meaning of "individual federal taxes"

[FangFang]

Business English Lesson, Advanced Level

ESL/EFL Test #267 "Business buzzwords: Jack Be Nimble", question 9

Despite the many changes in the tax system, there has been relatively little change in its role as an ......... stabilizer: we estimate that individual federal taxes offset perhaps as much as 8 percent of initial shocks to GDP.

(a) autocratic
(b) automatic
(c) automotive
(d) autonomic

Business English Lesson, Advanced Level

ESL/EFL Test #267 "Business buzzwords: Jack Be Nimble", answer 9

Despite the many changes in the tax system, there has been relatively little change in its role as an automatic stabilizer: we estimate that individual federal taxes offset perhaps as much as 8 percent of initial shocks to GDP.

Correct answer: (b) automatic

Your answer was: correct
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Hi,
I got two questions here.
1) What's the exact meaning of "individual federal taxes"? You mean those people who made money from stock markets must pay the federal taxes?
2) How to understand "initial shocks" to GDP?
I wonder if it tells that the individual federal tax rates are still very high,thanks a lot!

[Mister Micawber]

.
Morning, FF.

1-- 'individual federal taxes' = personal income taxes
2-- I think 'initial shocks' just means radical changes from period to period. The idea is that the income tax system is a buffer against big shifts in GDP. (Sorry, I seldom read the entire texts that I extract these questions from.)
.
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Canadian-American native speaker
who teaches English for a living at Mister Micawber's
ESL cafe: Interview with Mister Micawber