Tax Explained with Bananas

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Transcript

00:00

What is tax? Monkey work at banana farm.

Monkey is paid leaves for work. At the end of the week, monkey earns 100 leaves.

Monkey is happy. It ain't much, but it's honest work.

But actually, monkey only receives 80 of those leaves

00:15

because monkey government takes 20 leaves. This is tax.

Basically, it's leaves monkey has to pay to monkey government. Every monkey pays tax in some form, even if they don't particularly want to.

>> What do you mean you get some of my money? This isn't fair.

Ramen didn't die

00:30

for this. >> Why do we pay taxes?

Monkey government needs leaves to run the jungle. They use the leaves collected from tax to fund goods and services for every monkey.

Things like housing, hospitals, schools, police,

00:47

firefighters, military, art galleries, space programs, scientific research, public television, libraries, garbage collection, public transport, and even

01:04

retirement. And monkey government can collect taxes in many different ways because there are many different types of taxes.

Income tax. Monkey government takes leaves straight from monkeykey's paycheck.

Sales tax. Extra leaf charged when monkey buys a banana.

Property tax.

01:21

If monkey buys treehouse, monkey must pay monkey government. Capital gains tax.

If monkey sells treehouse for more leaves than he paid, monkey must pay monkey government. Corporate tax.

Big monkey businesses also give a percentage

01:36

of leaves they earn. Inheritance tax.

Monkey pays tax on leaves monkey inherits. Yay.

A environmental tax. Monkey corporations pay higher tax on items that hurt monkeys environment.

Luxury tax. A tax on expensive items for

01:52

monkeys that can afford more than they need. Tariffs.

A tax on imported goods from other monkey countries. Tax brackets.

So how much tax should monkey pay? Well, it depends on how much monkey earn.

The more monkey earns, the more tax monkey have to pay most of the time.

02:09

These are called tax brackets and they look something like this. But monkeys make a very common mistake when looking at tax brackets.

If monkey make 100,000 leaves, they are taxed 22% or 22,000 leaves. Right?

Wrong. The first 10,000

02:26

leaves monkey earns, monkey pays zero tax. The next 40,000 leaves monkey earns, monkey pays 12% tax or 4,800 leaves.

The last 50,000 leaves monkey earns, monkey pays 22% tax or 11,000

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leaves. So Monkeykey's total tax would be 15,800 leaves, not 22,000.

Monkey only pays 22% tax on that higher bracket, not Monkeyy's entire income. How is tax collected?

If Monkey is an employee, Monkey Government

02:59

automatically deducts leaves from Monkeykey's paycheck. But if Monkey owns a business or is a freelancer, Monkey must tell Monkey Government how many leaves they earned that year so they can tax them the right amount.

Monkeys must prepare and file all this information

03:15

into a tax return. But how do you do a tax return?

It depends on what country Monkey lives and works in, but the basic process is the same. First, Monkey will need to count how many leaves they made that year.

Monkeyy's job should do this for him and send Monkey the total.

03:31

Second, Monkey needs to find out how much tax he has already paid for that year. Monkeykey's job will also keep track of this.

Then finally, the most important step, deductions. These are any workrelated expenses Monkey had to buy for their job.

No, no, no, no, no.

03:46

They they have to be workrelated. You can't claim that.

Give me it. I I said give me it.

Give me it. Deductions can be uniforms, tools, training courses, travel and accommodation for business trips or donations to charities.

Then monkey

04:03

needs to send all this information to the monkey government. They'll look at how many leaves monkey make, how much tax monkey owe, and deduct any workrelated expenses monkey made.

After all these calculations, they'll give Monkey the result. If Monkey has underpaid tax, Monkey will need to pay

04:20

the rest of what they owe. But if monkey has overpaid tax, the monkey government will give them a tax refund.

Tax audit. If monkey makes any suspicious deductions or has extra income they didn't tell monkey government about, monkey may get audited.

A tax audit is

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the monkey government double-checking Monkeyy's information. They usually only do this if something isn't adding up.

Okay, everything looks good here. Nothing out of the ordinary.

Wait a second. What is that?

What? Why is it written so small?

I can barely read that.

04:52

But doing your taxes isn't easy and sometimes monkey just make mistake. Uh here I think it's right.

I forgot to carry the warranty. Please don't send me to prison.

Complete insanity. What happens if you don't pay taxes?

05:09

Nothing. Nothing at all.

First it's a warning. Then they'll charge interest, which means monkey now owes even more.

Then monkey government will try to forcibly take Monkeyy's

05:26

leave. And finally, if monkey still won't pay, monkey government will take Monkey to prison.

In the USA, the tax office is called the IRS or Internal Revenue Silverback Gorilla. In Australia, it's the ATO, the Australian

05:42

Taxation Orangutane. And in the UK, it's the HMRC or Her Majesty's Revenue Capuchin [Music] who doesn't pay taxes.

But there are some monkeys that don't pay taxes like

05:58

unemployed monkeys, employed monkeys that don't earn enough, baby monkeys, monkey charities, monkey religious groups. However, almost every monkey pays some kind of tax at some point.

how rich monkeys avoid high taxes. Rich

06:15

monkeys can do this in many ways. They can own stock, property, or collectibles.

And when they sell it, it's taxed as a capital gain, which is less than income tax. In fact, capital gains tax is only around half as much tax as monkey pays

06:30

working regular monkey job. If monkey owns stock in a company, and that stock pays dividends, these are also taxed less than Monkeyy's income.

Rich monkeys also get tax breaks on investments. This is called negative gearing.

If rich monkey buys a treehouse, then monkey

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rent treehouse to other monkeys. But treehouse cost more leaves than it makes.

Monkey is losing leaves. But that loss can be claimed as a deduction on monkeykey's taxes.

Monkey is hoping value of treehouse goes up in the future and one day he can sell it for more leaves. But meanwhile, he pays less tax

07:02

because of the loss. Taxes in different countries.

Monkey businesses can also set up companies in other countries with little to no taxes. Not all monkey countries pay the same amount of tax.

Some of the highest tax rates in the world are Finland 57%, Japan 55%, and

07:20

Australia 45%. Hang on, I can do an Aussie accent.

Oh yeah, now chuck another shrimp on the barbie. Bloody hell, a dingo stole me, baby.

While some of the lowest taxes in the world are the Cayman Islands, 0%, Dubai, 0%, and Antarctica, 0%. But

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that's mainly because no monkeys live there. History of taxes.

Since the beginning, in the beginning in the Benin, taxes have been controversial. In fact, in the US during the early 1900s, banana tax was a very real issue.

07:52

Importers argued that bananas should be taxed as a necessity and not a luxury. I don't want banana.

Oh, okay then. >> I need banana.

>> You're going to jail. >> And in some parts of history, bananas weren't taxed and were actually used to bribe officials in exchange for special

08:09

tax treatment. How to make tax less scary.

This is not financial advice. Please do not sue Monkey.

If Monkey wants to make taxes easier and avoid accidentally going to prison, Monkey should make a budget and track expenses that could be taxdeductible. But if monkey just wants to eat bananas, monkey

08:26

can hire Monkey tax accountant to help. These monkeys help with tax returns.

And in some cases, their fees are taxdeductible. There are only two guarantees in life, death and taxes and bananas.

[Music]

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Hopefully monkeys now understand tax. If monkey want to learn more about money, check out Monkeyy's other videos.

If Monkey want to support art that isn't godamn AI slot bull, check out Monkey Patreon and get access to behindthescenes content like this.

09:00

[Laughter] It's just great. It's just fun.

>> And remember, apes together strong. [Music]