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Finance Flashcards

Chapter 14

What gives the U.S. government the right to collect taxes? the U.S. Constitution
Why is the federal income tax a progressive tax? A higher income pays a higher percentage in taxes.
Who pays unemployment taxes? employers
What are two reasons Medicare costs are rising? People are living longer, and medical technology is more expensive.
What are the main sources of revenue for local governments? property taxes
How do most states pay for their capital budget? through long-term borrowing or the sale of bonds
Which of the following is an example of a program for which federal and state governments share the cost? highway construction
Which of the following best describes a means-tested program? Eligibility depends on income.
What is the main source of tax revenue for local governments? property taxes
An example of discretionary spending is education.
Which of the following is an example of state spending? public safety
In most communities, the main source of funding for local public schools probably comes from local property taxes.
The U.S. government’s authority to tax comes mainly from the Constitution.
In order to keep people from giving away their money before they die, the federal government created the gift tax.
Funding for most public universities comes from state sales taxes
Which of the following best describes a means-tested program? People who are paid more get fewer benefits.
What do Social Security taxes pay for? benefits to older citizens
Why does the federal government collect income taxes throughout the year? so the government can pay for regular expenses such as rent
Which of the following is a major difference between a state’s operating budget and its capital budget? An operating budget must be balanced; a capital budget does not have to balance.
Chad’s family lives below the poverty line. Both of his parents work at low-income jobs that do not provide health insurance. Which entitlement program offers healthcare for Chad? Medicaid
Your receipt from a department store shows that you paid a 5 percent sales tax on sports equipment. What kind of tax is this? regressive tax
What is the main source of tax revenue for local governments? property taxes
What is one example of discretionary spending? education
Your aunt is a state employee. Which part of the budget does her salary come from? operating budget
Which of the following is an example of state spending? public safety
What is the main source of funding for most local public schools? local property taxes
Where does the U.S. government get its authority to tax? Constitution
The government’s power to tax is limited. Which of the following is illegal? The government collects export taxes on U.S.-made items that are sent out of the country.
What tax did the government create to keep people from giving away their money before they die? gift tax
What is the biggest category of federal discretionary spending? defense

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