As the presidential race heats up, one of the most contentious issues continues to be the economy. Whether the subject is the tax code, health care reform or unemployment, it's clear that November's battle will feature two very different visions of America -- and two very different ideas of how to cure the country's economic malaise. With that in mind, we've decided to look at some of America's biggest economic surprises.
Think you know the economy? Take our quiz and find out!
21PHOTOS
Quiz: The Economy and the Tax Gap in the United States
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Pop Quiz! Who's Winning the Tax Game (and By How Much)?
A. 30%
B. 27%
C. 19%
D. 13.9%
Answer: C. Thanks in large part to the exceedingly generous 15% capital gains and dividend taxes, most of the super-rich pay a lower tax rate than middle-class filers making $69,001 per year.
Answer: B. Taxpayers in the bottom 20% pay, on average, 8.8% of their income into Social Security. Those at the top pay, on average 1.6% of their income into Social Security.
Answer: B. While he has become the patron saint of tax cutters, for most of Ronald Reagan's presidency, the top tax rate was much higher than it is today.
A. $50,000
B. $375,000
C. $5.12 million
D. $10 million
Answer: C. In 2001, the estate tax exemption topped out at $675,000, and the top rate was 55%. Today, the exemption is $5.12 million, and the top rate is 35%. Side note: $5.12 million represents the average yearly earnings of over 103 households – none of whom would get a 100% exemption on their taxes.
Answer: B. In the 1950's, America's thriving middle class was flush with cash. Their free spending further increased employment, creating a virtuous economic cycle.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at@bruce1971.
The IRS allows you to claim a deduction for the donations you make to qualified organizations. These organizations include more than just charities and will include any school district program that does not operate for profit and is solely supported by state and local governments.
The IRS has reintroduced Form 1099-NEC as the new way to report self-employment income instead of Form 1099-MISC as traditionally had been used. This was done to help clarify the separate filing deadlines on Form 1099-MISC and the new 1099-NEC form will be used starting with the 2020 tax year.
Receiving unemployment benefits doesn't mean you're automatically ineligible for the Earned Income Credit, but there are other requirements you'll also need to satisfy to claim the EIC.
Not all capital gains are treated equally. The tax rate can vary dramatically between short-term and long-term gains. Generating gains in a retirement account, such as a 401(k) plan or an IRA, can also affect your tax rate.
