Understanding the U.S. Tax System

What is the purpose of taxes?

• To fund government jobs and services

• To create chaos in the country

• To reduce the income of individuals

• To increase the cost of living

What is gross pay?

• The amount after payroll taxes and deductions

• The amount before taxes are taken out

• The amount paid by the employer only

• The amount shared between the employer and employee

What is the purpose of social security tax?

• To help people when they retire

• To fund the military

• To pay for local roads

• To support the president and congress

What is the purpose of Medicare tax?

• To help people age 65 and over with medical care

• To fund federal judges

• To pay for schools and fire trucks

• To support the governor and county

What is the purpose of state and federal unemployment taxes?

• To fund government jobs and services

• To help people when they retire

• To pay for local roads

• To provide financial support for individuals who are unemployed

What is income tax?

• A tax paid by employers only

• A tax paid by individuals based on their income

• A tax paid by businesses based on their profit

• A tax paid on major purchases like cars and homes

What is property tax?

• A tax paid on major purchases like cars and homes

• A tax paid by individuals based on their income

• A tax paid by businesses based on their profit

• A tax paid based on the value of owned property

What is sales tax?

• A tax paid on major purchases like cars and homes

• A tax paid by individuals based on their income

• A tax paid by businesses based on their profit

• A tax placed on all retail sales

What is the purpose of business taxes?

• To fund government jobs and services

• To help people when they retire

• To pay for local roads

• To tax businesses based on their profit

What is the purpose of tariffs?

• To fund government jobs and services

• To help people when they retire

• To tax imports

• To pay for local roads