In this Primerrily piece, we're using Halloween candy to teach the tough truth about taxes.
While Halloween may feel different for your kids this year, it likely won’t taste much different. COVID won’t curb your kids from getting their tiny hands on sweet treats. Want to help moderate that sugar intake, and make it educational at the same time? Primerrily’s got a (tax) plan for you to help your kids pace themselves on post-Halloween candy consumption while learning about taxes.
First, ask your kids to put their candy in a big pile. Encourage them to gaze upon the treasure trove of yumminess they collected. Let them get excited about their stash. Ask them to count how many pieces they have.
Then, ask your kids to imagine that their candy is like money, and you -- the parent -- are going to be like our government. “What’s government?” they’ll ask. After reminding them that mommy and daddy work hard in their jobs to earn money that helps pay for your house, food, clothes, cars, and toys, explain that our government requires people who earn money to pay taxes to pay for many things the public -- our family, neighbors, and people all across our country -- enjoys. Those taxes go to pay for a lot -- roads and bridges, parks, the military, schools, grandma and grandpa’s healthcare, jails, and the needs of people who don’t have jobs, to name a few examples.
Next, decide your kid’s tax bracket! Depending on your preference, you can either use real figures based on your family’s federal tax rate (you can reference federal income tax information at the bottom of this article); or use any simple taxing percentage (e.g. 10%, 25%) for this introductory exercise.
Then, help your kids with the “math.” Take away the percentage of their candy that corresponds to your family’s tax bracket. Tell them, “Now this candy belongs to me. I provide the home you live in, the clothes you wear, and the food you eat.” Watch their mouths gape open as their pile dwindles.
Be clear to your kids that while our votes for lawmakers (kid translation: the line leaders who decide the rules we have to follow) have influence over how much we pay the government in taxes, as citizens we must pay our assigned amount based on those rates decided by our elected officials. If we don't, we are guilty of breaking the law and the consequences can range from having to pay even more money to being sent to prison. (Reassure them that neither of those things will actually happen to them/you). You can explain, basically, that the more money you make, the more you will pay in taxes. So even if you work harder to earn more money -- even if you work harder to collect more candy -- you will still need to pay more money / more candy. At the same time, if you make less money -- or collect fewer pieces of candy -- you will not be required to pay as much in taxes.
Also make note that in addition to having to pay taxes, we choose to give to charities -- like your church, temple, food pantry, or (fill in a civic organization you support). Doing this lets us choose how we want our money to help others, and it also can lessen the taxes we owe to the government, though not completely. To model this, explain to them that for every three pieces of candy they choose to give to someone else, you will give them one piece of ca