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What are taxes? What do they do? Why are they needed?
When you buy certain things, the store adds a percentage of money called a sales tax . Sales tax money goes to the state and sometimes to the city or county in which the store is located. The next time you want to buy something, do the following: 1. Add the tax to the price. 2. Check to see if you still have enough money. NOTE: Not every state collects sales tax.
A tax is money that is collected by the government to pay for such services as public schools, roads, fire and police departments, courts, parks, libraries, and more.
The government collects taxes in several ways.
About 300 years ago, Russian ruler Peter the Great made sweeping changes to make Russia a more modern, powerful country. It was a very expensive task and to pay for it, he found unusual ways to tax the Russian people. Among the goods he taxed were hats, boots, chimneys, stamps, basements, and beehives. He taxed things like mustaches and beards. He even taxed birth, marriage, and burial!
Everyone who earns money by working pays a percentage of his earnings to the government in what is called an income tax .
You’ve probably seen a penny many times. Only one of these images of a penny is correct. Which one do you think is it? Compare to a real penny to see if you are right.
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Most of this tax is taken out of a person’s paycheck a little at a time throughout the year. But, once a year, people have to list both the money they have earned and their expenses to see if they paid the right amount of taxes. Income taxes for 2024 are due by April 15, 2025. If, when preparing your taxes, you find out you have not paid enough taxes, you need to pay the government what you owe for the previous year. If you discover that you have paid too much in taxes, the government will send you a refund.
Each county collects taxes on the land, buildings, and homes people own. The taxes collected from property owners pays for government services. Standards Link: Social Studies: Students demonstrate an understanding of the economy.
© Vicki Whiting April 2025
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