PASSAGE A sensible and fair approach would be to let the high-end tax cuts expire as scheduled, but keep the other tax cuts for another year. That would keep more cash in the hands of people most likely to spend it and prop up consumer demand while the economy is weak. It would give Congress and the administration time to undertake tax reform. Most Congressional Republicans are willing to embrace reform, but only if it is revenue neutral. There is no question that the system is overly complicated; it is also riddled with hugely costly special deals for special interests. Any reform must streamline the code, make it fairer and most important raise more revenue. Each year, the government provides $1 trillion in tax breaks. Some of the largest breaks for itemized deductions and retirement savings should be retained because they subsidize important goals, like home ownership and old-age security. Right now, wealthier taxpayers get the greatest benefit. The process needs to be reformed so that most of the help flows to those who most need it: low- and middle-income taxpayers. At the same time, super-low tax rates for investment income should be ended. Capital gains are taxed at a top rate of 15 percent, compared with a top rate for wages and salary of 35 percent. Proponents argue that the lower rate is an incentive to invest, but research shows that it also encourages gaming of the system. Tax breaks that have outlived their purpose must be ended, starting with subsidies for the oil industry, which is making billions in profits. The revenue from such reforms could be used to pay down the deficit and allow all tax rates to be lowered, improving incentives to work. The amount of revenue raised and the drop in tax rates will depend on how much tax breaks are curbed. Congress should consider raising revenues in other ways, like a value-added tax, or carbon taxes. That way all of the needed revenue for deficit reduction, and for what government provides, does not need to be squeezed from the income tax. A value-added tax is conducive to saving, and a carbon tax helps protect the environment. The public is open to new taxes, and the economic facts are clear. Until tax increases are considered in equal measure to spending cuts, there will be no budget fix.
Q.1 What is the tone of the passage?
A) Placatory
B) Advisory
C) Premonitory
D) Critical
Q.2 Which of the following can be inferred from the passage?
A) The current tax structure does not give the greatest benefit to low- and middle-income taxpayers.
B) The current tax structure aims to give the greatest benefit to low- and middle-income taxpayers.
C) Tax breaks give the greatest benefit to wealthier taxpayers.
D) The current tax structure does not give the greatest benefit to wealthier taxpayers.
Q.3 Which of the following can be inferred from the last sentence of the passage?
A) Tax increase will give Congress and the administration time to undertake tax reforms.
B) The economy can be strengthened if more importance is given to tax increases.
C) The economy can be strengthened if less importance is given to spending cuts.
D) The economy can be strengthened with equal importance given to tax increases and spending cuts.
1) B
2) A
3) D
