Lesson 1: Understanding Taxes
This branch of government was given the power to tax in Article I of the Constitution.
What is Congress?
This is the amount of a person's gross (total) income, minus exemptions and deductions.
What is taxable income?
This is the largest portion of the discretionary budget.
What is national defense?
Most states cannot run spending deficits like the federal government does because their laws require these.
What are balanced budgets?
This is an amount held back from a person's paycheck for taxes.
What is a withholding?
This means the more income you make, the higher the percentage of your income you will pay in taxes.
What is progressive taxation?
Social Security and Medicare are both funded by this tax.
What is FICA (Federal Insurance Contributions Act)?
The future of this program is in doubt because people are living longer and more people qualify to receive benefits from it than in the past.
What is Social Security?
The largest portion of state budgets goes to this.
What is education?
This is the term to describe money brought in by governments.
What is revenue?
Sales tax is an example of this type of tax.
What is a regressive tax?
This type of tax is paid on the property of a person who has died.
What is an estate tax?
Besides those 62 and over, these 2 groups also receive Social Security payments.
Who are the disabled and survivors?
The largest portion of state revenue comes from this source.
What is the federal government?
This is the term to describe programs like Social Security, Medicare, and Medicaid.
What are entitlements?
Along with simplicity and efficiency, these are the other two characteristics of a good tax.
What are certainty and equity?
This type of tax applies to the manufacture of goods like alcohol and cigarettes.
What is an excise tax (sin tax also acceptable)?
The cost of this program, the largest source of healthcare for our poor, is funded by both the federal and state governments.
What is Medicaid?
The biggest source of revenue for local governments comes from these.
What are property taxes?
States have these to pay for investments in the future of a state like a new bridge.
What are capital budgets?
Goods with inelastic demand will see the burden of a tax fall on this group of people.
Who are the buyers?
Employers pay these taxes for their employees.
What are unemployment taxes?
This is the official name for the program we more commonly call Food Stamps.
What is the Supplemental Nutrition Assistance Program?
This means that nonprofit organizations like churches and charities do not have to pay taxes to the government.
What is tax exempt?
This is a tax on imported goods.
What is a tariff?