Answers Government Fiscal Policy — QuizQuestion 7

7

QuizMultiple Choice

Fiscal Policy — Quiz

Question 7 • Government

What is a difference between payroll and income taxes?

Answer

A

Payroll taxes are based on an individual’s salary, while income taxes are itemized deductions from an individual’s paycheck.

B

Payroll taxes are paid by individuals who have a job, while income taxes are partially funded by employers and employees.

C

Payroll taxes are taken out of an individual’s salary once a year, while income taxes are paid by workers every time they get paid.

D

Payroll taxes are itemized deductions from an individual’s paycheck, while income taxes are based on an individual’s salary.

Explanation

Payroll taxes, such as Social Security and Medicare taxes, are listed as deductions from a worker’s paycheck. Income taxes are calculated based on a person’s income or salary, along with other factors. Choice D gives this distinction; choice A reverses it.

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