Chapter Summaries with Key Terms and Academic Vocabulary

Chapter 23: Taxes and Social Security

Section 23.1 Summary
Taxes are payments that people must make to support federal, state, and local governments. A good tax system should be fair, simple, convenient, stable, and flexible. Tax dollars pay for a wide range of services, such as education, transportation, and military services. Common taxes include income taxes, Social Security taxes, sales taxes, user fees, and property taxes. Your income tax return shows how much income you received and how much tax you owe. Form W-4 tells your employer how much tax to withhold, and Form W-2 shows how much you earned.

Section 23.2 Summary
Social Security is a federal government program that helps disabled and retired people and their families. The money for Social Security benefits comes chiefly from Social Security taxes paid by workers and employers. The government uses your Social Security number to keep track of your contributions and work history. Social Security benefits include disability benefits, survivors’ benefits, retirement benefits, and health insurance benefits. The Social Security system must change to keep the amount of money being paid out from exceeding the amount coming in.

Key Terms
withhold
Form W-4
Form W-2
Internal Revenue Service (IRS)
income tax return
deduction
exemption
Social Security
work credits
Medicare

Academic Vocabulary
percentage
contribute
obtained