Planet Money Summer School
Intro Econ 6: Taxes & Donald Duck
Aug 12, 2020
Explore the surprisingly entertaining history of income tax and its purpose. Learn how income tax became a part of the American system through a fascinating story involving wars, a Supreme Court justice, and a famous duck. Discover the historical background of income tax in the United States and the economic implications throughout history. Understand the role of taxes in changing behavior and the importance of a simple tax code. Explore the relationship between tax payment, trust in the government, and the concept of over withholding taxes.
27:41
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Quick takeaways
- Trust in the government plays a crucial role in tax compliance, as seen in countries where low trust leads to low tax payments.
- Taxes are not just a means of raising revenue, but also a tool to influence behavior.
Deep dives
The Evolution of Income Tax
The podcast explores the history and evolution of the income tax in the United States. Initially, taxes were collected through tariffs on imported goods, but the need for revenue during wartime led to the introduction of an income tax. The income tax faced logistical challenges and legal obstacles, but eventually became a significant source of revenue. The tax code became more complex over time, with various deductions and incentives to encourage certain behaviors. The podcast also highlights the importance of trust in the government and the willingness of Americans to pay taxes.
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