V. Reading and comprehension

Exercise 12.

I. Read the text. Give the title to it. Define its main points and summarize them.

The issue of fairness in the U.S. tax structure has always been a major debate among politicians. The problem is that many people think that rich people do not pay any taxes; they use tax shelters to avoid them. Roger A. Freeman of the American Enterprise Institute tried to end such myths by publishing a pamphlet called "Tax Loopholes: The Legend and the Reality ". In the year of his study, there were 112 people with incomes over $200,000 who did not pay any taxes! "Ah-ha!", the critics say. But that is not the end of the story. Those 112 represented only 0.7% of Americans reporting incomes over $ 200,000, and they had good reasons for not paying. Some paid taxes in other countries and others had huge donations to charity or severe business losses. The key point was that 99.3% of taxpayers reporting incomes of more than $200,000 (15,323 people) did pay federal taxes. They paid an average of $177 161, equal to 44% of adjusted gross income and 60% of taxable income. There were 621 people who made over %1 million that year. They paid an average of $989,862 in taxes, equal to 46% of their adjusted gross and 65% of their taxable income. In short, rich people have paid a considerable share of taxes. Since then, the tax rate has been cut to a maximum of 50% of taxable income. When that happened, rich people actually paid a larger share of the tax burden. The tax cut was made in 1981. This is how Forbes reported the results of that cut:

In 1982 the top 5% of taxpayers - those earning more than $49,633 paid an average federal bite of $21,354, just $4 less than the year before. Their share of the load, however, went from 35% in 1981 to 36% in 1982, according to the foundation (Tax Foundation, Inc.)... Despite the economy (there was a recession that year), the foundation found almost 50% more millionaires; 5,512 reported income of a million or more in 1981, 8,203 in 1982. The millionaires average tax payment: $844,339.

In short, "rich" people pay a good share of the total tax burden. Today, if all earnings and income in excess of $50,000 were completely confiscated by the government, it would be enough to run the federal government for 1 week!

V. Oral practice:

Exercise 13.Speak about taxes using the chart:

Types according to the method of taxation

According to the subject of taxation

Exercise 15.

Role play the following situation:

Situation 1.Your friend has an opinion that all taxes are unfair and cannot be imposed justly. Disagree with him. Explain him the importance of taxes for the economy. Give examples.

Use phrases:you are mistaken, you don`t realize the depth of the problem, on the contrary in my opinion, to my mind, there`s no single opinion, advantages and disadvantages, I`d rather say that, in fact, there`s no doubt that, furthermore, frankly speaking, according to.

Unit 4

INSURANCE

Vocabulary

Exercise 1. Study the vocabulary:

insurance – страхування

simultaneously - одночасно

transfer – передача, перехід

loss– збиток, втрата

entity– особа, суб`єкт

insurer– страховик

insured – страхувальник

insurance rate – страховий коефіцієнт

premium – страхова премія

insurance policy – страховий поліс

insurance coverage – страхові внески

insurance benefit – страхові виплати

to charge – нараховувати, стягувати

Liability Insurance – страхування громадської відповідальності

Disability – втрата працездатності

Damage – заподіяти шкоду

аccident – нещасний випадок

afford – мати змогу

sufficiently capitalised – достатньо забезпечені капіталом

to turn - звертатися

bills -рахунки

II Reading

Exercise2. Read and translate:

Text A

Insurance

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread. Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were used by Chinese and Babylonian traders as long ago as the 3rd BC.

Insurance is now defined as the transfer of the risk of a loss, from one entity to another, in exchange for a premium. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. The concept of insurance is fairly simple — it involves paying someone (the insurance company) to take on a certain risk. When you buy an insurance policy (insurance contract), you agree to pay a premium (the cost of the insurance) to an insurer. The insurer, in turn, agrees to pay a specified amount of money in case something covered by your insurance is damaged, lost, or stolen. For example, those of us who own cars are required to carry automobile insurance. We pay the premiums, whether or not we have accidents. When we do have an accident, our insurer is responsible for paying the bills related to the accident, in whatever amount is specified in the insurance policy.

