A couple of summers ago, my teenage daughter Jessamyn took a major step toward adulthood--she got her first job.

Yeehaw!

Movies on her own! Dinners with her friends! Shopping sprees!

Along with her working-world debut, Jessamyn took another major step toward adulthood. She discovered that she had to pay taxes.

"Me?" she blinked.

I knew how she felt. "Yes, Jessy. Everyone who earns money."

"But--one hundred fifty dollars? I already spent the money! I thought income taxes were only for people who make ... well--thousands."

"Income taxes, yes, but there are other taxes--like payroll taxes, for example."

She was baffled.

"Payroll taxes? Income taxes? What's the diff?"
"Well," I tried to explain. "Income tax applies to all types of income. A payroll tax only applies to what your boss gives you."

"I fail to see the difference," she said, rather icily.

"Well, you can get income from lots of different sources, not just wages. You can get money from interest, from rent ..."

"Oh, like I own houses."

"From stock dividends, from selling your stocks at a profit ..."

"What stocks?"

"Okay, try it this way. Income taxes pay for just any old government expense--you know: battleships, bridges, grants to scientists, the president's salary. Payroll taxes are mainly used for social insurance programs, like Medicare and social security. And here's another difference: Income taxes are entirely your obligation. With payroll taxes, your boss pays half."

"Phew! So I only owe seventy-five dollars?"

"No. He paid his hundred and fifty. Now it's your turn."

"Bummer!"

"And there's another difference," I explained. "With income taxes, the more you earn, the higher your tax rate. No matter how much you earn, you keep getting taxed. With payroll taxes the rate never changes, and--depending on the tax--there's an upper limit on what gets taxed. In 2001, for example, it is $80,400."

"Great," said Jessamyn. "But at least there's a limit."

"Not quite: The limit goes up a little every year. And when you add in other taxes ..."

"Other taxes? What other taxes?"
"Ah, there are so many kinds! For example, California has an income tax. Also, it collects a tax to pay for state disability insurance. Plus, if you travel, there's an airport tax. If you make a phone call, there's a phone tax. If you drive a car, there's a vehicle tax. If you hunt or fish, you have to buy a license. If you cross a bridge, there's often a toll. Not to mention local taxes. Even cities sometimes levy income taxes. Plus, it's not just individuals who pay. Corporations have to pay corporate taxes. And all businesses, incorporated or not, have to shell out for business licenses, permits, things like that. Taxes are just a part of the cost of doing business."

"I know: I'll quit my job," Jessy decided. "I'll live off my allowance. I'll avoid taxes altogether."

"Actually, no. You won't."

"They're taxing allowances now?"

"No, but there are sales taxes. Or maybe we should call them 'buy-taxes.' Some states--like Oregon--don't have them, but lots do. In California, for example, every time you buy something, you pay 7.25 percent extra in state sales tax."

"Okay, I get it now. Every time money moves, it gets taxed."

"It doesn't have to move. I haven't noticed our house moving recently, but we pay a property tax on it every year. Oh, and did I mention excise taxes?"

"I wish you wouldn't," said Jessy.

"That's a special kind of sales tax," I explained. "Excise taxes only apply to certain goods or services--oftentimes things you might want but don't really need. Like yachts and diamonds and liquor."

"Rats. I was going to buy a yacht with my allowance next week. Oh well--can I borrow the car? I promise to fill up the tank."

"There's a good example: You'll pay an excise tax on the gasoline."

"What?! Since when is gas a luxury? What're we supposed to do, use skateboards?"

"Excise taxes aren't always on luxuries. In ancient Egypt, at one time, there was a tax on oil."

"Ancient Egyptians drove cars? What did the pharaoh have--a limo?"

"Not that kind of oil. Cooking oil. And the pharaoh had special officials who went door-to-door, checking to make sure people were using it. No grilling! And you couldn't do something sneaky like cook meat and then use the grease to cook something else."

"Why are taxes so complicated?" Jessy scratched her head. "Why don't they just figure out how much is needed, divide it by the number of people, and charge each person just one tax?"

"Well, in 1996 federal, state, and local authorities collected $1,533,453,000,000 in tax revenues. Divide that by the estimated U.S. population at that time (266,398,000) and you get $5,756.25 for every man, woman, and child."

"Okay. Maybe leave the children out of it," she allowed.

"Some people are sick and can't work."

"Okay, them too ..."

"Some are jobless, some are homeless ..."

"Okay, them too. And the teenagers too."

"Taxes aren't just about raising money, you know. They're also about pressuring people to behave in certain ways. For example, when we bought this car, we paid a tariff, which is a tax on imports. One reason there are tariffs is to make imported products more expensive, so that people will want to buy products made in this country. It's a way to help out the home team. And cigarette taxes: They're supposed to make smoking less attractive, in case the threat of lung cancer isn't enough. If the government decides video games are bad for kids, they could slap a tax on video game parlors."

"That would be like taxing fun!

"Can they tax fun?"
"It's been done before. During the Civil War, right here in America, there was a tax on bowling alleys. You're lucky they don't have a tax for dying your hair orange."

"But that's a fashion statement." Jessamyn touched her short, bright hair.

"Can they tax fashion statements?"
"It's been done before. When Peter the Great was tsar of Russia he taxed men for wearing beards, because he thought it made them look old-fashioned. Mark my words, someday there will be a tax on piercings: Wear as many nose rings as you've got the nostrils for, but you'll have to pay."

"What other kinds of crazy taxes have there been?"
"Well, people have been taxed for their beliefs. In the first Islamic empire, for example--contrary to the myth--no one was 'converted with the sword.' No one was harangued by preachers, or even asked to convert. However, Muslims were tax exempt. Everyone else had to pay. It took about one generation for almost everyone in the empire to become Muslim."

"They might as well invent a tax for just existing!"
"They have. It's called a poll tax. That's a tax on everyone who fits a certain profile, no matter what their circumstances or ability to pay. In ancient Athens, everyone whose parents weren't born in Athens had to pay a tax. Slaves had to a pay a tax. England passed a poll tax in 1990 that levied a fixed tax on everyone, regardless of income. It was so unpopular that Margaret Thatcher, who was prime minister at the time, got voted out of office."

"Is death the only way to avoid taxes?"
"Well, actually ..."

"No. Don't tell me."

"Yes. In Afghanistan, in my grandfather's time, there was a tax on being dead. I'm not talking about an estate tax, which is a tax on everything you own at the time of your death. And it had nothing to do with inheritance taxes, which is when the government taxes the dead person's stuff again after it passes to his or her heirs. This tax was just for being dead. If you died, even if you were penniless, you owed money. Of course, your relatives were the ones who had to pay. So when people died, their relatives would sometimes hide the body for weeks or months and say, 'Oh, him? He's, uh, traveling. Yeah, that's it--traveling. Don't know when he'll be back.'"

"So it's true--taxes really do influence behavior."

"Yes, but not always in the ways you expect."