Taxes and public budgets — Civics, 11–13
Understand why people and businesses contribute money to pay for shared services, and how a budget plans its use.
What taxes and budgets do
When you pay tax, part of your money joins money from many other people and organisations. A public budget is a plan for using that shared pot: for example, on schools, buses or hospitals. Tu cannot choose every expense, but you can ask whether the choices are fair and useful.
Why taxes exist
A town may need a bridge, a fire service or clean water even when no single person could pay for it alone. Taxes solve that coordination problem by collecting smaller contributions for things people use together. Tu may dislike a particular tax, but removing all shared funding would leave essential work without a reliable plan.
A tax on a purchase
A notebook costs €10 before VAT, and the VAT rate is 20%. First calculate 20% of €10: 0.20 × 10 = €2. Then add it: €10 + €2 = €12, the price on the receipt. Tu can check the arithmetic, but the shop usually collects this tax and passes it to the state.
The tax is not the whole price
A common mistake is to think that a €12 receipt means €12 of tax was paid. It feels natural because the tax is visible in the final price, but the €12 contains €10 for the item and €2 of VAT. Tu must separate the original price from the tax before comparing them.
Where you meet it
You meet taxes on receipts, pay slips and the prices of services. You meet budgets when a school decides how to spend a grant, or a town compares the cost of a new crossing with its other needs. Tu can read the figures and ask what was funded, what was left out and why.
Keep exploring
Other languages
Loading MyLeoNes™…