What tax is deducted not only to fund Social Security but also Medicare?

The correct choice in this scenario is the Social Security Tax. This tax is specifically designed to fund both the Social Security and Medicare programs. When individuals receive their paychecks, a portion is automatically withheld for this tax, which helps provide vital benefits for retirees, disabled individuals, and those receiving Medicare.

The significance of the Social Security Tax lies in its dual purpose. It ensures that funds are available for Social Security benefits, which support individuals who are retired or unable to work due to disability, as well as for Medicare, the federal health insurance program primarily for people aged 65 and over, and for some younger individuals with disabilities.

The other tax options do not fulfill this dual function. Income Tax is a broader tax that funds various government programs and services but is not earmarked specifically for Social Security or Medicare. Medicare Tax, while it does contribute to Medicare funding, does not encompass Social Security benefits. Federal Unemployment Tax is intended exclusively for unemployment benefits and does not pertain to either Social Security or Medicare. Thus, understanding the role and scope of the Social Security Tax clarifies why it is the correct answer in relation to funding both Medicare and Social Security.