CORRECT DETAILED
ANSWERS|ALREADY GRADED A+
Define GDP - Answer- The total value of all the goods and services produced in the
United States in a year; a measure of the size of the U.S. Economy
What do the politics of taxation center on? - Answer- Who actually bears the greatest
tax burden
Define progressive tax - Answer- Taxes that require high income groups to pay a larger
percentage of their income in taxes than low income groups
Define regressive tax - Answer- Taxes that take a larger share of the income of low
income groups than of high income groups
What is the largest source of revenue for local governments? - Answer- Property taxes
Why do state and local governments give tax exemptions? - Answer- Generally to bring
new businesses and industry into the state or town
Which state tax is most regressive? - Answer- Sales tax
What are excise taxes usually placed on? - Answer- Cigarettes and alcohol
What is the most important tax for states? - Answer- General sales tax
What did the 16th Amendment do? - Answer- Created the federal income tax, a
progressive tax based on ability to pay
What is the argument against higher state corporate taxes? - Answer- Possibility that
such taxes will cause corporations to locate in another state
What is meant by tax burden? - Answer- Taxes as a percent of a person's income; the
larger the proportion of the income paid in taxes, the larger the tax burden
How do Americans feel about taxes? - Answer- Americans believe their taxes to be too
high
Tax limitations affect which level of government the most? - Answer- Local
Define a debt ceiling - Answer- Limits the amount of money a government can borrow to
a proportion of the tax base