Taxes

Question 1

The _______ is a tax on money or property given by one living person to another

Answer 1

gift tax

Question 2

The _______ of a tax is determined by how easy it is for the taxpayer to understand and how easy it is for the government to collect

Answer 2

simplicity

Question 3

A _________ takes a larger percentage of income from low income people

Answer 3

regressive tax

Question 4

A ______ is a form of wealth–such as income, property, goods, or services–that is subject to taxes

Answer 4

tax base

Question 5

__________ is based on the value of goods or services at the time of sale

Answer 5

Sales tax

Question 6

The _______________ of taxation holds people who benefit directly from public goods should pay for them in proportion to the amount of benefits received

Answer 6

benefits-received principle

Question 7

Individual _________ is based on an individual’s income from all sources

Answer 7

income tax

Question 8

________ is based on the value of an individual’s or business’s assets

Answer 8

Property tax

Question 9

_________ is government income from taxes and nontax sources

Answer 9

Revenue

Question 10

_________________, a payroll tax that provides coverage for the elderly, the unemployed due to disability, and surviving family members of wage earnings who have died

Answer 10

FICA is the Federal Insurance Contributions Act

Question 11

Tax system attempts to meet 3 criteria:

Answer 11

Equity
SImplicity
Efficiency

Question 12

The _________ of a tax can be judged by how well the tax achieves the goal of raising revenue for the government with the least cost in terms of administration

Answer 12

efficiency

Question 13

___________ is based on a corporation’s profits

Answer 13

Corporate income tax

Question 14

The _____, or fairness, of a tax is established by how uniformly the tax is applied

Answer 14

equity

Question 15

The ______________ of taxation holds that people should be taxed on their ability to pay, no matter the level of benefits they receive

Answer 15

ability-to-pay principle

Question 16

A ________ takes the same percentage of income from all taxpayers

Answer 16

proportional tax

Question 17

A _________ is the use of taxes to encourage or discourage certain economic behaviors

Answer 17

tax incentive

Question 18

States with _______ generally change rates from three to five percent of income

Answer 18

flat taxes

Question 19

The _______ is a progressive tax based on the ability-to-pay principle of taxation

Answer 19

federal income tax

Question 20

The ________ is a tax on goods imported into the US from another country

Answer 20

customs duty

Question 21

In the US, the federal income tax is a ________, because the tax rate increases as income increases

Answer 21

progressive tax

Question 22

The ______ is a tax on property that is transferred to others on the death of an owner

Answer 22

estate tax

Question 23

The federal govt. influences the economy in three ways:

Answer 23

Resource allocation
Income distribution
Competition with the private sector

Question 24

The _________ of a tax is the final burden of that tax

Answer 24

incidence

Question 25

_________ are often imposed on products or activities considered to be unhealthful or damaging to society such as gambling, alcohol, and cigarettes

Answer 25

Sin taxes

Question 26

Each year, taxpayers must complete a ______, a form used to report income and taxes owed to various levels of government

Answer 26

tax return

Question 27

A _________ places a higher percentage rate of taxation on high income people

Answer 27

progressive tax

Question 28

_________ is a federal program to aid older citizens who have retired, children who have lost a parent, or both parents, and people with disabilities

Answer 28

Social Security

Question 29

A ____ is a mandatory payment to a local, state, or national government.

Answer 29

tax

Question 30

The _______ is a tax on the production or sale of a specific product, such as gasoline or telephone service

Answer 30

excise tax

Question 31

Cities and countries with ________ charge about one to three percent

Answer 31

proportional taxes

Question 32

________, by which the govt. buys goods and services that it needs to operate, such as military equipment and office supplies

Answer 32

Direct spending

Question 33

A _______ is a transfer payment from the federal govt. to state or local govt.’s

Answer 33

grant-in-aid

Question 34

________ are money distributed to individuals who do not prove anything in return

Answer 34

Transfer payments

Question 35

________ are specific amounts of money set aside for specific purposes

Answer 35

Appropriations

Question 36

The President’s budget is prepared by the ____________

Answer 36

Office of Management and Budget

Question 37

The federal govt.’s fiscal year runs from __________

Answer 37

Oct. 1st through Sept. 30th

Question 38

The _________provides funds for about 26 million low-income people to purchase food

Answer 38

Food Stamp program

Question 39

______ is a joint federal-state medical insurance program for low-income people.

Answer 39

Medicaid

Question 40

__________ include health care coverage and disability payments for service-related illness or injury

Answer 40

Veterans’ benefits

Question 41

The _____ is money charged for the use of a good or service

Answer 41

user fee

Question 42

The programs and services the federal government funds with tax revenue are divided into 2 categories:

Answer 42

Mandatory spending- is required by law

Discretionary spending- has to be authorized each year

Question 43

The ___________ program takes the largest amount of federal spending

Answer 43

Social Security