WorksheetsQuiz on Taxes
Total questions: 60
Worksheet time: 30mins
What are taxes?
Voluntary donations to the government
Mandatory payments to the government
Optional fees for public services
Charitable contributions to society
Which of the following is a purpose of taxation?
To decrease government revenue
To regulate the economy
To eliminate fiscal policy
To reduce public spending
What is one way taxes are used to redistribute income?
By increasing corporate profits
Through transfer payments
By reducing government jobs
Through private investments
Why does the government need to have money?
To provide public goods such as schools, libraries, fire and police, safe highways
To increase personal wealth of citizens
To fund private businesses
To reduce taxes for the wealthy
Which principle of taxation states that people who directly benefit from a service should pay for it?
Ability-to-pay
Benefits received
Progressive tax
Regressive tax
According to the ability-to-pay principle, who should pay more taxes?
People who use more public services
People with more wealth or income
People who live in urban areas
People who own businesses
Which of the following is an example of a tax based on the benefits received principle?
Federal Income Tax
Sales Tax
Corporate Tax
Inheritance Tax
Which characteristic of an effective tax ensures it is easily understood?
Equity
Efficiency
Simplicity
Certainty
What does the equity characteristic of a good tax ensure?
Taxes are collected quickly
Taxes are fair and balanced
Taxpayers know when to pay
Taxes are easy to understand
Which characteristic of a good tax involves collecting taxes without spending too much time or money?
Simplicity
Certainty
Equity
Efficiency
What does the certainty characteristic of a good tax provide to taxpayers?
Knowledge of tax fairness
Understanding of tax complexity
Clarity on when, how much, and where to pay
Assurance of low tax rates
Which article of the Constitution grants Congress the power to tax?
Article 1
Article 2
Article 3
Article 4
What does the 16th Amendment allow Congress to do?
Impose a sales tax
Impose an income tax
Impose a property tax
Impose a luxury tax
According to the Constitution, what must be the purpose of a tax?
To increase government revenue
To support local businesses
For the common defense and general welfare
To fund political campaigns
What is a limitation on federal taxes according to the Constitution?
They can vary by state
They must be the same in every state
They can only be imposed on imports
They can only be imposed during wartime
What is one thing the government may not tax according to the Constitution?
Imports
Exports
Income
Property
What is one way that taxes influence resource allocation?
By determining how we use our money
By influencing how we use our resources
By increasing productivity
By reducing economic growth
How do taxes affect behavior adjustment?
By influencing how we use our resources
By determining government spending
By influencing how we use our money
By increasing economic growth
What is the impact of higher taxes on productivity and growth?
Higher taxes increase growth
Higher taxes have no impact on growth
Higher taxes have a negative impact on growth
Higher taxes improve resource allocation
At which levels are taxes collected?
Federal, State, Local
National, Regional, Community
International, National, City
Global, Country, Town
Which tax provides the most income for the federal government?
Corporate Income Tax
Social Security
Individual Income Tax
Excise Taxes
What is the second largest source of income for the federal government?
Corporate Income Tax
Social Security
Excise Taxes
Customs
Which of the following is not one of the top three sources of federal income?
Individual Income Tax
Social Security
Corporate Income Tax
Estate & Gift Taxes
What is one of the top two sources of state revenue?
Property Tax
Sales Tax
Income Tax
Excise Tax
What is one of the top two sources of local revenue?
Sales Tax
Income Tax
Property Tax
Corporate Tax
Which state has the highest mean effective property tax rate on owner-occupied housing?
New Jersey
Illinois
Texas
California
What is the mean effective property tax rate for Illinois?
1.78%
2.32%
1.55%
0.68%
Which state has the lowest mean effective property tax rate?
Hawaii
Alabama
Colorado
Nevada
What is the mean effective property tax rate for Texas?
1.90%
1.80%
1.60%
1.50%
What does "Pay as you earn" taxation mean?
