TEXT F

　　First read the question.
　　32. The writer of the passage mainly intends to ___.
　　A. criticize Germany’s tax system
　　B. help companies ease their tax burden
　　C. examine the current corporate tax rates
　　D. propose ways to reform the tax system

　　Now go through TEXT F quickly to answer question 32.
　　One major reason for Germany’s high unemployment and the evident weakness o f business investment is the nature of the tax system, which tends to discourage both individual effort and investment. Nominal corporate tax rates are, in fact , very high and it is these rates that potential investors primarily look at. Ho wever, the actual burden borne by companies is not as great as it might seem, be cause the tax base is fairly narrow. This combination in itself tend to encourag e tax avoidance at both the personal and corporate levels. Moreover, by internat ional standards, firms in Germany are still taxed quite heavily.
　　A reform of corporate taxation, therefore, should start by, reducing tax r ates, cutting subsidies and broadening the taxable base. The resulting positive impact on growth would be reinforced if there were also a substantial easing of the net burden.
　　How do the current plans for a reform of corporate taxation measure up to these goals? The overall tax burden on companies is to be brought down significa ntly, with the ceiling of 35 % being set. To this end, a dramatic reduction in t he corporate tax on retained earnings is planned. The related drop in revenues i s to be offset by changes in the rules governing tax breaks.
　　An approach incorporating these basic features would be a welcome step. I f realized in its presents form, it should ensure that the objective of making t ax rates more attractive for businesses is achieved. At the same time, however, it would be unfortunate if an excessive broadening of the taxable base made it i mpossible to attain the equally important goal of providing relief.
　　Comprehensive tax reform is needed in Germany to spur investment and to cre ate new jobs, thus putting the economy on a higher growth path. The drop in reve nues caused by the tax relief granted to both companies and households would, in time, be at least partially offset by the larger volume of tax receipts produce d by economic growth. The gaps that remained should primarily be closed through spending cuts. If measure of this sort proved inadequate, then, as a last resort , an increase in indirect taxes could perhaps be considered.