Which level of government relies the most on income tax?

a. federal

b. state

c. local

The correct answer is:

A) federal.

Explanation:

Local and state governments receive money from the federal government as well as from income taxes.

Local and state governments also receive money from sales tax, food tax, gas tax, property taxes, etc.

The federal government, however, receives no property taxes from citizens; no sales tax; no food tax; and no gas tax. They also have no branch above them to receive funding from; this means they rely more heavily on income tax from the citizens.

The question is asking "Which level of government relies the most on income tax?" and the answer is a) federal. Local governments mostly rely on the income from local properties, such as from the land they own and lease. The income tax, in contrast is the main source of the revenue of the federal government.