Taxes: Why You Pay Them and What They Do for You
We’ve all heard the groans when someone mentions taxes. But taxes aren’t just money taken out of your paycheck—they’re how we fund schools, build roads, and pay for essential public services. Understanding why we pay taxes and how they’re used can help you see them not as a burden, but as an investment in your community and future.
What Are Taxes, Anyway?
Taxes are mandatory payments you make to the government. They come in different forms, like income taxes, property taxes, and sales taxes. For most of us, income taxes are the ones we notice the most because they’re taken directly from our paychecks. But where does that money go?
What Do Taxes Pay For?
Taxes fund the programs and services we use every day, called Public Services. Even if you don’t realize it, you’re probably benefiting from tax-funded services every day. Here are a few ways taxes might already be helping you:
Education: Your local schools, teachers’ salaries, and even public libraries are funded by taxes.
Emergency Services: Police, fire departments, and disaster relief are paid for through tax revenue.
Infrastructure: Think roads, bridges, and public transportation—all built and maintained with tax dollars.
Healthcare: Programs like Medicaid and public health initiatives rely on taxes to help people in need.
Defense and Safety: The military and national security efforts are funded by federal taxes.
They fund things we often take for granted that make our lives easier, safer, or more fulfilling. It may be disappointing to not get all of the money you work for, but you’re contributing to the systems that make these benefits possible.
Imagine a world Without Taxes
Imagine a world with no taxes. Schools wouldn’t have funding, streets wouldn’t get repaired, and emergency services might not respond when you need them. Taxes make sure the services we rely on are available to everyone, no matter their income or background.
Here are a few things that may happen:
People who have fires may not have access to enough water to put the fires out without fire hydrants, fire trucks, or specially trained firefighters. They may lose their homes, belongings, family members, or more.
Children may have less opportunities to let out some steam on the playground if the funding for public parks disappears.
If you live in an area with a river, your vehicle may take a swim without the proper funding to maintain bridges.
Who Pays Taxes?
It might feel like taxes are just for people in suits with full-time jobs, but most people contribute to taxes in some way. If you have a part-time job, you’re already paying income tax. Even when you buy something as simple as a soda or a video game, you’re paying sales tax.
Understanding who pays taxes—and how much—can help you see how different income levels and types of spending contribute to public funding. For example:
People with higher incomes pay a larger percentage of their earnings in federal taxes.
Businesses also pay taxes, which fund public services that benefit their employees and customers.
Taxes are a shared responsibility that connects everyone, no matter their background or job.
What You Can Do to get comfortable with taxes
Here are a few tips to get more comfortable with taxes:
Learn to Read Your Paycheck: When you get your first job, look at your pay stub. It will show you how much money was withheld for taxes and what’s left as your “take-home” pay.
Understand Deductions: Many tax-funded programs, like Social Security and Medicare, directly impact your future. It’s good to know what these deductions mean.
File Taxes Early: Once you start earning enough to file taxes, plan ahead. Filing early means you can avoid last-minute stress and even receive your tax refund faster.
This article coincides with the 2021 National Standards for Personal Financial Education Earning Income Objective 4-7
