According to Kids.gov from the Office of Citizen Services and Innovative Technologies, a person should explain taxes to children by telling kids why taxes are paid. He should explain what types of goods and services are paid with taxes and describe different types of taxes. Children should know that taxes are paid for things that every citizen uses and shares.
Tax money funds public spaces that kids like to visit such as parks and playgrounds. Citizens must pay taxes so that roads can be built and kids can go to public schools, which are also maintained with tax money. Kids must understand that tax money pays for the police department, which is necessary for the protection of society. People with jobs pay income taxes.
Children should know that income taxes are taken out of a worker's paycheck to pay for federal duties such as food inspection, national defense and emergency preparedness. Children may be more familiar with sales taxes. A person should explain to a child that a sales tax is tagged on to the purchases he makes at a store. Each state has its own sales tax, which it uses to fund state services. Adults pay property taxes when they own a house or pay rent. Property taxes are based on the house's value and are reassessed over time.