FICA and Social Security Quiz

Play an AI-generated podcast conversation about this lesson

Which of the following is the largest source of taxes for the federal government?

Social insurance taxes

Corporate income taxes

Estate taxes

Individual income tax (correct)

What is the purpose of a tax incentive?

To influence economic behavior (correct)

To discourage economic behavior

To reduce tax burden

To increase tax revenue

What is taxable income based on?

Deductions claimed

Portion of income subject to taxation (correct)

Total earned income

Exemptions allowed

What is the purpose of withholding in income taxes?

To make it easier for taxpayers and the government Signup and view all the answers

What is a tax return used for?

To report income and taxes owed to the government Signup and view all the answers

According to the text, what is a tax?

A mandatory payment to a government Signup and view all the answers

What is revenue according to the text?

Government income from taxes and other nontax sources Signup and view all the answers

Which principle of taxation suggests that people should be taxed based on their ability to pay?

Ability-to-Pay Principle Signup and view all the answers

What does the equity principle of taxation require?

People in similar situations pay a similar amount of taxes Signup and view all the answers

According to the text, what is one example of the benefits-received principle of taxation?

Financing road construction and maintenance through taxes on gasoline Signup and view all the answers

Which program takes the largest amount of federal spending?

Social Security Signup and view all the answers

What is the purpose of the estate tax?

To tax property transferred to others on the death of the owner Signup and view all the answers

What is the maximum annual income subject to FICA tax for Social Security?

$2 million Signup and view all the answers

What is the main purpose of excise taxes?

To tax the production or sale of a specific good or service Signup and view all the answers

Which category of programs is covered under discretionary spending in the federal budget?

Interstate highway system and transportation programs Signup and view all the answers

What is the fiscal year for the federal government?

October 1 through September 30 Signup and view all the answers

What is the funding source for Social Security?

Payroll tax Signup and view all the answers

Who prepares the President's budget?

The Office of Management and Budget (OMB) Signup and view all the answers

What is a grant-in-aid in the federal budget?

Transfer payment from the federal government to state or local governments Signup and view all the answers

How does government spending influence the distribution of income?

By providing income support for low-income earners Signup and view all the answers

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

Sales Tax Signup and view all the answers

Which tax takes a larger percentage of income from people with low income than from people with high incomes?

Regressive Tax Signup and view all the answers

Which tax is based on an individual's income from all sources, including wages, interest, dividends, and tips?

Individual Income Tax Signup and view all the answers

Which tax is based on the value of an individual's or a business's assets, such as real estate and automobiles?

Property Tax Signup and view all the answers

Which tax places a higher percentage rate of taxation on high-income people?

Progressive Tax Signup and view all the answers

Which states have no individual income tax?

Alaska, Florida, South Dakota, Texas, and Washington Signup and view all the answers

What is the range of corporate income tax rates among states?

1% to 12% Signup and view all the answers

Which types of taxes do most states levy?

Corporate income taxes and property taxes Signup and view all the answers

Which state is not required to have a balanced budget?

Vermont Signup and view all the answers

Which type of budget is subject to balanced-budget requirements?

Operating budget Signup and view all the answers