Question

For U.S. government entities such as the federal government, states, and municipalities to provide services, they collect revenue from ________?

1) taxes
2) donations
3) loans
4) grants

Answer 1

Option (1), U.S. government entities, including the federal, state, and local governments, primarily collect revenue from taxes to fund their services.

Step-by-step explanation:

For U.S. government entities such as the federal government, states, and municipalities to provide services, they collect revenue primarily from taxes. Taxes are the essential source of funding for government expenditures, including military, police, education, infrastructure, and social services. The federal government, for instance, generates revenue through individual income taxes, payroll taxes (including Social Security and Medicare taxes), and selective sales taxes on goods like gasoline, alcohol, and tobacco.

State and local governments also impose taxes, such as property taxes, sales taxes, and occasionally, income taxes, to support their respective services. Additionally, intergovernmental revenues are funds shared between different levels of government to finance areas like welfare, healthcare, and education.