Tax bracket

Hi there, young one! Do you know what taxes are? Yes? Great! So, tax bracket is like a way to group people or businesses together based on how much money they make.

Imagine you and your friends are going to a candy store to buy some sweets. And the candy store has different prices for different candies. So, you and your friends will spend different amounts of money depending on what candies you choose. Similarly, when you grow up and start working, you will earn different amounts of money depending on your job and how hard you work.

Now, the government needs money to build roads, provide services, and keep everyone safe. So, the government collects taxes from everyone who earns money. But the government doesn't collect the same amount of taxes from everyone. The amount of taxes you pay depends on how much money you earn.

And that's where tax brackets come in! Each tax bracket has a range of incomes, and if you earn within that range, you will pay a certain percentage of your income in taxes. The more money you earn, the higher tax bracket you are in, and the more taxes you pay.

Let's say your mom and dad are in the 25% tax bracket, which means they pay 25 cents out of each dollar they make in taxes. But your grandpa, who is a millionaire, is in a higher tax bracket and pays 37 cents out of each dollar he makes in taxes.

So, in simple words, tax bracket is a way of dividing people or businesses into groups and figuring out how much taxes each group needs to pay based on their earnings. Does that make sense, champ?