30 Questions
Which of the following is the largest source of taxes for the federal government?
Individual income tax
What is the purpose of a tax incentive?
To influence economic behavior
What is taxable income based on?
Portion of income subject to taxation
What is the purpose of withholding in income taxes?
To make it easier for taxpayers and the government
What is a tax return used for?
To report income and taxes owed to the government
According to the text, what is a tax?
A mandatory payment to a government
What is revenue according to the text?
Government income from taxes and other nontax sources
Which principle of taxation suggests that people should be taxed based on their ability to pay?
Ability-to-Pay Principle
What does the equity principle of taxation require?
People in similar situations pay a similar amount of taxes
According to the text, what is one example of the benefits-received principle of taxation?
Financing road construction and maintenance through taxes on gasoline
Which program takes the largest amount of federal spending?
Social Security
What is the purpose of the estate tax?
To tax property transferred to others on the death of the owner
What is the maximum annual income subject to FICA tax for Social Security?
$2 million
What is the main purpose of excise taxes?
To tax the production or sale of a specific good or service
Which category of programs is covered under discretionary spending in the federal budget?
Interstate highway system and transportation programs
What is the fiscal year for the federal government?
October 1 through September 30
What is the funding source for Social Security?
Payroll tax
Who prepares the President's budget?
The Office of Management and Budget (OMB)
What is a grant-in-aid in the federal budget?
Transfer payment from the federal government to state or local governments
How does government spending influence the distribution of income?
By providing income support for low-income earners
Which tax is based on the value of goods or services at the time of sale?
Sales Tax
Which tax takes a larger percentage of income from people with low income than from people with high incomes?
Regressive Tax
Which tax is based on an individual's income from all sources, including wages, interest, dividends, and tips?
Individual Income Tax
Which tax is based on the value of an individual's or a business's assets, such as real estate and automobiles?
Property Tax
Which tax places a higher percentage rate of taxation on high-income people?
Progressive Tax
Which states have no individual income tax?
Alaska, Florida, South Dakota, Texas, and Washington
What is the range of corporate income tax rates among states?
1% to 12%
Which types of taxes do most states levy?
Corporate income taxes and property taxes
Which state is not required to have a balanced budget?
Vermont
Which type of budget is subject to balanced-budget requirements?
Operating budget
Test your knowledge about FICA and Social Security with this quiz! Learn about the payments made by both employees and employers, the benefits provided by Social Security, and the specific percentages involved. Challenge yourself with questions on FICA and its encompassing social insurance programs.
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