Questions and Answers
What do FICA taxes fund?
Funds social security and Medicare.
Who bears the most burden of a sales tax?
Consumer.
What are the reasons the federal government collects income taxes as a person earns?
So that the government can pay bills as they come due.
What is the difference between an operating budget and a capital budget?
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What is an entitlement?
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What do Social Security taxes pay for?
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What is the major source of tax revenue for local governments?
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Study Notes
FICA Taxes
- Fund Social Security and Medicare, crucial for supporting retirees and healthcare for the elderly.
Sales Tax Burden
- The primary burden of a sales tax is borne by consumers, impacting purchasing behavior.
Federal Income Tax Collection
- Federal government collects income taxes progressively as individuals earn to manage cash flow and meet ongoing financial obligations.
Operating vs. Capital Budgets
- Operating budgets are allocated for daily operational expenses, while capital budgets focus on long-term investments and major expenditures.
Entitlements
- Entitlement programs are social welfare initiatives that individuals qualify for upon meeting specified eligibility criteria, ensuring support to eligible populations.
Social Security Taxes
- Collected funds support benefits for elderly citizens, surviving family members of wage earners, and individuals with certain disabilities.
Local Government Revenue
- Property taxes serve as the major source of revenue for local governments, funding essential services and infrastructure.
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Description
Test your knowledge on key concepts from Finance Chapter 14. This quiz covers topics such as FICA taxes, sales tax burdens, and the differences between operating and capital budgets. Perfect for reviewing important financial principles!
