Unit 2 Text Principles of taxation.

The 18th-century philosopher Adam Smith attempted to systematize the rules that should govern a rational system of taxation. In his books he set down three general canons.

I. The subjects of every state ought to contribute towards the support of the government in proportion to their respective abilities, that is, in proportion to the revenue which they respectively enjoy under the protection of the state.

II. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain the contributor, and to every other person.

III. Every tax might to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it. Although they need to be reinterpreted from time to time, these principles, especially the first, retain remarkable relevance. From the first can be derived both of the leading views of what is fair in the distribution of tax burdens among taxpayers. These are the belief that taxes should be based on the individual's ability to pay, known as the ability-to-pay principle, and the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he derives from governmental activities.

I. Arrange the words in suitable pairs.

general	abilities
tax	views
remarkable	canons
leading	haven
respective	relevance
tax	burden
benefit	system
rational	principle
retain	relevance

II. Complete the sentences by choosing suitable endings from the right-hand column

The tax which each individual is bound to pay …	is fair in the distribution of tax burdens among tax payers.
The subjects of every state ought to contribute towards …	in which it is most likely to be convenient for the contributor to pay it.
Adam Smith attempted to systematize …	the support of the government in proportion to their respective abilities.
Every tax ought to be levied at the time, or in the manner …	the rules that should govern a rational system of taxation.
From the first can be derived both of leading views of what …	ought to be certain and not arbitrary.

III. Fill in prepositions and adverbs where necessary.

1. The subjects … every state ought to contribute … the support … the government in proportion … their respective abilities.

2. … the first can be derived both … the leading views of what is fair .. the distribution of tax burdens … tax payers.

3. Every tax ought to be convenient … the contributor.

4. Although the need to be reinterpreted … time … time, these principles retain remarkable relevance.

5. The idea that there should be some equivalence … what the individual pays and the benefits he derives … governmental activities.