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Chapter 16

Matching
 
 
IDENTIFYING KEY TERMS
Match each item with the correct statement below. You will not use all the terms.
a.
regressive tax
b.
estate tax
c.
deficit
d.
entitlement
e.
continuing resolution
f.
gift tax
g.
public debt
h.
progressive tax
 

 1. 

 tax that has a higher rate for a higher income
 

 2. 

 benefit that federal law says must be paid to those who meet the eligibility requirements
 

 3. 

 tax imposed on the assets of one who dies
 

 4. 

 ruling that allows a government agency to function until its annual appropriations are approved
 
 
IDENTIFYING KEY TERMS
Match each item with the correct statement below. You will not use all the terms.
a.
custom duty
b.
progressive tax
c.
regressive tax
d.
interest
e.
excise tax
f.
payroll tax
 

 5. 

 Money from the ____ helps pay for Social Security and Medicare programs.
 

 6. 

 A ____ is a tax laid on goods brought into the United States from abroad.
 

 7. 

 ____ is a charge levied for borrowing money, generally earning a percentage of the amount borrowed.
 

 8. 

 A tax that is set at a flat rate, without regard for income or the ability to pay, is known as a(n) ____.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 
 
MAIN IDEAS
 

 9. 
The largest source of federal revenue from taxes comes from
a.
income taxes.
b.
excise taxes.
c.
estate taxes.
d.
custom duties.
 

 10. 
Taxes on the production, transportation, sale, or consumption of goods are _____ taxes.
a.
income
b.
corporation
c.
excise
d.
estate
 

 11. 
The power to borrow money, historically, was seen as a way for the United States to
a.
get the money needed to operate on a day-to-day basis.
b.
meet the costs of both long- and short-term crisis situations.
c.
demonstrate its financial power to other countries of the world.
d.
finance projects that just as easily could have been supported by taxes.
 

 12. 
One reason for the importance of the federal budget is that it
a.
determines how Social Security will be distributed.
b.
instructs the President on money matters.
c.
determines which public programs will have money to operate.
d.
limits the sources from which budget money can come.
 

 13. 
Which of the following limits on the Federal Government's power to tax is implied but not stated in the Constitution?
a.
No tax shall be levied on articles exported from any State.
b.
All taxes must be used for public purposes, not private purposes.
c.
States shall not be taxed for their governmental activities.
d.
States shall pay direct taxes proportionately based on population.
 

 14. 
The Federal Government can levy taxes on all of the following groups EXCEPT
a.
manufacturers.
b.
workers.
c.
churches.
d.
importers.
 

 15. 
A gift tax must be paid if a person
a.
receives money from the estate of a deceased relative.
b.
receives gifts valuing more than $10,000 in any one year.
c.
imports certain luxury items.
d.
receives gifts of more than $100,000 in a lifetime, paid in increments of $10,000 per year.
 

 16. 
Sometimes the Federal Government's power to levy taxes for nonrevenue purposes is denied by the Supreme Court because
a.
only taxes for revenue are truly constitutional.
b.
Congress is trying to raise more money than necessary.
c.
the tax provisions may interfere with a protected constitutional right.
d.
the Supreme Court does not agree with Congress's stand on an issue.
 

 17. 
The Federal Government is able to borrow money at lower interest rates than private borrowers because
a.
its securities are considered the safest possible investment.
b.
interest rates are set by Congress.
c.
it borrows over long periods of time.
d.
it borrows mostly from State governments.
 

 18. 
The Federal Government's practice of spending more than it takes in results in
a.
greater dependence on regressive taxes than on progressive taxes.
b.
deficit financing.
c.
low interest rates.
d.
longer fiscal years.
 

 19. 
Today, more than one in every five dollars spent by the Federal Government pays for
a.
interest on the national debt.
b.
money allocated for military equipment.
c.
money allocated to the various departments.
d.
money needed to complete the federal budget.
 

 20. 
Although only Congress can appropriate the money that the Federal Government uses to operate, it is the _____ who initiate(s) the spending process.
a.
President
b.
Supreme Court
c.
Budget Committee
d.
voters
 
 
INTERPRETING TABLES
Use the table to answer the following questions.

PUBLIC DEBT OF THE UNITED STATES
Fiscal
Year
Debt
(billions)
Per Capita
(dollars)
Interest Paid
(billions)
Percent of
Federal
Outlay
1870
$2.4
$61.06
 
—
—
1880
2.0
41.60
 
—
—
1890
1.1
17.80
 
—
—
1900
1.2
16.60
 
—
—
1910
1.1
12.41
 
—
—
1920
24.2
228
 
—
—
1930
16.1
131
 
—
—
1940
43.0
325
 
$1.0
10.5
1945
258.7
1,849
 
3.8
4.1
1950
256.1
1,688
 
5.7
13.4
1955
272.8
1,651
 
6.4
9.4
1960
284.1
1,572
 
9.2
10.0
1965
313.8
1,613
 
11.3
9.6
1970
370.1
1,814
 
19.3
9.9
1975
533.2
2,475
 
32.7
9.8
1980
907.7
3,985
 
74.9
12.7
1981
997.9
4,338
 
95.6
14.1
1982
1,142.0
4,913
 
117.4
15.7
1983
1,377.2
5,870
 
128.8
15.9
1984
1,572.3
6,640
 
153.8
18.1
1985
1,823.1
7,598
 
178.9
18.9
1986
2,125.3
8,774
 
190.2
19.2
1987
2,350.3
9,615
 
195.4
19.5
1988
2,602.3
10,534
 
214.1
20.1
1989
2,857.4
11,545
 
240.9
21.0
1990
3,233.3
13,000
 
264.8
21.1
1991
3,665.3
14,436
 
285.4
21.5
Source: Department of the Treasury  
 

 21. 
The total public debt first went over $900 billion in
a.
1945.
b.
1960.
c.
1979.
d.
1980.
 

 22. 
The interest paid
a.
reached over $5,526 billion by 1998.
b.
never increased by more than $10 billion per year.
c.
increased by over $280 billion since 1940.
d.
exceeded $100 billion in 1981.
 

 23. 
In what year did the public debt take the greatest percent of total federal outlay?
a.
1970
b.
1986
c.
1991
d.
1955
 

Essay
 
 
CRITICAL THINKING
 

 24. 
Identifying Central Issues Why does the Constitution allow the Federal Government to levy taxes?
 

 25. 
Identifying Assumptions What underlying assumptions about congressional powers and individuals' activities are suggested by the government's right to tax such sports as migratory bird hunting through the issuing of licenses?
 

 26. 
Predicting Consequences In what ways might the expanding public debt affect future citizens of the United States?
 



 
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