הילימוד - כלכלה לילדים - פרק 7 | מיסים

What Are Taxes and Why Do We Pay Them?

Introduction to Taxes

• The speaker, Eli, introduces the concept of taxes by posing rhetorical questions about public services and infrastructure that we often take for granted.

• Taxes are described as a collective contribution from citizens to fund state needs, likened to a shared piggy bank where everyone contributes.

Purpose of Taxes

• The funds collected through taxes are essential for maintaining security (military and police), healthcare (hospitals and clinics), education (schools and universities), and infrastructure (roads and street lighting).

• Historically, taxes have existed for thousands of years; before money was used, people paid in goods or labor.

Types of Taxes

• Two main types of taxes are introduced: direct tax (income tax on earnings) and indirect tax (taxes included in purchases).

• Income Tax: A progressive tax where higher earners pay a larger percentage.

• Value Added Tax (VAT): An indirect tax hidden within the price of goods; currently at 18% in Israel.

Additional Tax Information

• Property tax is discussed as a fee paid by homeowners based on property size and location.

• Other forms include corporate taxes on company profits and customs duties on imported goods. All these contribute to the state's revenue pool.

Administration of Taxes

• The government determines tax rates through legislation, with the Israeli Tax Authority responsible for collection ensuring fairness in contributions.

• While some services may seem free at the point of use, they are funded through prior taxation. Thus, nothing is truly free; it’s pre-paid via taxes.

This structured overview provides insights into the fundamental role that taxes play in society while clarifying their historical context, types, purposes, and administration.