adjusts to economic conditions (in prosperous times the tax should collect more revenue and in hard times less).

Дата добавления: 2015-10-29