Chapter 14: Taxation and Government Spending Quiz Review

A ________ tax structure occurs when the percentage of income paid in taxes remains the same for all income levels (i.e. 10% for all income levels).

• proportional

• regressive

• progressive

• Federal

A _________ tax structure occurs when the percentage of income paid in taxes increases as income increases (i.e. someone with an income of $50,000 may pay 15%, but someone with an income of $500,000 may pay 25%).

• progressive

• proportional

• regressive

• sales

A __________ tax structure occurs when the percentage of income paid in taxes decreases as income increases (e.g. an excise tax would take a higher percentage of a lower income person’s money).

• Federal

• regressive

• progressive

• proportional

An example of a progressive tax is the ____________. This tax is a tax on the amount of income people earn. People pay a percentage of their income in taxes. People who earn more pay a higher percentage of their income in taxes.

• Federal Income Tax

• Excise/Luxury Tax

• Sales Tax

• Property Tax

An example of a regressive tax is the:

• Federal Income Tax

• Excise/Luxury Tax

• Sales Tax

• Property Tax

____________ and ___________, are considered "regressive." Since the goods get taxed at the same percentage, those with lower incomes pay a larger percentage of their income in sales and excise taxes.

• Federal Income Tax

• Excise Tax

• Sales Tax

• Property Tax

The Federal Government relies mainly on _________ taxes for its revenue.

• income

• sales

• state

• property

State governments depend on both _______ and ______ taxes for their revenue.

• state income

• sales

• Federal income

• property

Most county and city/local governments use _______ taxes to raise their revenue.

• income

• sales

• luxury/excise

• property

All of the following are examples of mandatory (automatic) deductions EXCEPT:

• Federal Income Tax

• Medical Insurance

• State Income Tax

• Medicare & Social Security