Understanding Taxes - Assessment: Income Tax Facts

Match the descriptions below to their correct terms by choosing from the drop-down menu. Continue to Part 2 or, to assess your answers, click the Check My Answers button at the bottom of the page.

Many people believe that because of big differences in _______, those who earn more should pay a greater share of taxes than those who earn less.

Under this system, an employer makes payments to the IRS for the employee.

An expense that can be deducted before a person calculates taxable income.

According to this principle, low-wage earners pay a smaller percentage of their income to taxes than do wealthy taxpayers.

According to this principle, people with the same income pay the same amount in taxes.

Match the descriptions below to their correct terms by choosing from the drop-down menu. Continue to Part 3 or, to assess your answers, click the Check My Answers button at the bottom of the page.

Interest paid on a home mortgage

Money withheld from weekly paycheck

Two workers who earn the same amount and pay the same amount in taxes

The Roses earn more than the Smiths and pay nearly three times as much in taxes.

Money given to the city's animal shelter

Choose which individual or family in each pair would most likely pay lower taxes by clicking on the letter of the correct response. Assume that both have the same income and that all other factors are equal. To assess your answers, click the Check My Answers button at the bottom of the page.

Theme 4: What Is Taxed and WhyLesson 3: Income Tax Facts