Curious About Taxes

PODCAST 230: CURIOUS ABOUT TAXES

RELEASE DATE: SUNDAY, FEBRUARY 26TH, 2023

D:  HELLO, AND WELCOME BACK TO THE CURIOUS KID PODCAST.  HAS ANYONE EVER ASKED YOU WHAT YOUR FAVORITE SEASON IS?  MY FAVORITE SEASON IS FALL.  I LOVE THE BEAUTIFUL FALL WEATHER, I LOVE THE FALL HOLIDAYS LIKE HALLOWEEN AND THANKSGIVING, AND I ALSO ENJOY WATCHING THE COLORFUL LEAVES IN THE FALL.  HAS ANYONE EVER ASKED YOU WHAT YOUR LEAST FAVORITE SEASON IS?  WELL, MINE ISN’T THE WINTER, OR EVEN THE SPRING OR SUMMER.  MY LEAST FAVORITE SEASON IS TAX SEASON.  TAX SEASON HAS ALREADY STARTED, AND IT USUALLY RUNS UNTIL ABOUT APRIL 15TH.  THIS YEAR, THE TAX DEADLINE IN THE UNITED STATES IS ACTUALLY APRIL 18TH.  WHAT ARE TAXES?  LET’S LEARN ALL ABOUT IT.

O:  MAILBAG!

D:  MAILBAG!

*** VM FROM ELLA OF CHICAGO, ILLINOIS***

O:  THANK YOU SO MUCH FOR THAT INCREDIBLE VOICEMAIL, ELLA.  WE CAN’T WAIT TO LEARN MORE ABOUT TAXES FOR YOU THIS WEEK.

D:  TAXES AREN’T USUALLY SOMETHING THAT MOST KIDS HAVE TO THINK ABOUT, BUT THEY ARE REALLY IMPORTANT, AND THEY IMPACT ALL OF US EVERY DAY.  ONE OF THE REASONS WHY GROWN UPS DON’T LIKE TAXES IS THAT THEY TAKE SO LONG TO COMPLETE.  

O:  THE QUESTION OF THE WEEK IS, HOW LONG DID THE AVERAGE AMERICAN SPEND DOING THEIR TAXES LAST YEAR?

D:  WHILE YOU’RE THINKING ABOUT THE ANSWER, LET’S START LEARNING WHAT TAXES ARE.

O:  TAXES ARE MANDATORY FEES THAT PEOPLE NEED TO PAY TO THE GOVERNMENT.  ALMOST EVERY PERSON OR BUSINESS THAT MAKES MONEY NEEDS TO PAY TAXES.

D:  HAVE YOU EVER GONE SHOPPING AND PAID CLOSE ATTENTION TO WHAT HAPPENED AT THE REGISTER DURING CHECK OUT?

O:  LET’S SAY YOU WANTED TO BUY SOMETHING THAT WAS LABELED AS $20 IN A STORE.  IF YOU ONLY HAD A $20 BILL WITH YOU, AND YOU TRIED TO BUY THAT ITEM, YOU MIGHT RUN INTO A PROBLEM.

D:  CHANCES ARE, WHEN YOU ARE RUNG UP AT THE REGISTER, THAT THE ITEM WILL ACTUALLY COST YOU MORE THAN $20.  THAT’S BECAUSE OF SOMETHING CALLED A SALES TAX.  HERE IN NEW JERSEY, WHERE WE LIVE, THE SALES TAX IS 6.625%.  

O:  THAT MEANS THAT THE $20 ITEM YOU WANTED TO PURCHASE WILL ACTUALLY END UP COSTING YOU $21.33.  THAT EXTRA $1.33 GOES TO THE GOVERNMENT.  WHY DOES THE GOVERNMENT NEED ALL THAT MONEY?

D:  THE GOVERNMENT USES TAX MONEY TO HELP FUND PROJECTS THAT ARE SUPPOSED TO BENEFIT THE COMMUNITY.  IN THE EXAMPLE OF SALES TAX, THE MONEY GOES TO OUR LOCAL AND STATE GOVERNMENTS.  

O:  THAT MEANS THAT THE MONEY THAT WE SPEND ON SALES TAX GOES TO BUILDING AND OPERATING OUR SCHOOLS AND LIBRARIES, FUNDING OUR FIRE AND POLICE DEPARTMENTS, AND MAINTAINING OUR ROADS AND BRIDGES.  THOSE ARE ALL REALLY IMPORTANT THINGS.

