Taxes : 4/13/16

Question 1

A ___ is a mandatory payment to a local, state, or national government.

Answer 1

Tax

Question 2

R_______ is government income from taxes and nontax sources.

Answer 2

Revenue

Question 3

The rights of the government to tax are set down in the ____ c_________ and in s_____ constitutions.

Answer 3

U.S. Constitutions, state

Question 4

The b______-r_____ p______ of t_______ holds people who benefit directly from public goods should pay for them in proportion to the amount of benefits received.

Answer 4

Benefit-received principle of taxation

Question 5

The a______-__-___ p_______ of t_______ holds that people should be taxed on their ability to pay to matter the level of benefits they receive.

Answer 5

Ability-to-pay principle of taxation

Question 6

Tax systems attempt to meet three criteria. : E_____, s______, and e_______.

Answer 6

Equity, simplicity, efficiency

Question 7

The e____, or f______, of a tax is established by how uniformly the tax is applied. Ex : Everyone who buys gasoline pays the same tax.

Answer 7

Equity, fairness

Question 8

The s________ of a tax is determined by how easy it is for the taxpayer to understand and how easy it is for the government to collect.

Answer 8

Simplicity

Question 9

The individual income tax best meets the criterion of e________.

Answer 9

Efficiency

Question 10

Government imposes taxes on various forms of i_____ and w_____ in order to raise the r_____ to provide public goods and various other services.

Answer 10

Income, wealth, revenue

Question 11

A t__ b___ is a form of wealth– such as income, property, goods, or services– that is subject to taxes.

Answer 11

Tax base

Question 12

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

Answer 12

Individual income tax

Question 13

C________ i_____ t__ is based on a corporation’s profits.

Answer 13

Corporate income tax

Question 14

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

Answer 14

Sales tax

Question 15

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

Answer 15

Property tax

Question 16

Homeowners and business owners pay p______ t____ based on the v_____ of their buildings and the l___ on which the buildings stand.

Answer 16

Property taxes, value, land

Question 17

P______ t___may also be imposed on other assets such as a_________.

Answer 17

Property tax, autombiles

Question 18

A p_________ t__ takes the same percentage of income from all taxpayers.

Answer 18

Proportional tax

Question 19

A p________ t__ places a higher percentage rate of taxation on high income people.

Answer 19

Progressive tax

Question 20

A r_________ t__ takes a larger percentage of income from low income people.

Answer 20

Regressive tax

Question 21

States with f___ t____ generally charge rates from _____ to ____ percent of income.

Answer 21

Flat taxes, three to five

Question 22

Cities and counties with p_________ t____ charge about ___ to ____ percent of income.

Answer 22

Proportional taxes, one, three

Question 23

In the US, the federal income tax is a p_________ t__, because the tax rate increases as income increases.

Answer 23

Progressive tax

Question 24

Some taxes are r______ because they are applied to s___, not i____. : Ex : Although a sales-tax rate is applied equally to all items subject to the tax, the tax as a percentage of income is regressive.

Answer 24

Regressive, sales, income

Question 25

The i_______ of a t__ is the final burden of that tax. In other words, it is the impact of the tax on a taxpayer.

Answer 25

Incidence of a tax

Question 26

A t__ i_______ is the use of taxes to encourage or discourage certain economic behaviors.

Answer 26

Tax incentive

Question 27

S__ t____ are often imposed on products or activities considered to be unhealthful or damaging to society, such as gambling, alcohol, or cigarettes.

Answer 27

Sin taxes

Question 28

The largest source of taxes for the federal government is the i________ i____ t__.

Answer 28

Individual income tax

Question 29

The government began using the income tax after the __th Amendment to the Constitution which occurred in ___.

Answer 29

16, 1913

Question 30

S______ i______ t____ are the second highest source of federal revenue. : Workers and employers share the burden of these taxes.

Answer 30

Social insurance taxes

Question 31

To make it easier for taxpayers and the government, a p_____ t__-- a tax taken from a worker’s paycheck-- is collected.

Answer 31

Payroll tax

Question 32

The p_____ t__ is deducted from a paycheck as a withholding, or money taken from a worker’s pay before the worker receives it.

Answer 32

Payroll tax

Question 33

The ___ is the government agency that collects the money for the federal government and administers the federal tax system.

Answer 33

IRS

Question 34

The federal income tax is a p_______ tax based on the a_____-__-___ principle of taxation.

Answer 34

Progressive, ability-to-pay

Question 35

Many taxpayers take a s_______ d______ or i_____ d________, such as interest paid on a home mortgage, state and local taxes, charitable contributions, and certain portion of medical expenses.

Answer 35

Standard deductions, itemize deductions

Question 36

Each year, taxpayers must complete a t__ r___, a form used to report income and taxes owed to various levels of government.

Answer 36

Tax return

Question 37

Taxes are to be filed by A____ __th each year.

Answer 37

April 15th

Question 38

_____ is the F______ I________ C__________ A__, a payroll tax that provides coverage for the elderly, the unemployed due to disability, and surviving family members of wage earners who have died.

Answer 38

FICA, Federal Insurance Contributions Act

Question 39

F____ is also known as s_____ i_______.

Answer 39

FICA, Social insurance

Question 40

F___ encompasses S_____ S_______ and M_______.

Answer 40

FICA, Social Security, Medicare

Question 41

S______ S________ is a federal program to aid other citizens who have retired, children who have lost a parent or both parents, and people with disabilities.

