Which of the following is used by the federal government to provide Social Security and Medicare benefits?


federal payroll tax

property tax

sales tax

FICA

Verified Answer :

FICA (Federal Insurance Contributions Act)

The correct answer is: "FICA".

FICA stands for Federal Insurance Contributions Act. It establishes a mechanism through which both employers and employees make their contributions and fund the Social Security system and the provision of Medicare benefits.

Such funding is used at a federal level to provide income support to individuals who are retired, who suffer disabilities or, for example, to the families (children) of deceased workers.