Ch 14 Section Quiz

Why does the federal government collect income taxes in installments rather than waiting until the end of the year? It is more convenient for the government and taxpayers to collect in installments
What happens to the percentage of an income that is taxed when income rises and the tax is a proportional one? The percentage of tax stays the same
Approximately what percentage of the national budget is spent on defense? 15%
What is a “means-tested” program? one for which those with higher incomes receive lower benefits or no benefits at all
What is the difference between and estate tax and a gift tax An estate tax is a tax on the money and property of someone who has died; a gift tax is a tax on money or property given from one living person to another
What gives the U.S government the right to collect taxes? The US Constitution
What is the major source of revenue for most state governments? Sales & individual income taxes
For which expense do state governments provide financial help to their local governments? public school systems
Why are Social Security and Medicare spending expected to increase further in the near future? The baby boomer generation will qualify for both programs
What is the main purpose of federal taxes on tobacco and alcohol products? to discourage the use of these products
How do most states finance their capital budget?
On which of the following goods or services might a tax increase be hardest to pass on to consumers? automatic car washes
What is the reason the government has only limited control of its spending? When criteria have been set for a program there is no control of how many people will qualify
How is the federal income tax a progressive tax? The higher income a person has, the higher the percentage that person pays in taxes
How does the concept of a balanced budget apply to state government Only the operating budget must be balanced
What is the largest category of federal spending? Social Security
What determines the incidence of a tax? The elasticity of demand of the product taxed
How much of the federal government’s income comes from individual income tax? 47%
How would you describe a tax that assessed according to the benefits-received principle ? Those who receive the benefits the tax provides are the people who pay the tax
What is the difference between Medicare and Medicaid? Medicare is for people over the age of 65, whereas Medicaid is for low income families
What does the “equity” of a tax mean? The tax is fairly assessed
What are the main sources of revenue for local governments? property taxes

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