Taxes

Question 1

mandatory payment to a local, state, national govt.

Answer 1

tax

Question 2

govt. income from taxes and nontax sources

Answer 2

revenue

Question 3

rights of govt. to tax are set down in the ______ a

Answer 3

U.S. Constitution

Question 4

allows us to tax

Answer 4

16th amendment

Question 5

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

Answer 5

benefits-received principle of taxation

Question 6

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

Answer 6

ability-to-pay principle of taxation

Question 7

Tax systems attempt to meet three criteria

Answer 7

Equity
Simplicity
Efficiency

Question 8

of a tax is established by how uniformly the tax is applied

Ex: Everyone who buys gasoline pays the same tax

Answer 8

equity, or fairness

Question 9

of a tax is determined by how easy it is for the taxpayer to understand and how easy it is for the govt. to collect

Answer 9

simplicity

Question 10

The individual income tax best meets the criterion of

Answer 10

efficiency

Question 11

what is a tax base?

Answer 11

Govt. imposes taxes on various forms of income and wealth in order to raise the revenue to provide public goods and various other services

Question 12

form of wealth – such as income, property, good, or services – that is subject to taxes

Answer 12

tax base

Question 13

is based on an individual’s income from all sources

Answer 13

individual income tax

Question 14

is based on a corporation’s profits

Answer 14

Corporate income tax

Question 15

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

Answer 15

Sales tax

Question 16

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

Answer 16

Property tax

Question 17

pay property taxes based on the value of their buildings and the land on which buildings stand

Answer 17

Homeowners and business owners

Question 18

Property tax may also be imposed on other assets such as

Answer 18

automobiles

Question 19

takes the same percentage of income from all taxpayers

Answer 19

proportional tax

Question 20

places a higher percentage rate of taxation on high income people

Answer 20

progressive tax

Question 21

takes a larger percentage of income from low income people

Answer 21

regressive tax

Question 22

States with ______ generally charge rates from three to five percent of income

Answer 22

flat taxes

Question 23

States with flat taxes generally charge rates _______ of income

Answer 23

from three to five percent

Question 24

Cities and counties with ________ charge about one to three percent of income

Answer 24

proportional taxes

Question 25

Cities and counties with proportional taxes charge about _______ of income

Answer 25

one to three percent

Question 26

In the U.S., the federal income tax is a ________ because the tax rate increases as income increases.

Answer 26

progressive tax

Question 27

In the U.S., the _______ is a progressive tax, because the tax rate increases as income increases.

Answer 27

federal income tax

Question 28

Some taxes are ________ because they are applied to sales, not income
Although a sales-tax rate is applied equally to all items subject to the tax, the tax as a percentage of income is

Answer 28

regressive

Question 29

is the final burden of that tax

it is the impact of the tax on a taxpayer

Answer 29

incidence of a tax

Question 30

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

Answer 30

tax incentive

Question 31

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

Answer 31

Sin taxes

Question 32

The largest source of taxes for the federal govt. is the

Answer 32

individual income tax

Question 33

The govt. began using the income tax after the _________ to the Constitution which occurred in 1913

Answer 33

16th Amendment

Question 34

The govt. began using the income tax after the 16th Amendment to the Constitution which occurred in

Answer 34

1913

Question 35

are the second highest source of federal revenue

Answer 35

Social insurances taxes

Question 36

share the burden of these social insurance taxes

Answer 36

Workers and employers

Question 37

To make it easier for taxpayers and the govt.. a _______ – a tax is taken from a worker’s paycheck – is collected

Answer 37

payroll tax

Question 38

The ______ is deducted from a paycheck as a withholding or money taken from a worker’s pay before the worker receives it

Answer 38

payroll tax

Question 39

The payroll tax is deducted from a paycheck as a ______ or money taken from a worker’s pay before the worker receives it

Answer 39

withholding

Question 40

is the govt. agency that collects the money for the federal govt. and administers the federal tax system

Answer 40

IRS

Question 41

The IRS is the govt. agency that collects the money for the federal govt. and administers the

Answer 41

federal tax system

Question 42

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

Answer 42

federal income tax

Question 43

Many taxpayers take a ________ such as interest paid on a home mortgage, state and local taxes, charitable contributions, and certain portion of medical expenses

Answer 43

standard deduction or itemize deductions

Question 44

Each year, taxpayers must complete a _______ a form used to report income and taxes owed to various levels of govt.