D:  I AGREE.  SO, IF OUR TOWNSHIP WANTED TO RENOVATE YOUR SCHOOL, THEY WOULDN’T NEED TO GO AROUND AND COLLECT MONEY FROM EVERYONE IN THE AREA, BECAUSE THEY RECEIVE A CONSTANT FLOW OF MONEY FROM SALES TAX.      

O:  SALES TAX IS JUST ONE TYPE OF TAX, AND IT IS PAID BY THE BUYER AT THE TIME OF PURCHASE.  ANOTHER COMMON TAX IS CALLED INCOME TAX.

D:  INCOME TAX IS A TAX ON THE MONEY YOU MAKE DOING YOUR JOB.  I’M A PHARMACIST, AND THE PHARMACY I WORK FOR PAYS ME FOR THE WORK THAT I DO.  WHEN I GET PAID, A PERCENTAGE OF WHAT I EARN IS TAKEN OUT OF MY PAY BECAUSE OF SOMETHING CALLED AN INCOME TAX.

O:  IN THE UNITED STATES, THE MORE SOMEONE MAKES, THE HIGHER PERCENTAGE THEY WILL PAY IN INCOME TAX.

D:  THE MONEY FROM INCOME TAX GOES TO THE FEDERAL GOVERNMENT.  INSTEAD OF PAYING FOR LOCAL PROJECTS LIKE SCHOOLS AND POLICE, THE MONEY FROM INCOME TAX PAYS FOR NATIONAL PROJECTS, LIKE FUNDING THE MILITARY AND PROVIDING HEALTH CARE TO PEOPLE WHO CAN’T AFFORD IT.  

O:  THERE ARE LOTS OF DIFFERENT TYPES OF TAXES IN ADDITION TO SALES TAX AND INCOME TAX.  

D:  FOR EXAMPLE, THERE ARE PROPERTY TAXES FOR PEOPLE WHO OWN PROPERTY, LIKE A HOUSE.  THE PROPERTY TAX IS USUALLY A PERCENTAGE OF THE VALUE OF THE HOUSE.  MONEY COLLECTED BY THE GOVERNMENT FROM PROPERTY TAX HELPS FUND PUBLIC SCHOOLS AND PAY TEACHERS AND OTHER SCHOOL STAFF.

O:  EVEN THOUGH SOME TAXES ARE PAID THROUGHOUT THE YEAR, MOST TAXES ARE PAID DURING TAX SEASON LEADING UP TO THE TAX DEADLINE, WHICH IS APRIL 18TH THIS YEAR.  

D:  EVEN THOUGH PEOPLE AREN’T THRILLED WHEN SO MUCH OF THEIR HARD EARNED MONEY ENDS UP GOING TO TAXES, MOST OF THE THINGS THAT OUR TAXES HELP PAY FOR ARE ABSOLUTELY CRITICAL.

O:  PEOPLE HAVE BEEN PAYING TAXES FOR THOUSANDS OF YEARS, AND FOR A VARIETY OF REASONS.

D:  THE FIRST RECORDED TAXES TOOK PLACE ABOUT 5,000 YEARS AGO IN ANCIENT EGYPT.  THE PHARAOH COLLECTED 20% OF EVERYONE’S CROPS.  

O:  BACK THEN, EGYPT DIDN’T HAVE MONEY THE WAY WE HAVE MONEY TODAY.  THERE WERE NO BILLS OR COINS TO REPRESENT A MONEY VALUE.  A PERSON’S WEALTH OFTEN CAME FROM THE CROPS THEY GREW, LIKE GRAIN.  THAT’S WHY THE PHARAOH COLLECTED 20% OF EVERYONE’S CROPS AS A TAX.  

D:  SALES TAX STARTED WITH JULIUS CAESAR IN ANCIENT ROME.  IT WAS A 1% TAX ON ANYTHING IN THE ENTIRE ROMAN EMPIRE.  INCOME TAXES STARTED WITH ROMAN EMPEROR AUGUSTUS OVER 2,000 YEARS AGO.  PROPERTY TAXES WERE PAID BY CITIZENS OF ANCIENT CHINA, EGYPT, AND PERSIA.