You can buy insurance to cover almost any risk — the risk that you will die, or that you will become ill and require medical attention, or that you will have a car accident etc.

When you buy insurance, there are lots of things to think about — specific risks you are actually facing, where you are in your life, how much insurance coverage you can afford to pay, and other factors. So before you get started making decisions about buying insurance, it’s helpful to know something about each of the types of insurance that are available to you.

There are several different categories of insurance:

· Life Insurance

provides an insurance benefit when the person who is insured dies

· Health Insurance

covers certain medical expenses and prescription medications

· Property Insurance

pays a benefit if your property is damaged

· Liability Insurance

provides you with insurance protection if you cause damage to someone’s health or property

· Disability Insurance

pays you income if you are unable to work

· Business insurance

any kind of insurance that protects businesses against risks.

An insurance company is usually comprised of numerous insurance agents. An insurance company can specialize in one type of insurance or offer multiple types. The financial stability and strength of an insurance company should be a major consideration when buying a policy.

The financial crisis has shown that the insurance sector is sufficiently capitalised. The vast majority of insurance companies had enough capital to absorb losses and only a small number turned to government for support.

III. Language

Exercise 3. Find in the text and put down English equivalents to the following word combinations:

Одночасно з появою людства; натуральне господарство; методи передачі та розподілу ризиків; сума, що буде стягнена ; сплата рахунків; покрити будь-який ризик; страхування громадської відповідальності; витрати на медичні послуги; страховий захист; поглинути збитки; звернулися до уряду.

Exercise 4. Fill the blanks with the suitable words:

1. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the...

(insurance benefit, premium)

2. When we do have an accident, … is responsible for paying the bills related to the accident.

(insurer, insured, policyholder)

3. … provides you with insurance protection if you cause damage to someone’s health or property

(life insurance; disability insurance; property insurance)

4. The ... of an insurance company should be a major consideration when buying a policy.

(financial stability; income; history)

5. Business insurance is any kind of insurance that protects businesses against...

(competition, taxes, risks)

Exercise 5. Make up the possible word combinations out of the following and translate them:

Insurance money financial life property liability disability

economy instruments company rate agents coverage insurance stability crisis

Exercise 6. Match the definitions to the economic terms in the left column:

Insurance premium Disability Insurance policyholder insurance policy insurer Health Insurance insurance rate Liability Insurance Life Insurance Business insurance

a). a factor used to determine the premium; b). an insurance covering certain medical expenses and prescription medications; c). the cost of the insurance; d). an insurance providing benefit when the person who is insured dies; e). transfer of the risk of a loss, from one entity to another, in exchange for a premium; f). a company selling the insurance; g). the person or entity buying the insurance; h). any kind of insurance that protects businesses against risks; i). an insurance paying you income if you are unable to work; j). an insurance providing you with insurance protection if you cause damage to someone’s health or property; k). insurance contract

IV. Text understanding

Exercise 7. Find in the text and translate a passage describing:

1. the history of insurance

2. the definition of isurance

3. categories of insurance

4. insurance sector overcoming financial crisis.

Exercise 8. Agree or disagree with the statements:

1. The money economy is a more ancient form than natural economy.

2. The concept of insurance involves paying the insurance company to take on a certain risk.

3. We pay the premiums only if we have accidents.

4. An insurance company can offer multiple types of insurance.

5. The financial stability and strength of an insurance company is not a major consideration when buying a policy.

6. The financial crisis has shown that the insurance sector suffers great losses.

7. Property Insurancepays you a benefit if you cause damage to somebody`s property

8. Our insurer is responsible for paying the bills related to the accident.

Exercise 9. Answer the questions:

1. What two types of economies in human societies do we know? Characterize them.
2. What is insurance? Define the concept.
3. What risks can you cover buying insurance?
4. What types of insurance are there? Explain the essence of each.
5. What is insurance company?
6. How does insurance sector overcome financial crisis?