Answer 44

tax return

Question 45

Taxes are to be filed by ________ each year

Answer 45

April 15th

Question 46

is the Federal Insurance Contributions Act, a payroll tax that provides coverage for the elderly, the unemployed due to disability, and surviving family members of wage earners who have died

Answer 46

FICA

Question 47

FICA

Answer 47

Federal Insurance Contributions Act

Question 48

FICA is also known as

Answer 48

social insurance

Question 49

FICA encompasses

Answer 49

Social Security and Welfare

Question 50

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 50

Social Security

Question 51

The employer and employee each pay ______ of the employee’s income up to an annual maximum

Answer 51

6.2%

Question 52

Introduced in 1966, _______ is a national health insurance program for citizens over 65 and certain other groups of people

Answer 52

Medicare

Question 53

Mediare - ______each pay 1.45% of employee income

Answer 53

Employers and employees

Question 54

Employers and employees each pay _______ of employee income

Answer 54

1.45%

Question 55

is a program funded by federal and state taxes and administered by the states

Answer 55

Unemployment compensation

Question 56

provides benefits for a certain period of time to employees who lose their jobs through no fault of their own

Answer 56

Unemployment

Question 57

applies to the first $7000 earned by an employee

Answer 57

Unemployment tax

Question 58

Under normal times, an individual can collect unemployment benefits for a

Answer 58

maximum of 26 weeks

Question 59

After the recession, _________ passed the emergency benefit program to extend that duration to 72 weeks

Answer 59

Congress

Question 60

After the recession, Congress passed the ________ to extend that duration to 72 weeks

Answer 60

emergency benefit program

Question 61

After the recession, Congress passed the emergency benefit program to extend that duration to

Answer 61

72 weeks

Question 62

is the third largest source of tax revenue for the federal government

Answer 62

Corporate income taxes

Question 63

deductions for investment in buildings, equipment, research, and rules that benefit multinational corporations

Answer 63

Tax breaks

Question 64

Tax breaks for corporations include:

Answer 64

deductions for investment in buildings, equipment, research, and rules that benefit multinational corporations

Question 65

are taxed at the corporate level and again at the individual level, since shareholders pay taxes on the income they receive in the form of dividends and capital gains

Answer 65

Profits

Question 66

Profits are taxed at the corporate level and again at the individual level, since shareholders pay taxes on the income they receive in the form of

Answer 66

dividends and capital gains

Question 67

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

Answer 67

estate tax

Question 68

Most estates are not subject to this tax, because the government only taxes

Answer 68

large estates

Question 69

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

Answer 69

gift tax

Question 70

In _______ the maximum amount of a gift you receive cannot be more than $14,000 per year, per individual

Answer 70

Alabama

Question 71

In Alabama, the maximum amount of a gift you receive cannot be more than

Answer 71

$14,000 per year, per individual

Question 72

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

Answer 72

excise tax

Question 73

The _______ places excise taxes on goods or services for which there is relatively inelastic demand in order to maintain a steady stream of revenue

Answer 73

government

Question 74

The government places _______ on goods or services for which there is relatively inelastic demand in order to maintain a steady stream of revenue

Answer 74

excise taxes

Question 75

is a tax on goods imported into the U.S. from another country

Answer 75

customs duty

Question 76

are basically excise taxes on imports and are also known as tariffs

Answer 76

Custom duties

Question 77

Custom duties are basically excise taxes on imports and are also known as ________

Answer 77

tariffs

Question 78

is money charged for the use of a good or service

Ex: The federal government charges entrance, parking, and camping fees to visitors to national parks

Answer 78

user fee

Question 79

The programs and services the federal govt. funds with tax revenue are divided into two categories:

Answer 79

Mandatory spending – is required by law

Discretionary spending – has to be authorized each year

Question 80

makes up well over half of all federal spending

Answer 80

Mandatory spending