Chapter 14

Chad's family lives below the poverty line. Both of his parents work at low-income jobs that do not provide health insurance. Which entitlement program offers healthcare for Chad?

Medicaid

What are two reasons Medicare costs are rising?

People are living longer, and medical technology is more expensive.

Which of the following best describes a means-tested program?

People who are paid more get fewer benefits.

Why is the federal income tax a progressive tax?

A higher income pays a higher percentage in taxes.

Which of the following is a major difference between a state's operating budget and its capital budget?

An operating budget must be balanced; a capital budget does not have to balance.

Where does the U.S. government get its authority to tax?

Constitution

The U.S. government's authority to tax comes mainly from the

Constitution.

Which of the following best describes a means-tested program?

Eligibility depends on income.

The government's power to tax is limited. Which of the following is illegal?

The government collects export taxes on U.S.-made items that are sent out of the country.

What do Social Security taxes pay for?

benefits to older citizens

What is the biggest category of federal discretionary spending?

defense

What is one example of discretionary spending?

education

An example of discretionary spending is

education.

Who pays unemployment taxes?

employers

What tax did the government create to keep people from giving away their money before they die?

gift tax

In order to keep people from giving away their money before they die, the federal government created the

gift tax.

Which of the following is an example of a program for which federal and state governments share the cost?

highway construction

What is the main source of funding for most local public schools?

local property taxes

In most communities, the main source of funding for local public schools probably comes from

local property taxes.

Your aunt is a state employee. Which part of the budget does her salary come from?

operating budget

What are the main sources of revenue for local governments?

property taxes

What is the main source of tax revenue for local governments?

property taxes

Which of the following is an example of state spending?

public safety

Your receipt from a department store shows that you paid a 5 percent sales tax on sports equipment. What kind of tax is this?

regressive tax

Why does the federal government collect income taxes throughout the year?

so the government can pay for regular expenses such as rent

Funding for most public universities comes from

state sales taxes

What gives the U.S. government the right to collect taxes?

the U.S. Constitution

How do most states pay for their capital budget?

through long-term borrowing or the sale of bonds