Finance: Why Do Taxes Exist?

Why do taxes exist? Without taxes, Uncle Sam wouldn't be able to boss us around via the IRS, which uses taxpayer money to run the government. Those taxes happen at a local level as well, in the form of real estate taxes, state income taxes, and taxes on local sales, cleverly called sales tax.

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Transcript

00:28

right and that makes sense if you drive a car you use the roads more so you

00:33

should pay more for its use that's like a use tax get it cleverly named if for [Price for federal tax per gallon and state tax per gallon]

00:38

when you own a home you'll pay real estate tax and for the most part that

00:41

tax is designated to pay schools all right well but like everything [Hand holding money from real estate tax to pay for schools]

00:45

government related nothing is simple in America the federal government has kind

00:49

of a matching program for schools where they pay for a portion of the education

00:54

cost based on various factors and you don't want us to get into that in the [complicated equation on chalkboard]

00:58

video all right well the largest taxes most people pay are income taxes and

01:02

those generally pay for the government to you know govern us if a couple made a

01:06

hundred grand jointly in California last year they'd pay around thirty [A couple stood together in their home]

01:09

thirty-five grand in taxes that money covers things like shiny new airplanes

01:13

to force the mean countries to play nice in the schoolyard it covers repairs to

01:18

crumbling bridges and tunnels across the country it covers public protective [Bridges crumbling]

01:22

services like police and fire department people

01:24

it covers libraries and public parks, well don't feel like you're getting your

01:28

money's worth these days if you're ever not feeling that you can always move to [Woman chased from a park by a tiger]

01:33

the Ukraine discounts on citizenship they're everywhere