ECON: Taxes & Government Spending

The power to tax is granted by the United States Constitution to

• the Treasury Department.

• Congress.

• the President.

• the Supreme Court.

All of the following are characteristics of a good tax except

• economy.

• certainty.

• revenue.

• equity.

Taking taxes out of an employee’s wages before he or she receives them is called

• tax return.

• social security.

• FICA.

• withholding.

How is the federal income tax a progressive tax?

• The higher the income a person has, the higher the percentage that person pays as tax.

• A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less.

• Two married people who file their taxes together will pay more taxes than a single person will.

• Children pay no taxes, regardless of whether they earn a large income.

All of the following are examples of mandatory spending except

• defense spending.

• Medicare.

• Social Security.

• Medicaid.

An entitlement program is

• a program to provide benefits paid to everyone.

• a program to provide benefits paid to government employees only.

• a program to provide benefits to people who meet certain requirements.

• a program to provide benefits to illegal aliens.

For most state governments, the main source of revenue is a

• room tax.

• property tax.

• general excise tax.

• statewide sales tax.

The main source of revenue for local governments is

• a property tax.

• an excise tax.

• a sales tax.

• an income tax.

These are set amounts that you subtract from your gross income for yourself, your spouse, and any dependents.

• taxable income

• deductions

• exemptions

• progressive taxes

_____________ is a tax for which the percentage of income paid in taxes decreases as income increases.

• Progressive Tax

• Regressive Tax

• Proportional Tax

• Flat Tax