chap 14

Question 1

tax

Answer 1

is a mandatory payment to a government.

Question 2

revenue

Answer 2

is government income from taxes and other sources

Question 3

tax base

Answer 3

is a form of wealth—such as income, property, goods, or services—that is subject to taxes.

Question 4

individual income tax

Answer 4

is based on an individual’s income from all sources.

Question 5

corporate income tax

Answer 5

is based on a corporation’s profits

Question 6

sales tax

Answer 6

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

Question 7

property tax

Answer 7

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

Question 8

proportional taxes

Answer 8

takes the same percentage of income from all taxpayers.

Question 9

progressive taxes

Answer 9

places a higher percentage rate of taxation on high-income people.

Question 10

regressive taxes

Answer 10

takes a larger percentage of income from low-income people.

Question 11

incidence of taxes

Answer 11

is the final burden of the tax

Question 12

tax incentive

Answer 12

is the use of taxes to influence economic behavior.

Question 13

withholding

Answer 13

is money taken from pay before the worker receives it.

Question 14

taxable income

Answer 14

is the portion of income subject to taxation.

Question 15

tax return

Answer 15

is a form used to report income and taxes owed to government.

Question 16

FICA

Answer 16

is the Federal Insurance Contributions Act.

Question 17

social security

Answer 17

is a federal program to aid older citizens, children who have lost a parent, and the disabled.

Question 18

medicare

Answer 18

is a national health insurance program mainly for citizens over 65

Question 19

estate tax

Answer 19

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

Question 20

gift tax

Answer 20

is a tax on assets given by one living person to another.

Question 21

excise tax

Answer 21

is a tax on the production or sale of a specific good or service.

Question 22

customs duty

Answer 22

is a tax on goods imported into the United States.

Question 23

user fee

Answer 23

is money charged for the use of a good or service.

Question 24

mandatory spending

Answer 24

is required by law.

Question 25

discretionary spending

Answer 25

has to be authorized each year.

Question 26

entitlements

Answer 26

are social welfare programs with specific requirements.

Question 27

Medicaid

Answer 27

is a government medical insurance program for low-income people.

Question 28

federal budget

Answer 28

is a plan for spending federal tax money

Question 29

fiscal year

Answer 29

is a 12-month period for which an organization plans its expenditures.

Question 30

appropriations

Answer 30

are specific amounts of money set aside for specific purposes.

Question 31

transfer payments

Answer 31

are money distributed to individuals who do not provide anything in return.

Question 32

grant-in-aid

Answer 32

is a transfer payment from the federal government to state or local governments.

Question 33

private sector

Answer 33

is the part of the economy owned by individuals or businesses.

Question 34

balanced budget

Answer 34

requires that total government revenue is equal to total government spending.

Question 35

operating budget

Answer 35

is a plan for day-to-day expenses.

Question 36

capital budget

Answer 36

is a plan for major expenses or investments.

Question 37

tax asserssor

Answer 37

determines the value of property.