B) Taxation

In the United Stales, federal, stale, and local governments cover their ex­penses mainly through taxation. Each level of government depends chiefly on one or two types of taxes. In general, local governments receive most of their lax revenue from properly taxes. State governments depend on sales tax, stale income lax and excises. The federal government's chief source of revenue is the federal income tax. Other federal taxes include the corporate profit tax and social insurance taxes.

In October 1986, the president signed into law the Tax Reform Act of 1986 —perhaps the most massive reform of the US tax system. The tax reform was aimed at improving the fairness of the federal tax system and at restoring confidence in the system by eliminating inequalities.

As elsewhere some taxpayers try lo find loopholes in legislation and evade taxes. Some others do not pay laxes or do not pay them fully because they do not understand the procedure of tax collection.

The US Internal Revenue Service try to educate taxpayers, to provide them with information to help them to comply with the tax laws. Different educa­tional programmes designed for specific groups of taxpayer have been worked

out.

C) Factors of Production

This is the collective term for the economic resources in the production system. It is these inputs that are transformed into the outpul of final goods and services. Economists group the resources into four categories.

Land is the term for all natural resources that are used in production. Raw materials are therefore taken from the stock of natural assets. The economic reward that goes to the owners of this factor of production is called rent.

Labour can be defined as the sum of all the physical and mental effort thai goes into production and includes the tasks of management. The economic return to those who supply labour is wages/salaries.

Starting a Career Text a Starting a Career

In many countries, businesses, the private sector, provide the ma­jority of jobs. But one could also make a career in government or in the not-for-profit sector.

Career is more than just a job. It is something that may include many separate jobs. People, as a rule, move from job to job during their

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Unit3

Capital is the economic term for any man-made productive asset. Il is business capital that is the faclor of production rather than personal or social capital.

Business capital refers to the physicaJ capital equipment and property of firms. The economic reward to capital is called interest.

Role-play Budget Spending on Education

Imagine that you are participating in a round-table discussion of student life problems at the Central and East European Student Society. You are asked to make some proposals about education.

Presenting your ideas you:

• stress that progress in the world depends on progress in education, higher education in particular;

• emphasise the role of the state in providing higher education. Yon are of the opinion that budget spendings on education must be increased, more grants should be provided, scholarships should be increased, more money should be spent on physical education, on improving leisure and sports facilities, facilities for scientific research of students;

• admit that non-public higher education instituiions can exist along with public ones;

• point out that strict control should be exercised over the education system (curricula, teaching staff, tuition fees).

The other participants arc supposed to comment on the ideas.

Enterprise is regarded as the coordinating factor of production. It involves both the organisation of the economic resources and an element of risk tak­ing, its reward is profit.