Taxes paid for everything you see in this photo, which shows a middle school library ELEMENTARY CIVICS Part Two: Where does government get its money? So the government pays your teacher, and the government pays for your school desk, and the government bought your school bus. Sounds like the government has a lot of money, doesn't it? Well, it does, and it doesn't. Because every penny that the government spends has to be collected from people like you and me. And the money that people like you and me pay to the government is called TAXES. Here are some things to know about taxes: Everyone has to pay taxes. * Taxes pay for government. You can't have much of a government without taxes, because police officers have to be paid; roads must be paved; and fire trucks cost money. * No one can escape paying taxes. Everyone who lives in the United States has to pay taxes. * The government sets tax rates, which determine how much we all have to pay in taxes. The rates may go up one year and down the next. * The amount we each pay in taxes has to do with how much we earn, how much we spend, what we spend our money on, and how much property we own. Someone who is rich, spends a lot of money and has lots of property pays higher taxes than someone who has less money and spends little. If you've bought a MoonPie, you've paid taxes. By the way, even you have paid taxes, but you might not have realized you did. Ever bought a piece of candy, or a pack of gum? The price you paid was actually a few cents higher than the price you saw when you picked it up at the store. The extra few cents is called sales tax. Now let's talk about the state we call Tennessee.