O:  TAXES DIDN’T START IN THE UNITED STATES UNTIL THE 1760’S.  THE TAXES, WHICH WERE COLLECTED FROM AMERICAN CITIZENS FOR THE BRITISH GOVERNMENT, WERE VERY UNPOPULAR AND WOULD LEAD TO THE AMERICAN REVOLUTION, WHEN AMERICA WOULD GAIN IT’S INDEPENDENCE FROM BRITISH RULE.        

D:  ONE FAMOUS HISTORICAL EVENT YOU ARE LIKELY TO LEARN ABOUT IN SCHOOL THAT INVOLVES TAXES WAS CALLED THE BOSTON TEA PARTY.  IN THE 1760’S, ENGLAND WAS IN LOTS OF DEBT, MEANING THAT THEY OWED LOTS OF MONEY.  IN ORDER TO HELP BRING IN SOME MONEY, THEY ADDED TAXES TO A LOT OF THINGS THAT AMERICANS NEED.  AT THE TIME, ENGLAND RULED THE AMERICAN COLONIES, SO THEY FELT LIKE THEY WERE JUSTIFIED FOR ADDING TAXES ON AMERICAN GOODS.  

O:  THERE WAS THE STAMP ACT OF 1765, WHICH TAXED ALMOST EVERY PIECE OF PRINTED PAPER, INCLUDING NEWSPAPERS, AND EVEN PLAYING CARDS.  

D:  THEN, THERE WAS THE TOWNSHEND ACTS OF 1767, WHICH TAXED THINGS LIKE GLASS, LEAD, PAINT, AND THE MOST POPULAR BEVERAGE OF THE TIME, TEA.  

O:  AMERICAN COLONISTS WERE FURIOUS, BECAUSE THEY DIDN’T THINK THAT ENGLAND HAD THE RIGHT TO TAX THEM.

D:  WHAT THEY WERE UPSET ABOUT WAS SOMETHING THAT THEY CALLED “TAXATION WITHOUT REPRESENTATION”.  IT SOUNDS PRETTY COMPLICATED, BUT IT’S ACTUALLY PRETTY SIMPLE.  THESE DAYS, IN ORDER TO MAKE CHANGES TO OUR TAX LAWS, THE GOVERNMENT NEEDS TO MAKE THOSE CHANGES.  WE VOTE FOR OUR GOVERNMENT REPRESENTATIVES ON ELECTION DAY, WHICH MEANS THAT WE HAVE SOME SAY IN OUR TAXES, OR MORE SPECIFICALLY, WE HELP DECIDE WHO IS GOING TO MAKE THOSE IMPORTANT DECISIONS ABOUT TAXES.  THAT MEANS THAT WE HAVE REPRESENTATION, IN OTHER WORDS, WE CONTROL WHO REPRESENTS US IN MAKING TAX DECISIONS. 

O:  BACK THEN, THE COLONISTS WERE UPSET BECAUSE THE BRITISH GOVERNMENT WAS MAKING DECISIONS ABOUT TAXING AMERICANS, AND AMERICANS DIDN’T HAVE ANY CONTROL IN DECIDING WHO WAS GOING TO BE MAKING THOSE DECISIONS.  

D:  THIS LED TO SOMETHING CALLED THE BOSTON TEA PARTY.  BRITAIN ENDED SOME OF THE TAXES THEY HAD UNFAIRLY GIVEN TO AMERICANS, BUT THEY KEPT A TAX ON TEA.  THEY DIDN’T WANT TO LOSE ALL OF THE MONEY THEY WERE MAKING ON THE 1.2 MILLION POUNDS OF TEA THAT THE COLONISTS ENJOYED EVERY YEAR.  

O:  THE BOSTON TEA PARTY TOOK PLACE ON DECEMBER 16TH, 1773.  THAT NIGHT, A LARGE GROUP OF COLONISTS THREW 342 CHESTS OF TEA INTO THE BOSTON HARBOR.  

D:  THAT TEA WAS BEING IMPORTED FROM OVERSEAS, AND WAS SUPPOSED TO EVENTUALLY BE SOLD IN THE UNITED STATES WITH A TAX.  INSTEAD, MORE THAN ONE HUNDRED COLONISTS SPENT THREE HOURS EMPTYING 342 CHESTS OF TEA INTO THE WATER OF BOSTON HARBOR.  IN TOTAL, ABOUT 90,000 POUNDS OF TEA WERE RUINED.  THEY DID THIS TO SHOW HOW UNHAPPY THEY WERE THAT IMPORTED TEA WAS BEING TAXED.  

