Topic 8: Taxes and Spending

Which type of tax takes a higher percentage of income from poorer people than from wealthier people?

• regressive

• progressive

• excise

• proportional

In a progressive tax system, which of the following statements must be true?

• People with lower incomes pay the lowest share of their income in taxes

• People with higher incomes pay the lowest share of their income in taxes

• People in the lower income groups pay the highest dollar amount in taxes

• People in all income groups pay the same amount in taxes but at different rates

"President Obama's speech on Thursday was the most important statement on counterterrorism policy since the 2001 attacks. For the first time, a president states that the state of perpetual warfare is unsustainable for a democracy and must come to an end."

The policy change discussed above would likely have the greatest impact on:

• mandatory spending.

• insurance trust revenues.

• discretionary spending.

• tax refunds.

For the system to function properly, there must be enough workers paying in to support all the retired workers receiving benefits. Although the system has worked well, changes in the U.S. population threaten to undermine it.

Which "change in the U.S. population" is the passage referring to?

• a sharp increase in the Hispanic American population

• eroding popular support for entitlement programs

• a growing share of the population is made up of retirees

• the growing number of workers who do not have taxes withheld from their paychecks

How are Social Security, Medicaid, and the unemployment insurance program related?

• All are mandatory spending programs

• All provide benefits to retired persons

• All represent forms of insurance

• All provide some form of healthcare

A significant part of federal aid to state and local governments goes toward

• supporting the armed forces stationed there

• paying their share of interest on the national debt

• funding social programs

• maintaining crime labs

Which of the following would be paid for MAINLY by local taxes?

• the building of a new army recruiting office in a town

• the maintenance of a town's sewer and water systems

• the construction of an interstate highway that passes through a city

• the addition of a science center at a local public university

What kind of tax is most likely the major source of revenue that supports firefighters?

• tariffs

• federal income taxes

• property taxes

• sales taxes

The Congress shall have Power

1. to lay and collect taxes, duties, imposts, and excises, to pay debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States

This passage from the Constitution supports which of the following statements?

• All national taxes must be devoted to providing for common defense

• A national tax may be used to benefit a particular group or interest if Congress so chooses

• No tax of any kind can exceed a certain maximum limit set by Congress

• A national tax cannot be levied at different rates in different states

Which type of tax is levied at the same percentage for people at all income levels?

• regressive

• inelastic

• progressive

• proportional