What is Tax? - Lesson for Kids

Instructor: Jennifer Lowery

Jennifer has taught elementary levels K-3 and has master's degrees in elementary education and curriculum/instruction and educational leadership.

While you may be familiar with the idea of taxes, do you know what they are? In this lesson, we will learn what a tax is, how taxes are collected, and ways that tax money is used.

What are Taxes?

Have you ever wondered how schools and parks are built? Or who is in charge of paying for and maintaining roads? In short, you are! That is, if you are old enough to pay taxes. Taxes are ways that the government can collect money from its citizens to pay for things that the people need, like schools and roads.

School buses, textbooks, and buildings are paid for by tax money.
school transportation

The use of taxes has been around for centuries, dating back to the first human civilizations. In ancient Mesopotamia, taxes were paid in the form of animals or goods since formal money had not yet been invented. Over the years, different forms of money were invented, and the collection of taxes continued. Today, taxes are collected in different ways and at various levels of government. Let's find out more about the collection and purpose of taxes.

Federal and State Tax

Let's say that you just got an awesome job working at a video game store. You know that you are making $10 an hour, and you are working ten hours a week after school. Because you're an ace in math class, you know that ten times ten is 100. So, your first paycheck should be $100, right? Unfortunately, you won't actually bring home $100 because the federal and state governments collect taxes from your income, or the amount of money you earn.

Income taxes are collected by the federal government as well as by state governments.

Other Taxes

So, you have a great job, and once you're old enough, you would like to buy a car or a house. Guess what? You are required to pay taxes on those items as well. This type of tax is called property tax, and it is often paid to local governments, like the county of the state where you reside. Once you own a home, every year you are required to pay property tax on that home until you sell it.

The owner of this car and this farm must pay property taxes each year to their local government.

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