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Unit 21 :
Discussing Taxes (Part 1)
Advanced
Vocabulary
Repeat these sentences with your teacher first.
1. tax return ( phr)
the forms on which you submit your income, business details, and tax calculations to the government
2. to wrap up (phr v)
to complete something
3. to shape up (phr v)
develop or happen in a certain way
4. a heads up (phr)
a warning or message to prepare for something
5. favorable tax regime (phr)
a government or territory with low corporate tax rates
6. to levy (phr v)
to charge a tax, duty, fee, or fine
7. to cut to the chase (phr)
to start talking about the most important information rather than giving background or irrelevant information
8. ins and outs (phr)
all the details or facts of a situation
9. tax rebates (phr)
a policy that reduces how much tax you have to pay, or money you receive because you have paid too much tax
Dialogue
Read the dialogue aloud with your teacher.
Cristy
Ivana
Yeah that’s what I thought too… but can we move on to look at the tax return for Brando Equipment?
We’re on track to get that wrapped up by the 30th, right?
That’s right. I think we’re almost at the finish line. You know how Joan likes to follow recommended practices to a T on things like this.
So not there quite yet. But just wanted to update you both on how things are shaping up.
Yes, so… first off, just a heads up that we’re reporting a higher gross income than originally anticipated.
Not a bad problem to have.
Well… not as long as we can find ways to lower the tax burden. Which is what we pay you for. So I’m hoping for good news there.
Yeah, well it certainly helps to have a favorable tax regime. The most recent cut brought the effective tax rate down to 10%, so… lots to be happy about there.
And that’ll help offset the tax they’ve levied on some of that imported equipment, am I right?
Yes, that will help a bit…
Hmm… I feel there’s a “but” coming on? Regardless, can we cut to the chase and get to the headline figure.
Then you can explain all the ins and outs once we know what kind of money we’re talking about. I mean, what’s the total tax payable?
Yes, certainly… was just about to get to that. Current calculations are putting it at just under 200,000.
Wow, 200? Even with all these tax rebates? I mean, I didn’t think we’d manage a carry forward of losses into next year, but 200K? I don’t think finance anticipated this…
Article
Read the article with your teacher.
Three main types of taxes
1. Progressive taxes
This is a type of taxation where as you have more income that is subject to tax, you pay higher average rates. This mostly relates to income taxes. The term “progressive” comes from the fact that as taxable income increases, the tax rate gets progressively higher.
The federal income tax brackets are an example of progressive taxation. The federal government uses marginal tax rates, which tax income within a certain range at one rate and income in a higher range at a higher rate.
A progessive income tax may also be referred to as a graduated income tax.
2. Regressive taxes
The opposite of a progessive tax is a regressive tax. This is a method of taxation where as you have more that is subject to tax, your average tax rate is lower. One example of a regressive tax is the Social Security tax, a type of payroll tax (more on that later).
All taxpayers need to pay the Social Security tax. For 2019, income up to $132,900 is subject to the tax. The higher your income goes above that limit, the lower the average rate that you pay.
3. Proportional and flat taxes
A proportional tax is one where the amount you pay is proportional to how much you have. You will also hear people refer to this as a flat tax. For example, imagine you live in a state with a flat income tax of 5%. Each taxpayer will pay 5% of his or her taxable income. Since everyone is paying a proportional amount of their income, this is a proportional tax.
Source: https://www.policygenius.com
Discussion：
Answer the following questions to your teacher.
1. What do taxes in your country be like?
2. Does your country has a fair tax policy system?
Let’s practice
Collocations: Match the collocations in the box and then use them to complete the sentences below. (If necessary change the tense of verbs to fit the context, i.e., to past or future tense.)
A
1. Favorable
2. Carry forward of
3. To set aside
4. To report
5. To lower
6. To follow
7. Effective
8. Tax
B
Income
A tax burden
Losses
Money for taxes
Tax rate
Rebates
Recommended practices
Tax regime
C
1. In many Eastern European countries, the___________on corporations is under 10%.
2. It was not a good year for the business, but at least that means a____________to next year.
3. Of all European countries, Luxembourg is known to have one of the most ______________________.
4. This year, we are_______________from product sales and capital gains from the sale of equipment.
5. The auditor has criticized us for not_______________in the preparation of our year-end books.
6. Finance is suggesting we wait until next year to purchase new machines so we can benefit from the government’s proposed___________________on equipment.
7. If you don’t __________ every month, you’re going to be hit by a pretty big bill at the end of the year.
8. Giving to charity is a great way to__________ your ___________________and improve your reputation.
