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How are payroll taxes different from personal income taxes?

  • Question 4a of 10 - Taxes

  • Maximum Attempts: 1
  • Question Type: Multiple Choice
  • Maximum Score: 2
  • Question: How are payroll taxes different from personal income taxes?
  • Answers:
  1. They tax consumption rather than wealth.
  2. They increase the purchasing power of consumers rather than decreasing it.
  3. They reduce the demand for harmful goods rather than increasing this demand.
  4. They pay for specific social programs rather than general government activities.

The correct answer is: They pay for specific social programs rather than general government activities. Payroll taxes are targeted to support specific government activities such as the Social Security program.

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