What are Taxes? (…and Why do I have to Pay Them?)

Nobody likes to pay taxes but they are important Nobody likes to pay taxes but they are important. Governments need taxes to survive. And if no one paid taxes, governments would not have any money.

Copyright Right Brain Curriculum Let’s talk a little bit about what taxes are and what governments use tax money for…

Copyright Right Brain Curriculum There are things that everybody in a city or state or country needs but which are too expensive for any one person to build. For instance, we needs roads to drive on and bridges to go across our rivers.

Copyright Right Brain Curriculum We need police officers to keep us safe and fire fighters to be there in case a fire breaks out. We need people to collect the trash and electricity in our homes.

Copyright Right Brain Curriculum So we have a government that hires police officers, buys fire fighting equipment, builds roads, builds bridges and does a lot of other things too. The only problem is all of those things are very EXPENSIVE!

Copyright Right Brain Curriculum So where does the government get the money to pay for all the things that it does? From taxes!

Copyright Right Brain Curriculum There are many different type of taxes and many different types of governments. For instance, you have your local city government which runs the police force and fire station and collects the garbage. You pay local taxes to that government.

Copyright Right Brain Curriculum There is also a state government which builds roads, bridges, universities and many other things between cities.

Copyright Right Brain Curriculum There is also a national (or federal) government which runs the post office, builds big highways that go across the country, pays for health care and medicine and runs the army and navy.

Copyright Right Brain Curriculum Adults have to pay taxes to all of these groups…the local government, state government and federal government. That’s a lot of taxes!

Copyright Right Brain Curriculum There are also many different types of taxes. For instance, there is a tax on things you buy. This is called a sales tax.

Copyright Right Brain Curriculum For instance, if you bought a hammer for $10, you might have to pay an extra 50 cents in taxes.  You would pay $10.50 to the store and they would send the 50 extra cents to the government.

Copyright Right Brain Curriculum But if you bought a hot tub for $1,000, you might have to pay $50 in sales tax!

Copyright Right Brain Curriculum There are some things you can buy that you don’t have to pay taxes on. For instance, you don’t have to pay taxes on food in a grocery store because the government says you need food to eat.

Copyright Right Brain Curriculum There is another type of tax called an INCOME TAX. When you make money from your job, you have to pay taxes to the government. For instance, if you made $75,000 dollars for working for the year, you might have to pay $20,000 of it to the government!

Copyright Right Brain Curriculum Sometimes people also have to pay taxes on property or land that they own. And businesses also have to pay taxes. There are a lot of different type of taxes. In fact, some people think we pay too many taxes.

Copyright Right Brain Curriculum Candidates running for office as senators, presidents, mayors and other positions tend to argue a lot about taxes. One question they argue about is, who should pay taxes and how much?

Copyright Right Brain Curriculum Generally, rich people have to not only pay more money in taxes, but they to pay a bigger percentage as well. For instance, a rich person might have to pay 30% of their money made to the government while a poorer person might only have to pay 15%.

Copyright Right Brain Curriculum Some people think this is fair because rich people can afford to pay. Other people think it’s not fair because rich people earned that extra money. If you make very little money for the year, you may not have to pay any taxes at all.

Copyright Right Brain Curriculum Some candidates have also argued for something called a “flat tax.” This would mean that everyone in the country pays the exact same rate of 15% taxes each year.

Copyright Right Brain Curriculum But even people who think taxes are too high have to pay their taxes. Every year each adult in the United States has to “file” their taxes with the government. They have to tell the government all the money they made from their work.

Copyright Right Brain Curriculum Then each adult sends their tax money to a government group called Internal Revenue Service or IRS. They have to send it in by April 15th.

Copyright Right Brain Curriculum If you don’t pay your taxes you can be in big trouble with the IRS. You might even go to jail!

Copyright Right Brain Curriculum The money that comes into the government from all its citizens paying taxes is called REVENUE. There is not only a lot of debate about how high taxes should be, there is also debate about what the government should use the revenues for.

Copyright Right Brain Curriculum There are many questions: Should we spend more or less on paying for people’s health care? Should we spend more or less to build a big military?

Copyright Right Brain Curriculum Should we spend more money to build great schools for kids? Should we spend more to help out poor people or people without homes?

Copyright Right Brain Curriculum Should we spend more for building parks or roads or bridges? What about police officers or fire fighters?

Copyright Right Brain Curriculum And then there are some people who say we shouldn’t have government spend money on most of these things at all. They say charities and businesses do a better job than government in doing these things.

Copyright Right Brain Curriculum Who you vote for often depends on which candidate agrees with you on how to spend the government’s money.

Copyright Right Brain Curriculum We have some important decisions to make about how much we charge in taxes and how much each person has to pay.

Copyright Right Brain Curriculum Remember that if your government doesn’t raise revenue from taxes, it will be hard to build anything.

But if you tax the people too much, they might get angry! Copyright Right Brain Curriculum But if you tax the people too much, they might get angry!