O:  OTHER TEA DUMPING PROTESTS SOON FOLLOWED IN OTHER STATES LIKE MARYLAND, NEW YORK, AND SOUTH CAROLINA.  JUST A FEW YEARS AFTER THE EVENTS OF THE BOSTON TEA PARTY, THE UNITED STATES WOULD GAIN IT’S INDEPENDENCE, AND THE RIGHT TO MAKE IT’S OWN RULES REGARDING TAXES.  

D:  BEFORE WE ANSWER THE QUESTION OF THE WEEK, HERE ARE SOME STRAGE TAX LAWS WE DISCOVERED WHEN DOING RESEARCH FOR THIS EPISODE.

O:  NEW YORK HAS AN 8 CENT TAX ON EACH BAGEL SOLD THAT IS SLICED OR TOASTED.

D:  THERE IS SOMETHING CALLED A JOCK TAX, WHICH IS A TAX ON ATHLETES THAT PLAY IN DIFFERENT CITIES AND STATES.  IT STARTED IN 1991, WHEN CALIFORNIA STARTED TAXING CHICAGO BULLS PLAYERS FOR GAMES THAT THE BULLS PLAYED IN CALIFORNIA THAT YEAR.  THEY WERE PROBABLY BITTER BECAUSE THE BULLS BEAT THE LAKERS IN THE FINALS IN FIVE GAMES THAT YEAR.  ILLINOIS THOUGHT IT WAS A GOOD IDEA, AND SOON ADDED THEIR OWN JOCK TAX.  THESE DAYS, ALMOST EVERY OTHER STATE HAS ADDED THEIR OWN VERSION OF A JOCK TAX.

O:  MANY PLACES NOW HAVE A SODA TAX.  IN THE UNITED STATES, THE SODA TAX STARTED IN BERKELEY, CALIFORNIA IN 2015.  SINCE THEN, MANY OTHER PARTS OF THE COUNTRY HAVE ADAPTED A SODA TAX.  A SODA TAX ALSO EXISTS IN OVER 50 COUNTRIES.  THE TAX IS INTENDED TO RAISE THE PRICE OF SODA, WHICH IS SUPPOSED TO LIMIT THE AMOUNT OF SODA PEOPLE DRINK.  

D:  IN THE UNITED KINGDOM, EVERYONE UNDER 75 YEARS OLD PAYS A TV LICENSE FEE.  THE FEE PAYS FOR STATE RUN RADIO, NEWSPAPERS, AND TV NETWORKS.  ANYONE WHO IS LEGALLY BLIND IS ONLY REQUIRED TO PAY HALF OF THE FEE.  

O:  PETER THE GREAT OF RUSSIA ONCE TAXED ALL SORTS OF THINGS, INCLUDING BEARDS! 

D:  ALRIGHT OLIVIA, AMERICANS SPEND LOTS OF TIME PREPARING TO DO THEIR TAXES.  AMERICANS KEEP RECORDS, DO ALL SORTS OF TAX PLANNING, AND FILL OUT FORMS BEFORE THE TAX DEADLINE.  HOW MUCH TIME DOES THE AVERAGE AMERICAN SPEND DOING THEIR TAXES EVERY YEAR?

O:  THE AVERAGE AMERICAN WILL SPEND ABOUT 13 HOURS COMPLETING THEIR TAXES.  THAT MEANS THAT AMERICANS SPEND OVER 6 BILLION HOURS A YEAR DOING THEIR TAXES.     

D:  THAT’S A LOT OF TIME SPENT ON DOING SOMETHING THAT ISN’T MUCH FUN.  WELL, THAT’S A WRAP FOR THIS WEEK’S EPISODE.

O:  230 - TAXES.

D:  GREAT JOB OLIVIA, AND GREAT JOB ELLA FOR THE EPISODE TOPIC SUGGESTION THAT OUR LISTENERS CAN LISTEN TO TAX FREE.  JOIN US NEXT WEEK, WHEN WE WILL GET CURIOUS ABOUT ROCKETS FOR LISTENERS IN FLORIDA, TEXAS, AND CANADA.  AS ALWAYS, THANK YOU SO MUCH FOR LISTENING AND GETTING CURIOUS WITH US.