Talking About Tax
Why talk about tax?
It might seem weird and unfair to have to give some of your money away to the government, but taxes help us pay for lots of things, from roads to schools to space rockets. Understanding taxes is an important step toward becoming a responsible, upstanding citizen.
What are taxes?
Taxes are payments we make to governments. Most people give some of their pay to the government via income tax. When we buy something, a portion of the price often goes to the government as a sales tax. There are a few taxes we pay directly, in a one-off, separate payment, such as car tax, which entitles us to drive our car on the road. With the money collected in taxes, the government pays for things we all benefit from or, such as roads, the police, and the army.
Fun Factoids
Taxes have helped catch gangsters. You see, it’s against the law not to pay taxes, and sometimes it’s easier to prove a gangster living a lavish lifestyle hasn’t paid income tax, than it is to prove more serious crimes, such as theft and murder. The famous US gangster Al Capone eventually went to prison thanks to tax evasion.
Taxes can lead to wars and revolutions. The American War of Independence came about when Americans, then ruled over by Great Britain, objected to paying taxes without having anybody representing them in British government.
Some of the earliest taxes weren’t paid for with money, but instead with crops. In ancient Egypt, people were forced to give the Pharaoh a portion of their harvest. Those who couldn’t pay had to work for the Pharaoh for free instead.
Talking to your kids about tax
We love a good chat at RoosterMoney, so here are some ideas to kick start conversations about tax with your child:
A wee bit of tax
Did you know the Romans once taxed urine? You see, human urine contains some useful chemicals. Back in ancient Rome, it was collected from public toilets, and used to help make leather, and whiten cloth. Recognising its worth, two different Roman emperors put a tax on its sale, though some were a little bit put off by this source of income. Would you approve of this tax?
Are taxes good for us?
Sometimes, a government puts a tax on items that do us harm, such as cigarettes and alcohol, in the hope that forcing up prices will stop their use. Does that sound fair? What would you whack a big tax on? What items would you make tax free?
Tax haven
Some countries charge very low taxes, in the hope that big companies will come over and set up offices. Why might that be a good thing? What sort of problems might that cause?
Death and taxes
One of the most controversial taxes a government can have is an inheritance tax. When someone dies, their wealth is often passed onto their children, family members or friends. Inheritance tax takes a bit of that money off for the government. Some say this is unfair, while others believe it’s a good way to spread wealth out a bit, stopping some families from staying rich for generations. What do you think?
Having some fun with it
Try working a game into your chat about tax. It’s a great way to learn!
Tax trackdown
Get a receipt from a recent shopping trip. Can you work out how much tax you guys paid? Remember, not everything is taxed at the same rate. The one with the most accurate calculation gets to win that sum in pocket money
Family tax
Is there something you think you should buy less often? Is there something you should probably buy more often? Then why not set up a family tax (and tax relief) system? Perhaps add a 20% on Robux, and reduce prices by 20% on reading books?
Tax holidays
Pick a country you’d like to live in, then work out if its taxes are good for you - or perhaps, the kind of professional person you’d like to become. Remember some countries are better suited to different careers; Ireland taxes artists pretty leniently, while Switzerland is often seen as a good place to be a banker. Where do you see yourself living?
Tax detectives
Not everyone pays all of their taxes honestly. Sometimes, governments have to send in specially trained accountants to work out how much is owed. Why not role-play this process? One person can pretend to be a sneaky billionaire, and the other a tax collector. Where did that swimming pool come from? How did you afford all those cars? And how about that Caribbean holiday? Switch roles, to see how it feels on both sides of the divide.