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Taxes: fun facts and quiz
The essentials in 7 ideas, with fun facts, an illustrated story and a quiz to see how much you know.
The essentials
Why Taxes Exist
Taxes pay for things we share: schools, hospitals, roads, police and pensions. Governments collect them from income, spending, property and businesses.
Key fact
Taxes have existed since ancient Egypt.
Income Tax
Income tax is taken from what people earn. Many countries take it straight from wages before they’re paid, so workers never see it.
Key fact
Britain introduced income tax in 1799 to pay for wars with France.
Tax Bands
In a progressive system, higher slices of income are taxed at higher rates. Moving into a higher band only raises the rate on the part above the line.
Key fact
A pay rise into a higher band doesn’t shrink your take-home pay.
Taxes on Spending
Many countries add a tax to what you buy, like VAT in Europe or sales tax in the USA. It’s often built into the price you see.
Key fact
Standard VAT rates in the EU run from 17% to 27%.
Tax Returns
A tax return tells the tax office what you earned, so it can check you’ve paid the right amount. You might owe more, or get money back.
Key fact
Keeping records makes tax returns much easier.
No Income Tax
A few places, like the United Arab Emirates and Monaco, have no personal income tax. They raise money in other ways, such as from oil, spending or businesses.
Key fact
No income tax doesn’t mean no taxes at all.
Strange Taxes in History
Some taxes were odd. England taxed windows from 1696, so people bricked them up, and Peter the Great of Russia taxed beards.
Key fact
The window tax lasted until 1851.
Fun facts
Ancient Rome taxed urine collected from public toilets, which tanners used to treat leather.
The first US income tax, in 1861, was meant to be temporary, to pay for the Civil War.
In the 1950s, the top US income tax rate was over 90%.
In the US, sales tax is usually added at the till, so the price on the shelf isn’t what you pay.
UK tax returns are due by 31 January, and thousands of people file theirs on Christmas Day.
Monaco hasn’t charged most residents income tax since 1869.
Britain once taxed hats and wallpaper too.
Story: The Tax They Tried to Burn
The Tax They Tried to Burn
1799. To pay for the war with France, Britain’s Prime Minister William Pitt brings in a new tax on income. People hate it.
When the wars end, Parliament scraps it in 1816 and orders its records destroyed, so it can never return. The papers are pulped and burned.
It didn’t work. Copies survived, and income tax came back in 1842, “for three years”. It has never left.
True or false?
Tap your answer to see if you got it, and why.
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Question 1 of 10
Taxes help pay for public services.
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True. Like schools, hospitals and roads.
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Question 2 of 10
Income tax is often taken directly from wages.
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True. The employer passes it to the tax office.
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Question 3 of 10
Higher slices of income can face higher tax rates.
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True. Each band has its own rate.
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Question 4 of 10
VAT is a tax on spending.
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True. It’s added to the price of goods and services.
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Question 5 of 10
A tax return reports your income to the tax office.
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True. So the right tax can be worked out.
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Question 6 of 10
Some countries have no personal income tax.
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True. Like Monaco and the United Arab Emirates.
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Question 7 of 10
England once taxed windows.
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True. Some bricked-up windows can still be seen today.
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Question 8 of 10
Only businesses pay taxes.
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False. People pay them too, on income and spending.
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Question 9 of 10
Britain’s first income tax paid for building railways.
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False. It paid for wars with France.
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Question 10 of 10
Entering a higher band applies the higher rate to all your income.
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False. Only the part above the threshold is taxed at the higher rate.
Keep going in the app
KnowSoda learns what you know and brings back what you’re about to forget. Taxes has 6 more ideas at the Advanced and Expert levels.
Sources
- OECD — Tax policy and revenue statistics
- HM Revenue & Customs — History of income tax
- European Commission — VAT rates in the EU
- Encyclopaedia Britannica — window tax, Peter the Great’s beard tax
- OECD — Global minimum tax (Pillar Two)
- Encyclopaedia Britannica — Laffer curve, Henry George, Salt March
- HM Treasury — Soft Drinks Industry Levy
