5.4 taxes

Define the term 'Tax'.

• A required payment to a local, state, or national government

• A type of investment strategy

• A method of saving money

• A form of entertainment

Revenue is defined as:

• money collected or received by the government for public use

• The expenses incurred by a company in its business operations.

• The net profit after all expenses have been deducted from income.

• The total assets owned by a company.

Proportional Tax is defined as:

• A tax system where the tax rate is fixed

• A tax system where the tax rate increases as the taxable amount increases.

• takes the same % out of everyone's income

• A tax system where the tax rate is based on the taxpayer's ability to pay.

A 'Progressive Tax' is defined as

• takes a larger % of the income from high income people

• A tax rate that decreases as the taxable amount increases.

• A tax rate that remains constant regardless of the taxable amount.

• A tax that is applied only to luxury goods.

Define the term 'Regressive Tax'.

• A tax that takes a larger percentage from low-income earners

• A tax that takes a larger percentage from high-income earners than from low-income earners.

• A tax that takes an equal percentage from all income earners.

• A tax that is only applied to luxury goods.

The purposes of taxation are to:

• Fund public goods and services

• stabilize the economy

• Redistribute wealth

• All of the above

Taxes paid by U.S. consumers include:

• Income tax, sales tax, and property tax

• Only income tax

• Only sales tax

• Only property tax

Which of the following best explains the principles of tax fairness?

• Benefit and ability to pay principles

• Efficiency and simplicity

• Revenue generation and compliance

• Progressivity and proportionality

Identify major government spending categories.

• Education, Healthcare, Defense, Infrastructure

• Sports, Entertainment, Fashion, Travel

• Technology, Agriculture, Mining, Fishing

• Real Estate, Retail, Hospitality, Automotive

Taxing helps to stabilize the economy by:

• increasing government revenue and reducing inflation.

• decreasing government spending and increasing inflation.

• eliminating the need for monetary policy.

• creating a surplus of goods and services.