econ

Question 1

a charge usually of money imposed by authority (government) on persons or property for public purposes.

Answer 1

Tax

Question 2

There are three categories of taxes :

Answer 2

1. Income: payroll, investment, capital gains, etc
2. Property: real estate, estate (death)
3. Goods/Services: sales, excise (gas), Sin (Tobacco, alcohol), User fees (Airline tickets, rental cars, toll roads), Luxury (Boats,cars )

Question 3

Three major types of taxes:

Answer 3

• Proportional- same percentage of taxation on everyone regardless of income: Example: sales tax
• Progressive - a tax, which takes a larger percentage from those who earn a higher income. Example: Income
• Regressive - a tax that takes a larger percentage of income from low-income groups than from high-income groups. Example: gas, cigarettes and alcohol

Question 4

Federal taxes: Most go towards 4 main things:

Answer 4

• Social Services: Food stamps
• Military and government workers
• Social security
• Medicare (retirees) and Medicaid (poor)

Question 5

State taxes: Most go towards 4 things:

Answer 5

• Social services - welfare
• State colleges
• Roads
• Hospitals

Question 6

Local taxes: Must go towards 4 things

Answer 6

• Education (schools)
• Police/Firefighters
• Health
• Social Services - Free lunch in schools

Question 7

Three major groups are exempt from taxes:

Answer 7

Low income workers
Non profit organizations
US citizens working abroad