Whichofthefollowingstatementsis(are)correct?(x) A payroll tax is a tax on the wages that a firm pays its workers and in the United States the payroll tax isalso referred to as a social insurance tax.(y) The payroll tax differs from the individual income tax in the U.S. because the payroll tax is primarilyearmarked to pay for Social Security and Medicare.(z) Taxes on specific goods such as cigarettes, gasoline, alcoholic beverages and tires are called excisetaxes.(x), (y) and (z)(x) and (y) only(x) and (z) only(y) and (z) only(x) only

A payroll tax is a tax that the firm levies on workers for social security purposes. It is directly…

Answered: Whichofthefollowingstatementsis(are)cor…

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Design Of The Tax System

Section: Chapter Questions

Problem 2PA

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Whichofthefollowingstatementsis(are)correct?
1. (x) A payroll tax is a tax on the wages that a firm pays its workers and in the United States the payroll tax is
  
  also referred to as a social insurance tax.
2. (y) The payroll tax differs from the individual income tax in the U.S. because the payroll tax is primarily
  
  earmarked to pay for Social Security and Medicare.
3. (z) Taxes on specific goods such as cigarettes, gasoline, alcoholic beverages and tires are called excise
  
  taxes.
1. (x), (y) and (z)
2. (x) and (y) only
3. (x) and (z) only
4. (y) and (z) only
5. (x) only

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