Lecture 8 Taxation Note Quiz

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  1. Economists view the government as a type of _____.
  2. Money goes into the government in the form of ____ and _____ go out.
    taxes; services
  3. Just as business is concerned with ____, ____, and ____, so is the government.
    income; profit; accountability
  4. What four ways does the government get money?
    • 1. Income tax
    • 2. Social Security tax
    • 3. Excise tax
    • 4. Other misc. taxes
  5. What percent of government earnings is both individual and corporate income tax? What affects this amount?
    • 54%
    • Unemployment
  6. What percent of government earnings is based upon Social Security tax? What affects this amount?
    • 36%
    • Unemployment
  7. What is excise tax? What percent of government earnings comes from this tax?
    • Taxes on alcohol, tobacco, transportation (gas)
    • 4%
  8. What is the greatest amount of income for the government to operate from? What percent?
    • Paychecks
    • 90%
  9. What three countries lead the west in taxes? What do these taxes pay for?
    • Denmark, Norway, and Sweden
    • Education, medicine, etc.
  10. What country does not collect taxes? Why?
    • Muslim nations
    • Against the Koran
  11. What two countries are increasing their taxes? Why?
    • China and Japan
    • Providing more government services
  12. What five places does our money go?
    • 1. Transfer Payments
    • 2. National Defense
    • 3. Interests on the Debt
    • 4. Education Assistance
    • 5. Foreign Aid
  13. What percent of our money goes to transfer payments? What is included in this?
    • 56%
    • Social Security - 22%
    • Medicare - 10%
    • Income Security - 15%
    • Health Assistance - 7.5%
    • Veterans Benefits - 2.5%
  14. What percent of our money goes to National Defense? What is included in this?
    • 19%
    • Armed services and business contractors or provide weapons and supplies
  15. What percent of our money goes to Interest on the Debt? Who collects this debt?
    • 15%
    • U.S. Treasury
  16. What percent of our money goes to Education Assistance?
  17. What percent of our money goes to Foreign Aid? What countries receive the most of this money?
    • >1%
    • Isreal, Egypt, and other Middle East countries
  18. What three taxes go to support state and local budgets?
    • 1. State sales tax
    • 2. State income tax
    • 3. Property tax
  19. What three things do state and local budgets often deal with?
    • 1. education
    • 2. transportation
    • 3. public welfare assistance
  20. What four reasons do governments collect taxes?
    • 1. pay for cost of government (transfer pay)
    • 2. protect selected industries (tariffs)
    • 3. discourage certain activities (alcohol, cigarettes)
    • 4. encourage others through tax breaks (business entrepreneurship)
  21. What is the benefits-received principle?
    those who benefit the most should pay the most (hurts the poor)
  22. What is the ability-to-pay principle?
    tax in proportion to who is best able to pay taxes (hurts the rich)
  23. What are the three types of taxes? Explain each
    • 1. Proportional tax: everyone taxed the same rate (flat tax)
    • 2. Progressive tax: rich pay greater than the poor
    • 3. Regressive tax: poor pay more than the rich (sales tax is considered regressive)
  24. What is the democrats' view of taxes today? Republicans? What is the reality?
    • Democrats: tax money goes to support important programs
    • Republicans: lower taxes and cut services
    • Reality: Americans want a lot of services and lower taxes - the result is federal debt and deficit

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Lecture 8 Taxation Note Quiz
2014-03-04 01:24:20
Taxation in American Economy
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