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Teaching kids about Tax: Interactive Blog

I’ve had a number of messages asking if I can write a blog to help kids learn about tax. I have previously written a blog on this topic but it was quite a while ago so I thought I’d write a new one.

This time, I tried a new approach to make what some people might believe to be a ‘boring topic’ a bit more fun for kids (and you). I’ve therefore written an interactive (path finder) story which you can go through with your kids and make decisions along the way.

My daughters really enjoyed it as they got to think of what decisions they wanted to make and learnt the impact of their decisions.

After you’ve read the story below, I’m really keen to hear your thoughts, given that this is something I’m trying for the first time.

PART 1 - Setting the scene

You are travelling on a large ship, with hundreds of other people, as part of a long voyage around the world. After months at sea, you are caught in a massive storm which has altered the direction of the ship. You are completely lost and the ship is badly damaged. Luckily, someone notices an island in the distance. Everyone manages to get off the ship and onto the island just before the ship sinks into the sea.

Once on the island, you notice that the island is deserted. There are just some cows, chickens and pigs. However, there are empty buildings scattered around the island in little villages.

It seems that there are enough empty houses around the island for everyone from the ship to find a home until someone comes to rescue you all.

After months on the island no one has come to the rescue. You are stuck on the island. Eventually, some people start to grow crops and look after the animals for milk, eggs and meat. Others on the island use their skills to fix broken buildings and make clothes.

As there were hundreds of people from the ship with different skills, everyone got together to create a new form of money. This means people could buy food, clothes or pay someone to help them fix something.

Everyone on the island was very happy. It was then that everyone on the island felt that there should be some schools for all the children on the island.

It was decided that YOU were going to be put in charge of opening up a school or schools on the island. The problem is that you don’t have any money to build and run the schools. Therefore you have to find a solution to this problem.

The first problem is to get some money to help build the school(s) and pay the teachers. You have an important decision to make:

Which of the following would you choose?

A - Ask people to donate some money to help build the school(s)

B - Tell everyone on the island that they need to give a certain amount of money to help build the school(s)

If you choose A (ASK) then go to PART 2

If you choose B (TELL) then go to PART 3

PART 2 - Ask people to donate money to help build the school(s)

At first you receive some donations from a few people with money. However, you don’t receive enough money to build enough schools for all the children on the island.

You go out to find out why more people haven’t donated money towards the schools. The reasons they give are:

  • “I don’t have any children so I would rather donate to other things”

  • “I don’t have much money so can’t afford to donate money for schools”

What do you do now?

A - Only build a small school for a few children on the island

B - Tell everyone on the island that they need to give a certain amount of money to help build the school(s)

If you choose A (SMALL SCHOOL) then go to PART 4

If you choose B (TELL) then go to PART 3

PART 3 - Tell everyone on the island that they need to give a certain amount of money to help build the school(s)

As you are in charge and you are telling everyone to pay some money, you have created a ’Tax’ system.

Some people on the island aren’t happy that you have told them that they have to give you some of their money but you now have enough money to build the schools for the children on the island.

Many people feel it is unfair that people with lots of money have to pay the same amount as people with less money. They feel that rich families should pay more than poor families towards the schools.

What do you think?

A - It’s fair to make everyone pay the same amount towards the schools

B - It’s fair to make people with more money pay more towards the schools

If you choose A (EVERYONE PAYS THE SAME) then go to PART 5

If you choose B (RICH PAY MORE) then go to PART 6

PART 4 - Only build a small school for a few children on the island

You build a small school which can only teach a few children on the island. You therefore have to select which children get to go to the school.

First, you allow the children of the people who donated towards the school to attend. This leads to people who couldn’t afford to donate being upset and feeling like their children will never have the opportunities to learn skills which will stop them being poor.

In the end, you decide that you need more money to build more schools. You decide to tell people that they have to pay some money so that you can build more schools.

Go to PART 3

PART 5 - It’s fair to make everyone pay the same amount

The people with lots of money are happy as they get to keep most of their money to live in nice houses and eat nice food.

The people with little money are not happy. They now have less money than before and find it hard to even afford basic meals. In some cases, they don’t send their kids to school as they need their kids to work jobs so that the family can earn more money for food and shelter.

Everyone on the island is not happy about seeing young kids not going to school and asks that you get people with more money to pay more towards schools. Go to PART 6.

PART 6 - It’s fair to make people with more money, pay more

By telling people who earn more money to pay more money (tax) towards the schools, you have created a ‘progressive tax system’.

Whilst some of the families with lots of money are unhappy that they have to pay more, they still have plenty of money left for all the things they need.

The families with less money are happy that they get to keep most of the little money they have and can send their children to school. After years, this education will allow these children to learn new skills and allow them to earn more money in the future.

The next decision is where do you build the schools?

A - build schools based on where most of the children are

B - build schools based on where the money (tax) has come from

If you choose A (based on the children) then go to PART 8

If you choose B (based on where the money has come from) then go to PART 7

PART 7 - Build schools based on where the money has come from

It’s great that all kids get access to education.

In richer parts of the island, the schools have more money so have lots of teachers, small class sizes and lots of books to go around. The children get help when extra help is needed and as a result, they get good grades and lots of opportunities.

On the other side of the island, the kids in the poorer areas of the island are struggling as the school isn’t big enough for them all. They have very large class sizes and limited books. This means their grades are lower and they have less opportunities.

In the end you decide to change the schools so that all kids have the same access to education and resources (if wealthy families want extra resources then they have the means to pay for them). Go to PART 8.

PART 8 - Build schools based on where most children live

The schools are built and every child has access to the same level of education and class sizes are similar everywhere on the island.

Whilst some of the wealthy families feel that the schools close to them should get more of the money, as they paid more, most are happy to see all kids getting an education.

Well done - you have managed to create a system of TAX which helps all kids on the island get an education which can help them have opportunities to earn money when they are older.

Some of the wealthy families are even kind enough to donate copies of the book Grandpa’s Fortune Fables to their local schools so that kids can learn to earn, save and grow their money as they grow up (especially as there is a discount for books donated to schools here). Soon the students are more responsible with their money than in most other places in the world as they don’t teach finance in schools.

The End!


I hope you and your kids found this an interesting way to learn why we have to pay tax at a country level and why some people pay more than others.

The above focuses on education. It’s also important to let kids know that tax is also used to ensure that there are:

  • Hospitals

  • Emergency services

  • Building and maintaining roads

  • Rubbish disposal

  • Libraries

  • Defences (army, navy and airforce)

  • Many more public services

I want kids to learn about tax early on so you can give them a balanced view of tax. If their first experience is when they get their first pay cheque then they could have a negative view which can lead to bad feelings towards money in general. You want your kids to grow up with a positive mindset concerning money.

This is my first attempt at this style of story - I would love to hear your feedback. If you and your kids found this style of story interesting, fun and different then I would be happy to write more for different topics (debt, investing, budgeting etc). Please let me know at

Thanks for reading!


P.s. Tax is one of the topics covered in my book Grandpa’s Fortune Fables. Other topics include earning money, saving money, investing money, as well as debt, scams and gambling. These are topics which all kids should be aware of before they become adults. Get a copy for kids you care about here.


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