III. Complete the sentences with suitable words from the box

agglomeration; to make feasible; to impose equal rates; economic theory; to stamp out; to bunch together; to obtain service; common taxes; capital income

1. Commission's efforts … "unfair" tax competition ran into opposition, notably from Britain.

2. It has suggested that capital benefits from … : in other words, a cluster of capital in the same place is very useful.

3. When companies … , … , strengthening infrastructure and sharing knowledge all become easier.

4. Countries must be integrated enough … agglomeration ….

5. … would ensure that the entrepreneur's decision rests only upon factors that are central to his company's prospects.

6. The system of tax harmonisation is based on the … .

7. A recent research suggests that imposing … on … would do all of the EU's member countries more harm than good.

IV. Fill in the blanks with articles if needed

Taxation is one of … hot topics at the EU summits. … European Commission's efforts to stamp out "unfair" tax competition ran into … opposition, notably from Britain. But it turns out that this might have been for … best. … recent research suggests that imposing common taxes on capital income would do all of … EU's member countries more harm than good.

The system of tax harmonisation is based on … economic theory. If … entrepreneur is trying to decide where to start … company, … tax rate he pays on capital income will be one of … factors he has to consider. It might influence his return on … investment.

V. Fill in the blanks with suitable prepositions

Average tax rates were indeed 12 percentage points higher … the core than … the periphery in 1965, just eight years … the Treaty of Rome. Integration then deepened and capital became more mobile, yet countries did not race … the bottom. Quite the reverse: tax rates rose … both the core and the periphery. The gap between their average tax rates also grew. It peaked … 16 percentage points … 1978, the year before the European Monetary System came … force. As integration deepened over the following two decades, the tax gap narrowed steadily. By the 1990s, it had shrunk … seven percentage points.

VI. Give Russian equivalents for the following words and phrases used in the text

tax competition; capital income; return on investment; a cluster of capital; the trend in tax differences; growth in information technology; falling transport costs; public spending.

VII. Translate into Russian the following sentences from the text

1. In the EU, so the traditional argument goes, allowing tax rates to vary across jurisdictions would distort the entrepreneur's choice of location.

2. Such a "race to the bottom", the argument continues, would result in tax rates that are too low from a "social" standpoint.

3.This argument hangs on some weighty assumptions.

4. As integration deepened over the following two decades, the tax gap narrowed steadily.

5. Come the moment when capital becomes fully mobile around the world, tax harmonisation may have its day.