Federal and State Taxes Test Review

Front

Which of the following is a type of federal tax? State Income Tax, Federal Income Tax, Local Sales Tax, Municipal Property Tax

Back

Federal Income Tax

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DOK Level 2: Skill/Concept

Front

What is the primary function of federal excise taxes?

Back

To reduce consumption of certain goods

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DOK Level 2: Skill/Concept

Front

How does a tax deduction differ from a tax credit?

Back

A deduction reduces the amount of income subject to tax, while a credit reduces the tax owed.

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DOK Level 2: Skill/Concept

Front

What is the purpose of progressive tax rates in the federal income tax system?

Back

To ensure that higher-income earners pay a higher percentage of their income

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DOK Level 2: Skill/Concept

Front

What is the Child Tax Credit primarily designed to do?

Back

Provide financial relief to families with children

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DOK Level 2: Skill/Concept

Front

What does the term "tax bracket" refer to?

Back

The division of income levels that are taxed at different rates

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DOK Level 2: Skill/Concept

Front

Which of the following best describes estate taxes? Options: Taxes on the sale of real estate, Taxes on income earned from property rentals, Taxes levied on the value of an estate upon the owner's death, Taxes on gifts received during the owner's lifetime

Back

Taxes levied on the value of an estate upon the owner's death

Tags

DOK Level 2: Skill/Concept

Front

What role do tax deductions play in the federal tax system?

Back

They reduce a taxpayer's taxable income.

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DOK Level 2: Skill/Concept

Front

How do federal taxes contribute to public goods and services?

Back

By funding a variety of government programs and services

Tags

DOK Level 2: Skill/Concept

Front

Which type of tax is characterized by a decreasing percentage as the income increases? A) Proportional tax, B) Progressive tax, C) Regressive tax, D) Corporate income tax

Back

Regressive tax