Учебно-методическое пособие по обучению профессиональному общению. Коровина Н.А - 12 стр.

government organs. The modern taxation provides for tax privileges,        the supply of goods and services to consumers and/or producers,
for example, tax exemptions, untaxable minimum, tax rate reduction         which drives up prices. Inflation has sometimes been described as an
and others. It is declared to have to promote manufacturing and resi-      increasing amount of money chasing a shrinking number of goods.
dential building, development of small business, pensioners’ employ-              Inflation hits economies in transition hard because price liber-
ment and charities. Taxes have 2 functions: distributive and control.      alization – the removal of government control of prices – is an essen-
Thanks to them formation and supervision of government financial           tial step toward a market economy. The initial result of such price
resources are provided. Besides, owing to control function tax mecha-      liberalization is predictable – a wave of price increases for goods that
nism efficiency is estimated. Since 1992 many changes have been            were in chronic short supply. Why? Because the government held their
brought into the tax law. But, however, the fairness has been broken       prices artificially low, or because of other economic distortions and
more than once (for instance, amendments enacted and others). I can        inefficiencies created by government decision-makers. In addition, if
say that our tax system is rather diverse and confusing.                   people are holding large amounts of money at the time of this transi-
                                                                           tion (since there was little of value to buy), the pressure of inflation
       Answer the following questions:                                     can be even greater. Nevertheless the rewards of enduring the inevita-
       1. Why do we have to pay taxes?                                     ble bout of inflation during this transitional period are substantial.
           ● What questions are generally there in arranging taxation?     Unfettered by government, the market mechanism of supply and de-
                                                                           mand can begin function. High prices signal strong demand and the
       2. Direct and indirect taxes.
                                                                           market albeit slowly and haltingly at first, responds with increased
           ● What is the best arrangement of taxation?
                                                                           production. Peoples' money may have lost value, but what money they
       3. The modern tax system in Russia:
                                                                           have is now real and consumers can buy the goods that are beginning
           ● levels of taxes, privileges, functions, changes.
                                                                           to appear in stores. With supplies increasing, prices stabilize and
       4. What else do you know about the Russian taxation and
                                                                           queues begin to disappear as consumers realize that more and varied
changes having been brought in since 1992? What is your attitude
                                                                           products will continue to be available for sale.
towards them?
                                                                                  Entrepreneurs and investors respond to the new economic free-
       5. If I could arrange taxation, I’d…
                                                                           dom by starting new businesses and competing to provide goods and
       6. If you could avoid paying taxes, would you take advantage of
                                                                           services, thereby creating jobs, expanding supply and causing prices to
it? (To say honestly…)
                                                                           moderate further.
                                                                                  The key element in this transition is for the government to relin-
                    Inflation and the Transition                           quish its role in setting prices and permit the market forces of supply
                       to a Market Economy                                 and demand to establish prices for virtually all goods and services.
       One of the most intractable problem confronting societies in        When such a free market is established, inflation may persist, but it is
transition from centralized to free market economies is that of infla-     a far more manageable and less threatening problem than in the early,
tion. It is, however, a challenge that such societies must meet if they    hard days of economic transition.
are to enjoy the material benefits that a market economy can provide.
       What exactly is inflation? It is an increase in the average price         Questions:
level of the goods and services produced and sold in an economy. In-             1. What exactly is inflation?
flation typically occurs in a market economy for one of two reasons:             2. What is an important step towards a market economy?
either people increase their spending faster than producers are able to          3. What are disadvantages and advantages of inflation?
increase the supply of the goods and services; or there is a decrease in         4. How do entrepreneurs respond to the new economic freedom?

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