Income tax is collected at the end of the year.
Income tax is collected throughout the year as individuals earn income.
Income tax is only collected from businesses.
Income tax is optional for individuals.
What is tax withholding?
The process by which individuals pay taxes directly to the government.
The process by which employers take taxes out of your pay before you receive it.
The process of filing taxes at the end of the year.
The process of avoiding taxes legally.
How many income brackets are there in the progressive tax system mentioned?
4
5
6
7
What is the maximum tax rate mentioned for the tax brackets?
25%
30%
35%
40%
What is the marginal tax rate for a single filer with a taxable income of $50,000 in 2020?
10%
12%
22%
24%
For married couples filing jointly, what is the taxable income range for the 32% tax bracket in 2020?
Income over $171,050
Income over $326,600
Income over $414,700
Income over $622,050
At what income does the 37% tax rate begin for single filers in 2020?
$207,350
$518,400
$622,050
$85,525
What is the purpose of Social Security under the Federal Income Contributions Act (FICA)?
To provide health insurance for people over 65
To help in retirement
To offer unemployment benefits
To fund public education
Which federal tax helps pay for health care for people over 65 or with certain disabilities?
Social Security
Unemployment
Medicare
Property Tax
What type of tax is collected by both federal and state governments to support individuals who lost their job through no fault of their own?
Social Security
Medicare
Unemployment
Sales Tax
What is the Social Security tax rate applied to Jack's income?
7.65%
2.4%
9%
5%
How much Social Security tax does Bill pay on his income?
$3,442.50
$9,065.25
$7,500.00
$5,000.00
What percentage of Sue's income is used to pay the Social Security tax?
7.65%
2.4%
9%
5%
Mary's income is $998,000. What is the amount of Social Security tax she pays?
$3,442.50
$9,065.25
$7,500.00
$5,000.00
What type of tax is the Social Security Tax up to an income of $118,500?
Regressive
Proportional
Progressive
Flat
At what income level does the Social Security Tax become regressive?
$100,000
$118,500
$118,501
$120,000
What is a characteristic of a progressive tax structure?
Takes a larger percent of income from lower income groups
Takes a fixed percent of income from all income groups
Takes a larger percent of income from higher income groups
Takes a smaller percent of income as income increases
Which of the following is an example of a progressive tax?
Sales Tax
Property Tax
Federal Income Tax
Flat Tax
What is a regressive tax structure?
Takes a larger percent of income from the higher income group
Takes a larger percent of income from the lower income group
Takes the same percent of income from all income groups
Takes no income from any group
Which of the following is an example of a regressive tax?
Income tax
Luxury tax
Sales tax
Capital gains tax
What is the basis of a regressive tax?
Income level
Property ownership
Something other than your income
Employment status
What is a proportional tax?
A tax that increases as income increases
A tax that decreases as income increases
A tax that takes the same percent of income from all income levels
A tax that is only applied to luxury goods
What is another name for a proportional tax?
Progressive tax
Regressive tax
Flat tax
Luxury tax
Which of the following is an example of a proportional tax?
Federal income tax
State income tax
Sales tax
Proposed flat tax
What is the tax on the profit of a corporation called?
Excise Tax
Estate Tax
Corporate Income Tax
Gift Tax
Which tax is applied to the sale or production of a good?
Import Tax
Excise Tax
Property Tax
Sales Tax
What is the tax on money or property a deceased person leaves to someone?
Gift Tax
Estate Tax
Sales Tax
Import Tax
Which tax is imposed on money or property one living person gives to another?
Gift Tax
Property Tax
Corporate Income Tax
Excise Tax
What is the tax on imported goods known as?
Sales Tax
Import Tax
Estate Tax
Property Tax
Which tax is applied to goods or services purchased?
Excise Tax
Sales Tax
Gift Tax
Import Tax
What is the tax on land or buildings called?
Property Tax
Estate Tax
Corporate Income Tax
Import Tax
