Tax Basics

Payroll tax

Payroll tax is a tax imposed on an employee's wage or salary in the form of Social Security and Personal Income taxes.

Real Estate tax, a tax based on the value of the land and the buildings owned by its taxpayers, is a good example of _____.

Property tax

Property tax

Property tax is the taxation on property that you own.

Federal tax

A federal tax is a tax collected by the federal government to pay for federal programs.

Purchase tax

A purchase tax is a tax that local or state officials place on the purchase of goods or services.

State tax

A state tax is a tax collected by state officials to fund programs, projects, and infrastructure of the state.

Wealth tax

A wealth tax is a one time tax levied by the federal government on an estate or the transfer of funds on any amount over $10,000.

Which of the following is an example of a wealth tax?

Estate tax

Which of the following statements best describes the relationship between federal and state income taxes?

Federal income tax is based on your annual income while state income tax is generally a specific percentage of federal.

For which of the following would not expect to pay an excise tax?

Groceries

Internal Revenue Service

The Internal Revenue Service is a branch of the federal government that oversees the collection of taxes.

What is the defining feature of a progressive tax?

Under a progressive tax, those with more income shoulder more of the tax burden.