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6 Cards in this Set
- Front
- Back
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Before the 16th amendment, how did the federal goverment finance its operations?
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The federal gov't relied predominantly on customs duties and excise taxes to finance its operations.
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When was the 1st federal income tax on individuals enacted? What was its purpose?
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The first federal income tax on individuals was enacted in 1861 to finance the Civil War but was repealed after the war.
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The Supreme Court in 1895 ruled that the income tax was unconstitutional because the tax needed to be apportioned among the states in proportion to their populations. Why would the requirment of proportionality be so difficult to administer?
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This type of tax system would be difficult to administer because it would mean that different tax rates would apply to individual taxpayers depending on their state of residence.
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What is a Pay-as-you-go tax?
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Pay-as-you-go tax is a tax system for businesses and individuals to pay installments of their expected tax liability on their income from employment, business, or investment for the current income year.
In the U.S., this is achieved by taxes being withheld from each paycheck and sent to the government. |
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Why was pay-as-you-go withholding needed in 1943?
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Pay-as-you-go withholding was needed in 1943 to adjust for the expanded number of the population being taxed, and to avoid significant tax collection problems.
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What are the 3 largest sources of federal revenue?
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1. Individual income taxes
2. Social security (FICA) taxes 3. corporate income taxes |
