Standard 2: Taxes

The division of the United States Treasury that is charged with the responsibility of maintaining confidence in and managing the federal tax system is called the

• Congress.

• Internal Revenue Service.

• President.

• Department of Justice.

Although people in the United States are required to pay taxes, our tax system depends on a principle called

• moral virtue.

• ethics.

• voluntary compliance.

• civic duty.

If you make an honest, accidental mistake when filing your taxes, you

• can be tried in court and fined.

• will never have any fine or penalty for the mistake.

• may have a fine or penalty for the mistake.

• may be tried in court, and, if found guilty, jailed.

While many Americans complain about taxes, most people in the United States

• fail to pay their personal income taxes each year.

• pay a lot of money to figure out ways to get out of paying taxes.

• cheat on their income taxes, leaving others to pay more than their share of taxes each year.

• believe it is their civic duty to pay their taxes and be honest with the government.

Which of the following statements is TRUE?

• Individuals do not have to pay taxes if they believe it is a violation of their religious beliefs.

• Everyone who receives a paycheck is required to submit a tax return to the IRS by April 15.

• Taxes paid provide services that impact only quality of life in the United States, not the standard of living.

• Many people are able to cheat the government and avoid paying taxes by using phony deductions or failing to report their income appropriately.

Which of the following is an example of public goods or services paid for by taxes?

• Shopping Malls

• Resturaunts

• Churches

• Roads and Highways

If people in Group A are taxed MORE than people in Group B, it may

• increase Group A’s incentive to earn more money.

• increase the Group B’s incentive to earn more money.

• have no effect on either group’s incentive to earn more money.

• decrease Group A’s incentive to earn more money.

A “free rider” is defined as a

• person who sneaks onto trains without paying taxes.

• person who benefits from services without paying for them.

• person who pays extra tax so someone else does not have to pay.

• voucher that poor people receive to help them with transportation costs.

Which of the following taxes is regressive?

• sales tax

• Federal income tax

• Oklahoma state income tax

• a tax where the amount paid depends on income

A tax paid on certain goods and services at the point in time they are purchased is

• a progressive tax.

• a sales tax.

• an income tax.

• a fair tax.