Social Security taxes paid by workers and employers would be part of which category of taxes? A. business income taxes B. employment taxes C. excise taxes D. personal income taxes

Short Answer

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B. employment taxes

Step by step solution

01

- Define Each Tax Category

Understand what each category of tax means: A. Business Income Taxes: Taxes imposed on the earnings of a business. B. Employment Taxes: Taxes related to employment, often encompassing Social Security and unemployment taxes.C. Excise Taxes: Taxes imposed on specific goods and services, such as gasoline and tobacco.D. Personal Income Taxes: Taxes imposed on individuals' earnings or income.
02

- Identify Social Security Taxes

Recognize that Social Security taxes are contributions made by both employees and employers to fund the Social Security program, which provides benefits for retirees, disabled individuals, and survivors.
03

- Match Social Security Taxes to a Category

Determine which tax category from Step 1 describes the nature of Social Security taxes. Since these taxes are related to employment and are paid by both employees and employers, they fall under employment taxes (Category B).

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Employment Taxes
Employment taxes are taxes related to employment. These taxes usually include Social Security taxes, Medicare taxes, federal income tax withholding, and state/local income tax withholding.

Both employers and employees are responsible for paying these taxes. Employers withhold part of these taxes from employees’ wages and are responsible for submitting both their share and the employees' share to the government. This way, funds are collected to support various government programs including unemployment benefits and public healthcare systems.
Social Security
Social Security forms a crucial part of the social safety net in many countries. It includes contributions from both employees and employers, which are used to support benefits for retirees,disabled individuals, and survivors (such as family members of deceased workers).

The Social Security tax rate is set by the government and is a percentage of wages earned up to a certain limit. Employers typically match the amount contributed by employees, essentially doubling the contribution. The accumulated fund from these contributions allows the government to support individuals who qualify for these benefits.
Tax Definitions
To better understand the category of Social Security taxes, it's important to get familiar with tax definitions:

A. **Business Income Taxes**: Taxes levied on the profits made by businesses.
B. **Employment Taxes**: Taxes that come from the employment process, including Social Security and Medicare taxes, which are shared by employers and employees.
C. **Excise Taxes**: Specific taxes applied to certain goods and services, like fuel and alcohol.
D. **Personal Income Taxes**: Taxes imposed on an individual's income from various sources, such as salaries, wages, and investments.

By knowing these definitions, students can better match specific taxes, like Social Security, with their correct categories.
Educational Workbook
An educational workbook helps restate and reinforce these complicated concepts into simpler, understandable language. Workbooks often include exercises that align with textbook solutions and classroom teaching.

Such tools are great for practice as they encourage students to review, practice, and apply the information repeatedly.
Interactive features may also be included, such as quizzes and guided step-by-step solutions, which help test understanding.

By providing clearer explanations and multiple examples, students get a better grasp of difficult terms and concepts related to taxation.

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