Does everyone pay the same amount of tax? Tax rates and the basic tax-free allowance
No, not everyone pays the same. In Germany, the more you earn, the more you pay, and not just more euros but a bigger share of what you earn. That’s called a progressive tax rate. If you earn only a little in a year, you pay no income tax at all, because up to a certain limit, the basic tax-free allowance (Grundfreibetrag), your money stays tax-free. So no tax office is going to come knocking over the €11.70 from the lemonade stand.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
How the guinea pigs explain it in Volume 1: Wer kassiert mit? (Who Takes a Cut?)
Does everyone pay the same amount of tax?
No. That’s exactly what Toffy wants to know, and Mr. Grey explains: in Germany, the more you earn, the more you pay. It’s called a progressive tax rate, rising step by step, like on a scale. Politicians are still arguing about whether that’s fair. Mojito’s take: Fairness questions rarely have just one answer.
Do kids have to pay taxes on a lemonade stand?
Not on the €11.70 from the stand. In Germany, you only pay income tax once you earn more in a year than a certain limit, the basic tax-free allowance (Grundfreibetrag). No tax office is knocking on that door, says Rocky. Mojito adds one more thing: When you have a real company one day, the taxes will come. And then it’s good if you already know how it all works.
- The more you earn, the more tax you pay. That’s called a progressive tax rate.
- Up to the basic tax-free allowance, you pay no income tax at all.
- Grown-ups still argue about whether that’s fair. Fairness questions rarely have just one answer.
Progressiver Steuersatz
progressive tax
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. What does a progressive tax rate mean?
2. Do Daria and Christian have to pay taxes on the €11.70 from the lemonade stand?
3. What does Mojito say about fairness questions?
Volume 1: Wer kassiert mit? (Who Takes a Cut?)
Why taxes exist, who takes a cut and where the money goes. For kids ages 10 and up, bilingual German and English, 38 pages, illustrated in full color throughout.
