Which of the following statements is true?
All three levels of government can collect income tax.
State and local government alone can collect income tax.
Only the federal government collects income tax.
All cities and other local governments collect income tax.
The statement "Only the federal government collects income tax" is true.
The statement that is true is:
All three levels of government can collect income tax.
To determine which statement is true, we need to understand the authority and jurisdiction of each level of government when it comes to income tax collection.
1. All three levels of government can collect income tax: This statement is not true. While all three levels of government (federal, state, and local) can levy taxes, income tax collection is primarily the responsibility of the federal government.
2. State and local government alone can collect income tax: This statement is not entirely true. While some states do levy income taxes on their residents, not all states do. Additionally, local governments typically do not have the authority to collect income taxes.
3. Only the federal government collects income tax: This statement is closest to being true. The federal government is primarily responsible for collecting income taxes in the United States. The Internal Revenue Service (IRS) is the federal agency tasked with this responsibility.
4. All cities and other local governments collect income tax: This statement is not true. While some local and municipal governments in the United States do impose local income taxes, it is not universal. In fact, only a limited number of cities and local jurisdictions have the authority to collect income taxes.
In conclusion, statement number 3, "Only the federal government collects income tax," is the most accurate statement among the options provided.