Do You Know Where Your Tax Money Goes?

5 Questions

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Do You Know Where Your Tax Money Goes?

Death, taxes and confusion over taxes are the certainties in life. Take this quiz from Five Easy Theses, a new book on America's most solvable major economic issues, to learn more about taxes.


Questions and Answers
  • 1. 
    Tax expenditures, in the form of permissible deductions, credits, and exclusions, must be made up for by higher tax rates on income not similarly favored.  Tax expenditures in this sense are much like direct appropriations, but they receive far less public and Congressional scrutiny.  One of the most popular tax expenditures is the home mortgage deduction.  Its aggregate effects and its wealth transfer effects, though, are dubiously beneficial as a matter of public policy.  How much does this deduction cost the tax base every year?  
    • A. 

      About $70 billion

    • B. 

      About $5 billion

    • C. 

      About $750 billion

    • D. 

      About $50 billion

  • 2. 
    Not every country allows tax deductions for home mortgage interest. Which of these countries has no such deduction?
    • A. 

      All of these.

    • B. 

      The United Kingdom

    • C. 

      Australia

    • D. 

      Canada

  • 3. 
    At what income level does a taxpayer reach the maximum annual obligation to Social Security?
    • A. 

      $118,500

    • B. 

      $570,750

    • C. 

      $300,340

    • D. 

      $1,000,000

  • 4. 
    Other countries are having problems with healthcare costs as well. Maybe you think they can’t manage them any better than we can. The country with the second-highest per capita health care spending is Norway.  We spend $9,000 per person. How much does Norway spend?
    • A. 

      $6,000

    • B. 

      $5,000

    • C. 

      Option 3

    • D. 

      Option 4

  • 5. 
    The provision for the deduction of corporate interest favors businesses financing growth and operations with debt rather than equity.  This increases overall leverage in the economy, which may threaten its stability in times of financial stress.  In which of the last fifteen years was the ratio of debt to equity greatest for American corporations as a whole?
    • A. 

      2015

    • B. 

      2006

    • C. 

      2007

    • D. 

      2009