Tax facts for kids

A tax form

A old tax post

Tax is money that people pay to the government. Governments use this money to pay for many important things. For example, taxes help pay for people who work for the government, like soldiers and police officers. They also fund services such as education and health care. Taxes are also used to build and fix things like roads, bridges, and sewers.

Different Kinds of Taxes

There are many different kinds of taxes. They can be direct or indirect.

• Corporate taxes are based on how much money a company earns.
• Income taxes are based on how much money a person earns from their job or other sources.
• Sales taxes are added to the price of things you buy, like clothes or electronics.
• Property taxes are paid on things a person owns, such as houses or land.
• Stamp duties are taxes paid when official documents are approved. For example, when someone buys a house, there is often a stamp duty.
• Inheritance taxes are paid when someone receives money or property after another person dies.

How Taxes Are Calculated

Taxes can also be grouped by how they are calculated:

• Flat taxes: Everyone pays the same percentage of their income or the item's cost. For example, if there's a 10% flat income tax, everyone pays 10% of what they earn.
• Progressive taxes: People who earn more money pay a higher percentage of their income in taxes. This means richer people pay a larger share. Most countries use progressive income taxes.
• Regressive taxes: People who earn less money pay a higher percentage of their income in taxes. Sales taxes are often seen as regressive because people with less money spend a larger part of their income on everyday items.

Paying Many Taxes

People often pay many different taxes. This is because different parts of the government use taxes for different things.

For example, in the United States, the national government has an income tax. Most states also have an income tax or a sales tax, or both. Even cities and towns might have their own sales tax or property tax. So, you might pay taxes to your city, state, and national government all at once!

Taxes in the Past

In ancient times, groups would sometimes attack other places. They would make the people they attacked pay tribute. This meant the attacked people had to pay money or other valuable things. In return, the attackers would stop fighting them. A famous example is the Danegeld. This was when people from Denmark took over part of England and made the English pay thousands of silver coins.

Views on Taxes

Some groups, like anarchists and libertarians, believe that taxes are unfair. They argue that because people have to pay taxes, it is like taking money without their full agreement. They believe people should have more control over their own money.

Images for kids

• 

  Total money from taxes as a share of a country's total economic output in 2017.

• 

  A painting by Pieter Brueghel the Younger called The Tax Collector's Office, from 1640.

• 

  A graph showing how taxes can change what people choose to buy.

• 

  A graph showing how a tax can change how much money people feel they have to spend.

• 

  Egyptian peasants being taken away for not paying taxes during the Pyramid Age.

See also

In Spanish: Impuesto para niños