How Much Do You Know About Taxes?

1. True or False: Federal taxes are higher now than they've been in more than 50 years.

True

False

False. Federal tax revenue as a share of the U.S. economy is at its lowest point in more than half a century. More info: http://bit.ly/untoldstory

Explanation

False. Federal tax revenue as a share of the U.S. economy is at its lowest point in more than half a century. More info: http://bit.ly/untoldstory

2. Income taxes are the single largest source of revenue for the federal government. Which is the second largest source of tax revenue?

Excise taxes on gasoline and other consumer items

Payroll taxes to fund the Social Security and Medicare programs

Corporate income taxes

Customs duties on imported goods

Payroll taxes to fund the Social Security and Medicare programs. Income taxes account for around 47% of all federal tax revenue, followed by payroll taxes (33%), corporate income taxes (12%), excise taxes on gasoline and other consumer items (3%), and customs duties on imported goods (1%). More info: http://bit.ly/GovRevenues101 For why it's important to consider Social Security and Medicare when looking at the federal budget: http://bit.ly/SocialSecFAQ

Explanation

Payroll taxes to fund the Social Security and Medicare programs. Income taxes account for around 47% of all federal tax revenue, followed by payroll taxes (33%), corporate income taxes (12%), excise taxes on gasoline and other consumer items (3%), and customs duties on imported goods (1%). More info: http://bit.ly/GovRevenues101 For why it's important to consider Social Security and Medicare when looking at the federal budget: http://bit.ly/SocialSecFAQ

3. Which of the following will definitely NOT qualify you for a tax deduction?

Buying a yacht

Buying an English bulldog

Buying a third home

Setting up a new charity and then donating money to it

Buying an English bulldog does NOT qualify you for a tax deduction. But if you take out a mortgage to buy a yacht or a third home, the interest on that mortgage qualifies you for a tax deduction. Charitable contributions—including to a charity you establish—are also tax-deductible. More info: http://bit.ly/2012deficit

Explanation

Buying an English bulldog does NOT qualify you for a tax deduction. But if you take out a mortgage to buy a yacht or a third home, the interest on that mortgage qualifies you for a tax deduction. Charitable contributions—including to a charity you establish—are also tax-deductible. More info: http://bit.ly/2012deficit

4. The top official tax rate on corporate profits is:

20%

25%

30%

35%

35%. While the top official tax rate on corporations is 35%, on average corporations pay a rate far lower than that due to deductions, credits, and loopholes in the tax code. More info: http://bit.ly/untoldstory

Explanation

35%. While the top official tax rate on corporations is 35%, on average corporations pay a rate far lower than that due to deductions, credits, and loopholes in the tax code. More info: http://bit.ly/untoldstory

5. In 2001 and 2003 President Bush passed tax cuts that cut taxes for all taxpayers, which were extended by President Obama. However, those tax cuts have been criticized for disproportionately benefiting the wealthiest Americans. How much money have the wealthiest 1% of Americans saved in taxes since 2001 as a result of the Bush-era tax cuts?

$51 billion

$126 billion

$255 billion

$773 billion

$773 billion. On average in 2012, taxpayers in the wealthiest 1 percent of Americans will each save around $70,250 thanks to the Bush-era tax cuts. More info: www.costoftaxcuts.com and http://bit.ly/2012deficit

Explanation

$773 billion. On average in 2012, taxpayers in the wealthiest 1 percent of Americans will each save around $70,250 thanks to the Bush-era tax cuts. More info: www.costoftaxcuts.com and http://bit.ly/2012deficit