Taxes and Government Spending

Question 1

Tax

Answer 1

A required payment to a local, state, or national government

Question 2

Revenue

Answer 2

Income received by a government from taxes and other nontax sources

Question 3

Progressive Tax

Answer 3

Tax for which the percentage of income paid in taxes increases as income increases

Question 4

Proportional Tax

Answer 4

Tax for which the percentage of income paid in taxes remains the same at all income levels

Question 5

Regressive Tax

Answer 5

Tax for which the percentage of income paid in taxes decreases as income increases

Question 6

Individual Income Tax

Answer 6

Tax based on a person’s earnings

Question 7

Corporate Income Tax

Answer 7

Tax based on a company’s earning

Question 8

Property Tax

Answer 8

Tax based on real estate and other property

Question 9

Sales Tax

Answer 9

Tax based on goods or services that are sold

Question 10

Incidence of a Tax

Answer 10

The final burden of a tax

Question 11

Withholding

Answer 11

Taking tax payments out of an employee’s pay before he or she receives it

Question 12

Tax Return

Answer 12

Form used to file income tax

Question 13

Taxable Income

Answer 13

Earnings in which tax must be paid; total income minus exemptions deductions

Question 14

Personal Exemptions

Answer 14

A set amount that taxpayers may subtract from their gross income for themselves, their spouse, and any dependents

Question 15

Tax Deduction

Answer 15

A variable amount that taxpayers may subtract from their gross income

Question 16

Tax Credit

Answer 16

A variable amount that taxpayers may subtract from the total amount of their income tax

Question 17

Estate Tax

Answer 17

A tax on the total value of the money and property of a person who has died

Question 18

Gift Tax

Answer 18

A tax on the money or property that one living person gives to another

Question 19

Tariff

Answer 19

A tax on imported goods

Question 20

Tax Incentive

Answer 20

The use of taxation to discourage or encourage certain types of behavior

Question 21

Mandatory Spending

Answer 21

Spending that Congress is required by existing law to do

Question 22

Discretionary Spending

Answer 22

Spending about which Congress is free to make choices

Question 23

Entitlement

Answer 23

Social welfare program that people are “entitled to” benefit from if they meet certain eligibility requirements’

Question 24

Budget

Answer 24

An estimate of future revenue and expenses

Question 25

Operating Budget

Answer 25

Budget for day-to-day spending needs

Question 26

Capital Budget

Answer 26

Budget for spending on major investments

Question 27

Balanced Budget

Answer 27

Budget in which revenue and spending are equal

Question 28

Tax Exempt

Answer 28

Not subject to taxes

Question 29

Tax Assessor

Answer 29

Official who determines the value of property

Question 30

Deductions

Answer 30

Variable amounts that you can subtract or deduct from your gross income

Question 31

FICA (Federal Insurance Contributions Act)

Answer 31

Taxes that fund Social Security and Medicare

Question 32

Social Security

Answer 32

Old-age, survivors and disability insurance established in 1935 to ease the hardships of the Great Depression

Question 33

Medicare

Answer 33

National health insurance program that helps pay for health care for people over age 65 or with certain disabilities

Question 34

Medicaid

Answer 34

Entitlement program that benefits low-income families, some people with disabilities, and elderly people in nursing homes