Asked by Dylan Gauthier on Jun 12, 2024
Verified
The Social Security tax, and to a large extent, the federal income tax, are labor taxes.
Social Security Tax
A tax collected by the government to fund the Social Security program, typically levied on both employers and employees to provide retirement, disability, and survivorship benefits.
Federal Income Tax
An annual financial burden put on individuals, corporations, trusts, and various legal bodies by the United States federal government.
Labor Taxes
Taxes imposed on the wages and salaries of employees.
- Identify the main sources of tax income in the U.S. economy and distinguish among various tax categories.
- Investigate how taxation influences labor supply and working hour allocations.
Verified Answer
DP
Daksh PatelJun 13, 2024
Final Answer :
True
Explanation :
Both the Social Security tax and the federal income tax are primarily levied on earnings from labor, making them labor taxes. Social Security taxes are directly tied to employment income, while federal income tax applies to all income, including wages, which constitutes a significant portion of labor income for most individuals.
Learning Objectives
- Identify the main sources of tax income in the U.S. economy and distinguish among various tax categories.
- Investigate how taxation influences labor supply and working hour allocations.