1. Central banking. Gabriel Mongano is an economics research student ,
specializing in monetary policy. You will hear him outlining the functions of a central
bank ,and discussing whether it should be independent from the government, and run by bankers ,or under the control of the government.
1a Discussion
Do you know whether the central bank in your country is independent?
What about these banks? Do you know if they are independent?
1. the Bank of England
2. the Federal Reserve Board(USA)
3. the Bundesbank (Germany)
4. the Japanese central bank
5. the Chinese central bank
1c Vocabulary
Read the six sentences below, which also summarize central banking functions, but slightly
Differently, and match them with the six expressions you have written in 1b.
A controlling the amount of banknotes in circulation
B establishing maximum and minimum lending rates, thereby controlling the credit system
C ensuring that banks have a sufficient liquidity ratio to allow customers to withdraw their
deposits when they want
D intervening on foreign exchange markets, buying or selling large amounts of the national
currency, to prevent major fluctuations
E lending money to a commercial bank in danger of going bankrupt
F selling government bonds to commercial banks or buying them back, in order to alter the
amount of credit the banks can offer (and thereby alter the money supply)
1e Discussion
Does (or would) the government in your country exploit the ‘political business cycle’ by
increasing the money supply or government spending, or lowering taxes, in order to increase economic activity in the months before an election, despite the long-term inflationary consequences?
Do you agree that central banks should be controlled by (unelected) bankers rather than by elected governments – which will often do everything possible to get reelected?
Do you agree that price stability (i.e. keeping inflation low ) is more important than other economic aims, such as attempting to reduce unemployment?
2 Taxation
2a Discussion
Benjamin Franklin, who wrote that ‘In this world nothing cam be said to be certain except death and taxes!’
The last sum of money you received had probably already been taxed, or will be liable to taxation, depending on which country you are in. Similarly, the last sum of money you spent probably included a percentage of tax.
Make a list of all the different types of taxes you can think of. If you do not know the actual names, try to describe the different taxes, e.g. ‘Tax you pay if you import something from another continent,’ and so on.
2b Vocabulary
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 the wages and salaries or on company profits is a
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 already-taxed costs from prvious
stages, is called a / an
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
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 purpoces.Indirect excise duties, for example, can be designed to dissuade people from smoking , drinking alcohol,and so on.Governnment can also encourage capital investment by permitting various methods of accelerated depreciation accounting that allow compnies 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,argenerally taxed twice:companies paytax on their profits, and share holders pay income tax on dividends.Income taxes in most countries are progressive, and are one of the ways 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 isgenerally a 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 consumtion that the rich.
C The higher the tax rates the more people are tempted to cheat , but there is a substantial ‘’black’’ or ’’underground’’ economy nearly everywhere.In Italy , for example, self –employed people –account for more than half of nation income.Lots of people also have undeclared , part-time evening jobs,with small and medium-sized family firms, on which no one pays any tax or national insurance.At the end 1986, the director of Italian Nation Institude of Statistic calculated the sized of the underground economy. And added 16.7% to Italy’s gross national product(GNP),figure, and then claimed that Italy had other taken Britain to become the world’s fifth largest economy.
D To reduce income tax liability, some employers give highly-pays employees lots of ‘’perks’’ instead of taxable money, such as company cars, free health insurance ,and subsidies lunches.
Traducerea
A Impozitare (şi cum să-l evite!) O Funcţia primară de impozitare este, desigur, de a creste veniturile pentru finanţarea cheltuielilor guvernamentale, dar taxele pot avea, de asemenea, alte accize purpoces.Indirect, de exemplu, pot fi proiectate pentru a descuraja oamenii din fumatul, consumul de alcool, şi aşa mai departe.Governnment pot încuraja, de asemenea, investiţii de capital prin permiterea diverse metode de amortizare accelerată contabile care permit compnies de a deduce mai mult de costurile investiţiilor din profiturile lor, şi, prin urmare, reduce facturile fiscale.
B Există întotdeauna o mulţime de dezbatere cu privire la corectitudinea systems.Business taxa de profit, de exemplu, argenerally taxat de două ori pe paytax lor, profitul şi cota de titularii de companiile plătesc impozitul pe venit pe impozitele dividends.Income cel mai mult în ţări sunt progresive, şi sunt unul dintre modurile în care guvernele pot redistribui problemă wealth.The cu impozite progresive este aceea că oamenii marginal rata de-plata impozitului pe orice venituri suplimentare, este întotdeauna de mare, care in general descurajează atât lucrul şi de investiţiile.
Pe de altă parte, cele mai multe taxe de vânzare sunt uşor regresiv, pentru că oamenii mai săraci au nevoie să-şi petreacă o proporţie mai mare din venitul lor pe consumtion că cei bogaţi.
C mai mari rate de impozitare mai mulţi oameni sunt tentaţi să trişeze, dar există o substanţială ‘’black’’ sau ’’underground’’ economie de aproape oriunde .In Italia, de exemplu, persoane care desfăşoară activităţi independente-cont pentru mai mult de jumătate din income.Majoritatea firmelorde fimiliilor, de asemenea, au nedeclarate, part-time de locuri de muncă seara, cu mici şi întreprinderilor mici şi mijlocii de familie, pe care nimeni nu plăteşte nici un impozit sau asigurare.At naţionale la sfârşitul 1986, directorul de italian Nation Institude de Statistică a calculat mijlocul a economiei subterane .Si a adăugat 16,7% în Italia, produsul naţional brut (PNB ), figura, iar apoiItalia a susţinut că a avut alte luate Marea Britanie pentru a deveni economia cea mai mare a cincea.
D Pentru a reduce impozitului pe venit, unele empoyers da o mulţime foarte Pais angajaţi de avantaje "perks" în loc de bani impozabile, cum ar fi maşini de serviciu, de asigurări de sănătate gratuit, şi şi prânzuri de subvenţii.
2d Comprehension
Acording to the text there are the following statements TREU or FALS ?
1 Taxes can be designed both to discourage and to encourage spending.
2 The same amount of money can be taxed more then once.
3 Progressive taxes may discourage people spend more then the rich.
4 Sales taxes are unfair becouse poop people spend more then the riich.
5 The Italian government knows that about one seventh of national income ecape taxation.
6 'Loopholes' are common form of tax evasion.
7 If you pay a lot of your income into a pension fund or a life insurance policy you never have to pay tax on it.
8 A company that makes an unusually large profit during a tax year might quickly deide to spend it , for example , on a new factor or equipment.
2e Vocabulary
Find words in the text that mean the following.
1 reducing in value of a fixed asset , by charging it against profits.
2 Something that discourages the action
3 An adjective describing a tax that is proportionalli higher for people with less money
4 Spending money to buy things , rather then saving it
5 Working for yourself , being your own boss
6 A tax on incomes that pays for sickness benefit , unemployment benefit , and old-age pensions
7 Non-financial benefit or advantages of a job
8 A way to delay the payment of a tax to a later time
9 An adjective describing expenditures that can be taken away from taxable income or profits
10 A country offering very low rates to foreign businesses.
Calancea Adrian,Balan Aurel,Boestean Dorina
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