Pop Quiz! Who's Winning the Tax Game (and By How Much)?

Economy Quiz
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!

22 PHOTOS
Quiz: The Economy and the Tax Gap in the United States
See Gallery
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.

Citation

A. The top 1%
B. The Bottom 20%

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.

Citation

A. The top 1%
B. The bottom 20%

Answer: B. Depending on the state, the bottom 20% of earners pay between 6.7 and 1.1 times as much of their paycheck in state taxes.

Citation

A. 28%
B. 50%
C. 62%
D. 71%

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.

Citation

A. 50%
B. 41%
C. 70%
D. 91%

Answer: C. Under President Nixon, there were also up to 33 tax brackets. Today, there are six.

Citation

A. 27%
B. 39%
C. 73%
D. 91%

Answer: D. The first big drop in the top tax bracket -- to 77% -- happened under John F. Kennedy.

Citation

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.

Citation

A. 27.3%
B. 49.3%
C. 37.8%
D. 51.7%

Answer: B. The period right before the Great Depression witnessed one of the biggest income distribution gaps in U.S. history.

Citation

A. 25.3%
B. 32.3%
C. 41.7%
D. 50.3%

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.

Citation

A. 21.2%
B. 30.7%
C. 37.5%
D. 49.7%

Answer: D. In other words, income distribution in the U.S. today is more unbalanced than it was before the Great Depression.

Citation

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

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.

Tax Breaks and Home Ownership

Home ownership brings with it not only many trips to home improvement stores, but also a slew of tax breaks. It's up to you to take full advantage of the write-offs available to you. Here's what you can and can't deduct.

Read More

Brought to you by TurboTax.com

Sending Kids to College

TurboTax can help you take advantage of tax breaks to ease the financial burden of sending kids to college, including tax credits, tuition deductions, tax-free savings and more.

Read More

Brought to you by TurboTax.com

Tax Aspects of Home Ownership: Selling a Home

Though most home-sale profit is now tax-free, there are still steps you can take to maximize the tax benefits of selling your home. Learn how to figure your gain, factoring in your basis, home improvements and more.

Read More

Brought to you by TurboTax.com

How to Avoid Taxes on Canceled Mortgage Debt

If you lost your principal residence to a foreclosure or short sale, TurboTax can help you deal with the tax implications, including recent tax law changes that can offer some relief.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.