Answer 41

Social Security

Question 42

Social Security : The employer and employee each pay ___% of the employee’s income up to an annual maximum.

Answer 42

6.2

Question 43

Introduced in 1966, M______ is a national health insurance program for citizens over __ and certain other groups of people.

Answer 43

Medicare, 65

Question 44

Medicare : Employers and employees each pay ____% of employee income.

Answer 44

1.45

Question 45

U____________ c_________is a program funded by federal and state taxes and administered by the states.

Answer 45

Unemployment compensation

Question 46

U____________ provides benefits for a certain period of time to employees who lose their jobs through no fault of their own.

Answer 46

Unemployment

Question 47

U_____________ t__ applies to the first $_____ earned by an employee.

Answer 47

Unemployment tax $7000

Question 48

Under normal times, an individual can collect unemployment benefits for a maximum of __ weeks. After the recession, Congress passed the emergency benefit program to extend that duration to __ weeks.

Answer 48

26, 72

Question 49

C_________ i______ t____ is the third largest source of tax revenue for the federal government.

Answer 49

Corporate income taxes

Question 50

T__ b_____ for corporations include : deductions for investment in buildings, equipment, research, and rule that benefit multinational corporations.

Answer 50

Tax breaks

Question 51

P_____ are taxed at the c________ level and again at the i_______ level, since shareholders pay taxes on the income they receive in the form of dividends and capital gains.

Answer 51

Profits, corporate, individual

Question 52

The e_____ t__ is a tax on property that is transferred to others on the death of the owner. Most estates are not subject to this tax, because the government only taxes l____ estates.

Answer 52

Estate tax, large

Question 53

The g___ t___ is on money or property given by one living person to another.

Answer 53

Gift tax

Question 54

In Alabama, the maximum amount of a gift you receive cannot be more than $______ per year, per individual.

Answer 54

$14,000

Question 55

The e_____ t__ is a tax on the production or sale of a specific product, such as gasoline or telephone service.

Answer 55

Excise tax

Question 56

The government places e_____ t____ on goods or services for which there is a relatively i______ demand in order to maintain a steady stream of revenue.

Answer 56

Excise taxes, inelastic

Question 57

The c_______ d___ is a tax on goods imported into the United States from another country.

Answer 57

Customs duty

Question 58

C______ d______ are basically excise taxes on imports and are also known as t____.

Answer 58

Customs duties, tariffs

Question 59

The u____ f___ is money charged for the use of a good or service. The federal government charges entrance, parking, and camping fees to visitors to national parks.

Answer 59

User fee

Question 60

The programs and services the federal government funds with tax revenue are divided into two categories. : 1. M________ s_______-- is required by law. 2. D___________ s_______-- has to be authorized each year.

Answer 60

Mandatory spending, discretionary spending

Question 61

M_______ s_______ makes up well over half of all f_______ spending.

Answer 61

Mandatory spending, federal

Question 62

Most of this spending is in the form of e_________, which are social welfare programs with specific requirements.

Answer 62

Entitlements

Question 63

Many of these programs are not “m_____ t______” (meaning certain conditions have been met to receive the benefit).

Answer 63

Means tested

Question 64

The S______ S______ program takes the largest amount of federal spending.

Answer 64

Social Security

Question 65

Workers must have worked for a certain period of time before they are eligible to receive full benefits under the program which is __ years in the United States.

Answer 65

10

Question 66

To help control costs, the government has gradually raised the age of f___ r_________.

Answer 66

Full retirement

Question 67

The M_______ program was introduced in 1966 as an additional old-age benefit under Social Security.

Answer 67

Medicare

Question 68

M_______ is a joint federal-state medical insurance program for low-income people.

Answer 68

Medicaid

Question 69

The federal government funds about __% of the costs of the program, and the states pay about __%.

Answer 69

63, 37

Question 70

The F___ S____ program provides funds for about __ million low-income people to purchase food.

Answer 70

Food Stamp, 26

Question 71

V_______ b______ include health care coverage and disability payments for service-related illness or injury.

Answer 71

Veteran's benefits

Question 72

The largest discretionary expenditure category is n_______ d______ which takes up about __% of the total discretionary budget.

Answer 72

National defense, 50

Question 73

H_________ s________-- border protection and the enforcement of some immigration laws falls into mandatory expenditures category.

Answer 73

Homeland security

Question 74

The f_______ b_____ is a plan for spending federal tax money.

Answer 74

Federal budget

Question 75

The budget is prepared for a f_____ y___ a 12 month period for which an organization plans its expenditures.

Answer 75

Fiscal year

Question 76

The federal government’s fiscal year runs from O_____ __ through S_______ __th.

Answer 76

October 1, September 30

Question 77

The President’s budget is prepared by the O___ of M___________ and B_____.

Answer 77

Office of Management and Budget

Question 78

A___________ are specific amounts of money set aside for specific purposes.

Answer 78

Appropriations

Question 79

D_____ s______, by which the government buys goods and services that it needs to operate, such as military equipment and office supplies.

Answer 79

Direct spending

Question 80

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

Answer 80

Transfer payments

Question 81

A g____-__-___ is a transfer payment from the federal government to state or local governments.

Answer 81

Grant-in-aid

Question 82

The federal government influences the economy in three ways. : 1. R_______ a_______. 2. I______ r_________. 3. C_________ with the p_____ s_____.

Answer 82

Resource allocation, income redistribution, competition with the private sector

Question 83

The p_____ s_____ is the part of the economy owned by individuals or businesses.

Answer 83

Private sector