Civic Literacy Practice Test 2025 - Free Civic Literacy Questions and Study Guide

In the context of a federal system, shared powers refer to those responsibilities and functions that both the national and state governments have the authority to carry out. Collecting taxes is a prime example of a shared power, as both levels of government can impose and collect various forms of taxes, such as income tax, sales tax, and property tax.

This power is essential for the functioning of government at all levels since tax revenue is necessary to fund public services, infrastructure, and other governmental activities. By allowing both federal and state governments to collect taxes, the system promotes a balance of power and enables states to meet local needs while also contributing to national expenditures.

While regulating interstate commerce is largely a power reserved for the federal government, and coordinating foreign affairs and issuing currency are strictly federal powers, the ability to collect taxes illustrates how responsibilities can be divided yet shared in a federal system.