Final answer:
Federal and state governments specify amounts of money to be withheld for taxes but do not specify exact records to be maintained (B). Tax withholding is necessary for funding government budgets, which can change due to various factors including policy and unexpected events.
Step-by-step explanation:
The question pertains to what the federal and state governments require in terms of financial withholding. The correct answer is that federal and state governments do not specify the exact records to be maintained, but do specify amounts to be withheld. This is likely in reference to tax withholding from an individual's income. Governments at all levels - federal, state, and local - develop budgets to manage the expected revenue from taxes and other income sources and plan for expenditures. However, these budgets can change due to policy decisions and unforeseen events, which can affect both tax policies and spending priorities.
Furthermore, businesses and corporations are required to generate revenue for the government through various forms of taxation, and employers generally are responsible for withholding the correct tax amounts from their employees' paychecks for federal, state, and local taxes. The collection of these tax revenues funds a large portion of governmental activities, including the provision of services and goods as well as transfers to households and firms. Payroll records collected by state governments and the Social Security Administration are essential for tracking a significant portion of this spending.