Answer:
Once upon a time, you and your sibling, whose name is Lily, went to your favorite store called Toys Emporium. There, Lily found a toy to buy, called a Lego set. It is labeled $3.99, and so Lily brings it to the cashier. The cashier says, “That will be $4.27.” Your sibling removes four one-dollar bills from a pocket and then, finding no more money, starts to cry. Lily turns to you and begins asking questions as you walk away from the counter.
“Why was the label wrong? It said $3.99!”
You respond, “It rang up as $4.27 because of tax. Taxes are money that people have to pay to the government, which uses the money to provide services like education, healthcare, and public safety.”
“Why do we pay taxes? It seems so unfair! Now I can’t have my toy!”
You respond, “We pay them because they help our economy. Taxes support the economy by paying for things like roads, bridges, and public transportation. This helps businesses move goods and people around the country and grow our economy.”
“It doesn’t help me. I shouldn’t have to pay. I’m just a kid.”
You respond, “Even children benefit. When you go to school, you benefit from taxes that pay for your education. Your family benefits when they go to the doctor or hospital and receive healthcare services. Communities benefit from taxes that pay for things like parks, libraries, and community centers.”
“How was I supposed to know all this? I don’t have 27 cents. What do I do now?”
You respond, “What you should do is create your own budget. A budget is a plan for how you will spend your money. To make one, you need to list all your income and expenses, like allowance, birthday money, and other sources of income. Then, list all your expenses, including the cost of the toy you want. After that, you can balance your budget by making sure your expenses don't exceed your income.”
“Will my budget be anything like the government’s budget?”
You respond, “They have similarities and differences. One similarity is that both budgets require careful planning and management. One difference is that the government has many more sources of income and many more expenses to pay for than an individual, which makes it much more complicated to balance their budget.”
Step-by-step explanation: