Chapter 16/17

The largest source of federal revenue from taxes comes from

• income taxes.

• excise taxes.

• estate taxes.

• custom duties.

Taxes on the production, transportation, sale, or consumption of goods are _____ taxes.

• income

• corporation

• excise

• estate

Which of the following limits on the Federal Government's power to tax is implied but not stated in the Constitution?

• No tax shall be levied on articles exported from any State.

• All taxes must be used for public purposes, not private purposes.

• States shall not be taxed for their governmental activities.

• States shall pay direct taxes proportionately based on population.

The Federal Government can levy taxes on all of the following groups EXCEPT

• manufacturers.

• workers.

• churches.

• importers.

A gift tax must be paid if a person

• receives money from the estate of a deceased relative.

• receives gifts valuing more than $10,000 in any one year.

• imports certain luxury items.

The Federal Government is able to borrow money at lower interest rates than private borrowers because

• its securities are considered the safest possible investment.

• interest rates are set by Congress.

• it borrows over long periods of time.

• it borrows mostly from State governments.

The Federal Government's practice of spending more than it takes in results in

• greater dependence on regressive taxes than on progressive taxes.

• deficit financing.

• low interest rates.

• longer fiscal years.

Today, more than one in every five dollars spent by the Federal Government pays for

• interest on the national debt.

• money allocated for military equipment.

• money allocated to the various departments.

• money needed to complete the federal budget.

Although only Congress can appropriate the money that the Federal Government uses to operate, it is the (a)   who initiate(s) the spending process.

• President

• Supreme Court

• Budget Committee

• voters

Both corporate and individual income taxes are set at (a)   rates.

• high

• progressive

• regressive

• low