Comprensión de lectura de inglés

Which terms do the following sentences define ¿

1 the tax people pay on their wages and salaries is called

A) Capital transfer tax b) income tax c) wealth tax

2 a tax on wages and salaries or on company profits is a / an

a) direct tax b) indirect tax c) value – added tax

3 a tax levied at a higher rate on higher incomes is called a

a) Progressive tax b) regressive tax c) wealth tax

4 a tax paid on property , sales transactions , imports , and so on is a / an

a) Direct tax b) indirect tax c) value – added tax

5 a tax collected at each stage of production , excluding the alredy – taxed costs

a) Added – value tax b) sales tax c ) value – added tax

6 profits made by selling assets are generally liable to a

a) Capital gains tax b) capital transfer tax c) wealth tax

7 gifts and inheritances over a certain value are often liable to a

a) Capital gains tax b) capital transfer tax c) wealth tax

8 the annual tax imposed on people´s fortunes ( in some countries ) is a / an

a) Added – value tax b) capital gains tax c) wealth tax

9 making false declarations to the tax authorities is called

a) Fiscal policy b) tax avoidance c) tax evasion

10 reducing the amount of tax you pay to a legal minimum is called

a) Creative accounting b) tax avoidance c) tax evasion

2c reading

Read the text and decide which paragraphs could be given the following headings.

…. Advantages and disadvantages of different tax systems

…. Avoiding tax on profits

…. Avoiding tax on salaries

…. Tax evasion

… the functions of taxation

Taxation (and how to avoid it )

A the primary function of taxation is , of course , to raise revenue to finance government expenditure , but taxes can also have other purposes . indirect excise duties , for example , can be designed to dissuade people from smoking , drinking alcohol , and so on . governments can also encourage capital investment by permitting various methods of accelerated depreciation accounting that allow companies to deduct more of the cost of investments from their profits , and consequently reduce their tax bills.

B there is always a lot of debate as to the fairness of tax systems . business profits, for example , are generally taxed twice : companies pay tax on their profits ( corporation tax in Britain , income tax in the USA ), and shareholders pay income tax on dividends.

Income taxes in most countries are progressive , and are one of the mays in which governments can redistribute wealth . the problem with progressive taxes is that the marginal rate – the tax people pay on any additional income - is always high , which is generally a disincentive to both working and investing . on the other hand , most sales taxes are slightly regressive , because poorer people need to spend a larger proportion of their income on consumption than the rich .

c. the higher the tax rates, the more people are tempted to cheat, but there is a substantial blank or underground economy nearly everywhere. For example, self-employed people-whose income is more difficult to control than that of company employees-account for more that half of national income .Lots of people also have undeclared, part-time evening jobs (some people call this moonlighting) with small and medium – sized family firms., on which no one pays any tax or national insurance. In 1986, the director of the Italian national institute of statistics calculated the size of the underground economy, and added 16.7% to italys gross national product (GNP) figure, and then claimed that Italy had overtaken Britain to become the worlds fifth largest economy.

d. to reduce income tax liability, some employers give highly – paid employees lots of perks or benefits instead of taxable money, such as company cars, free health insurance, and subsidized lunches. Legal ways of avoiding tax, such as these, are known as loopholes in tax laws. Life insurance policies, pension plans and other investments by which individuals can postpone the payment of tax, are known as tax shelters. Donations to charities that can be subtracted from the income on which tax is calculated are described as tax – deductible.

e. companies have a variety of ways of avoiding tax on profits. They can bring forward capital expenditure (on new factories, machines, and so on) so that at the end of the year all the profits have been used up; this is known as making a tax loss. Multinational companies often set up their head offices in countries such as Liechtenstein, Monaco, the Cayman Islands, and the Bahamas, where taxes are low; such countries are known as tax havens. Criminal organizations, meanwhile, tend to pass money through a series of companies in very complicated trasactions in order to disguise its origin from tax inspectors – and the police; this is known as laundering money or money laundering.

2d. comprehension

According to the text, are the following statements TRUE or FALSE

1. taxes can be designed both to discourage and to encourage spending.

2. The same amount of money can be taxed more than once.

3. Progressive taxes may discourage people from working extra hours.

4. Sales taxes are unfair because poor people spend more than the rich.

5. The Italian government knows that about one seventh of national income escapes taxation

6. Loopholes are a common form of tax evasion

7. If

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