Asked by moses munyai on Jul 21, 2024
Verified
Which statement is true?
A) The Joneses pay more in Social Security tax than in personal income tax
B) The Joneses pay more in personal income tax than in Social Security tax
C) The Joneses pay about the same amount in Social Security tax and personal income tax
D) It is impossible to determine if the Joneses pay more in Social Security tax than in personal income tax
Social Security Tax
A tax levied on both employers and employees to fund the Social Security program, typically taken as a percentage of wages.
Taxable Income
The amount of an individual's or a corporation's income that is subject to taxes, after all deductions and exemptions.
- Comprehend the principles and consequences of various origins and frameworks of federal expenditures and taxes.
- Distinguish among diverse tax categories such as payroll tax, corporate income tax, and personal income tax, and understand their impacts.
Verified Answer
LS
Lekshmi SudhaJul 22, 2024
Final Answer :
A
Explanation :
Social Security tax is a flat rate (6.2% for employees in 2023) on wages up to a certain limit, while personal income tax rates are progressive and can be reduced significantly by deductions and credits, especially for families with children. Given the Joneses' modest income and their ability to take the standard deduction and potentially other tax benefits for having children, it's likely they would owe little to no personal income tax, making Social Security tax their larger tax liability.
Learning Objectives
- Comprehend the principles and consequences of various origins and frameworks of federal expenditures and taxes.
- Distinguish among diverse tax categories such as payroll tax, corporate income tax, and personal income tax, and understand their impacts.