Tax Day Trivia Questions and Answers

60+ Tax Day Trivia Questions and Answers

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Tax Day is rarely anyone’s favorite. It may seem like there is nothing to smile about, but taxes help build our economies.

This tax day trivia will make your April 15 a little more fun and empower adults to file returns on time.

If you’re a music aficionado and probably have listened to the Beatle’s song “Taxman”. The inspiration behind it was the high levels of progressive tax in Britain.

Tax Day Trivia Questions and Answers

Did you know that everyone owes tax? Those in space exploration get taxed. Even if you get a refund, you are still liable for tax. The IRS has so far paid out more than 56 Million refunds.

Learn the history of tax systems and the entire process by taking up this informational Tax Day trivia questions and answers.

 

1. How much government revenue comes from personal income taxes?

Almost half of all federal revenue, or 47 percent, comes from individual income taxes

 

2. How did the Internal Revenue Service come about?

The IRS has its roots in the Civil War when a revenue bureau was set up to collect taxes levied to support the war effort in the North.

 

3. Do lower-income Americans pay too much in taxes?

That likely depends on your political affiliation.

 

4. Was there really a national income tax before the one we have now?

Congress passed a national income tax in 1894, which was ruled unconstitutional the following year by the U.S. Supreme Court.

 

5. If the Supreme Court said the income tax was unconstitutional, why do we have it now?

Enough states changed the Constitution to allow it.

 

6. Which state can we “blame” for passing the 16th Amendment?

Delaware was the 36th state to ratify the 16th Amendment in 1913.

 

7. So why is April 15 usually the big Tax Day?

The deadline was pushed back to April 15, so the IRS could spread out the work involved with processing all the forms.

 

8. How long was the first tax form?

It was four pages long, including instructions.

 

9. What was the highest tax rate ever?

During World War II, the highest tax bracket was taxed at 91 percent and the lowest tax bracket was 23 percent.

 

10. The largest source of government revenues is?

Individual income taxes

 

11. Taken as a whole, the federal tax system is?

The U.S. tax system is progressive, which means that tax rates (as a percent of income) increase with income levels.

 

12. The lowest-earning 40% of Americans do not pay federal taxes?

Even the lowest-income Americans pay federal taxes.

 

13. Tax expenditures, known as “tax breaks,” tend to benefit who?

Top income earners

 

14. Of the total revenues taken in from income taxes, how much was contributed by the top 1%?

26%

 

15. Which of the following is the largest, in dollars?

The cost of all tax expenditures (tax breaks).

 

16. What is the single largest tax expenditure?

Exclusion of pension contributions and earnings.

 

17. What is the statutory federal corporate tax rate in the U.S.?

21%

 

18. Who benefits the most from tax expenditures?

Individuals

 

19. The total tax burden in the United States is?

Lower than in other advanced economies.

 

20. Which ancient civilization revered the tax professional as the noblest man in society?

Greece

 

21. In medieval Europe, how was a tithe paid and what was it used for?

 

22. What is a duck stamp, and how much is it worth?

Over $5,000

 

23. In what year was the Twenty-fourth Amendment ratified?

1964

 

24. How many tax returns were filed electronically in the current tax year?

44,011,726

 

25. What is the largest expense on average for our states?

Medicaid

 

26. What was the total amount in refunds that the IRS paid to taxpayers in the current tax year?

$2,725

 

27. How many Americans were out of work during the Great Depression?

Between 12 and 15 million workers

 

28. What is the origin of the word tariff?

The English word tar, which is a thick, sticky liquid.

 

29. For the year 2013, President Barack Obama and his wife, Michelle, declared a taxable income of $481,098. What was their total tax liability for that year?

$98,169

 

30. What was the name southerners gave to the tariff of 1828?

The Tariff of Abominations

 

31. How many cocoa beans do you think you would need to buy a rabbit from the Aztecs?

 

32. How much do you think the tax on a gold watch was during the Civil War?

 

33. What items were first taxed as a luxury in 1898, at the start of the Spanish-American War, and continue to be taxed today?

The telephone

 

34. What were the most popular male and female names in 1935?

Robert and Mary

 

35. Which issue had the most lobbyists working on it in 1999?

Taxation

 

36. What is a mass tax?

A tax that is paid by the majority of citizens.

 

37. What was the average annual income in 1913?

$800

 

38. What phrase describes the way supply-side economics distributes wealth?

“trickle-down”

 

39. How many people do you think reported 078-05-1120 as their Social Security number?

40,000

 

40. How much do you think it costs taxpayers for each $100 collected by the IRS?

41 cents

 

41. The error rate for a paper return is 21 percent; what do you think the error rate is for an e-file return?

Half a percent

 

42. How much do you think the U.K.’s color TV licensing fee is (in U.S. dollars)?

$241

 

43. How does a regressive tax impact lower income groups?

A regressive tax takes a larger share of income from low-income groups than from high-income groups.

 

44. How does a progressive tax help equalize the wealth of a country?

Takes a larger share of income from high-income groups than from low-income groups, which “gives” lower-income workers more money by letting them keep more of what they earn.

 

45. What is the service agency that was created in 1953 after the Bureau of Internal Revenue was reorganized?

Internal Revenue Service, or IRS.

 

46. What is the goal of the judges in the United States Tax Court?

The judges aim to ensure that taxpayers are assessed only what they owe, and no more

 

47. What were two effects of the Tariff of 1832 on southern cotton farmers?

The tariff meant that cotton farmers did not sell much cotton to England or have as much money to spend. They could not afford to buy imported goods.

 

48. Why did the government pass a federal income tax during the Civil War only to repeal it later?

To raise additional revenue for the war effort.

49. What is the purpose of the FICA tax?

FICA provides the funding for Social Security.

 

50. How did the Tax Reform Act of 1986 affect the wealthy?

Tax cuts encouraged the wealthy to pay their taxes and then invest their remaining income in the economy.

 

51. Where does the government get the money needed to provide essential goods and services?

Taxes

 

52. What do all income levels have in common in a proportional tax?

The same tax rates

 

53. What is the term used for the idea that people in different income groups should pay different amounts of taxes, or different percentages of their incomes as taxes?

Vertical equity

 

54. How does the formal tax legislation process differ from the informal tax legislation process?

The formal tax legislation process is based on the steps outlined in the Constitution. The informal tax legislation process is a way for citizens to make their views known to legislatures.

 

55. What is the tax effect of having a mortgage on a house?

Home mortgage expenses can be deducted before figuring taxable income. Depending on an individual’s circumstances, having a mortgage could reduce the taxes a taxpayer owes.

 

56. What could a business do if it experiences an increase in its property tax rates?

The business will probably try to shift the increased taxes to consumers by charging higher prices for its goods or services.

 

57. Why is the cigarette tax considered a sin tax?

It is a tax on a product that does not promote the health of the user.

 

58. What prevents horizontal equity from happening?

Because every taxpayer is in a different situation and can claim different combinations of tax credits, deductions, and exemptions.

 

59. Why does an employer need a Form W-4 from each employee?

The form helps the employer determine how much to withhold from each employee’s paycheck

 

60. Who benefits from electronic filing of tax returns?

Both the government and taxpayers

 

61. What can happen to a taxpayer who does not follow the system of voluntary compliance?

The IRS has the authority to take actions to collect any unpaid taxes and assess penalties and interest.

 

62. What two criteria can be used to assess whether a tax is fair?

Ability to pay and benefits received.

 

63. How does the major source of tax revenue for the federal government differ from that of state and local governments?

At the federal level, individual income taxes provide the greatest revenue source. At the state and local level, individual income tax provides the largest tax source.

 

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