The Deduction

Economic Education Month and TaxEDU

• Episode 65

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October is economic education month. An important part of economic education is understanding how taxes affect the economy. On this special episode of The Deduction, we discuss how Tax Foundation is doing just that through our tax literacy initiative, "TaxEDU." 

Zoe Callaway, Manager of Education and Outreach, joins Kyle Hulehan to chat about why Tax Foundation launched TaxEDU and how TaxEDU is advancing tax policy education, discussion, and understanding in classrooms, living rooms, and government chambers.

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Kyle Hulehan:

October is Economic Education Month, and understanding how taxes influence the economy is crucial. In today's special episode, we'll pull back the curtain and discuss why the Tax Foundation launched its tax literacy initiative, TaxEDU. Hello and welcome to The Deduction, a Tax Foundation podcast. I'm your host, Kyle Hulehan, and today we're joined by Zoe Calloway, our manager of education and outreach. Today is a special episode as it's Economic Education Month, so we wanted to bring in our resident expert on education, Zoe. Zoe, how are you doing today?

Zoe Callaway:

I'm great. Kyle. How are you?

Kyle Hulehan:

I'm good. I'm wondering, because I'm a very curious person, Why Economic Education Month is so important.

Zoe Callaway:

Well, Kyle, Economic Education Month is so important because some people aren't even offered economics education in high school or even in college, but our listeners probably think that that's not the fact because a lot of you are economists yourselves and compared to the average populace, you are experts no matter what level of education you have because we just don't have that basic understanding across the populace. But by pushing for more and better economics education, we're really helping boost an understanding that impacts people's daily lives. This can change people's decision making, their quality of life, where they decide to live, and even goes all the way up to policy making decisions as well.

Kyle Hulehan:

Yeah, I know that I myself didn't have very much economic education. Being here at the Tax Foundation has taught me quite a lot, but I didn't have it in high school. I was a political science major and I only had to take it... I had to take one econ class, to graduate with a political science degree. So clearly there's a little bit of a, of a gap there in education. And so I'm wondering, because we are the Tax Foundation, what role do taxes play in economic education?

Zoe Callaway:

Pretty big role actually, Kyle. Taxes impact the economy in a few different ways. This can be financial decision making for individuals and businesses. Think about the individual income tax or corporate income taxes. This can impact tons of things. Where you decide to live, how many people businesses can hire. It can also impact prices. It can influence the supply and demand curves and more, and an understanding of taxes in the framework of economics can lead to more sound financial decisions as individuals and as future taxpayers, business owners, or even policymakers if we're able to introduce this information at a younger age.

Kyle Hulehan:

Yeah, I mean, it is so important, I feel like, to get it at a younger age, because I know, for myself, you just don't really understand it or grasp it till you, you start paying more. And once you start paying, you're like, Oh, now I need to know, I need to figure this out. But, but even then, it's still very hard and complicated. It's not very clear. It's very confusing and there's just not enough education on taxes and the economy in general. But before we dive further into that part, I kind of want to peel back a little bit and I want to try and understand why the Tax Foundation started TaxEDU.

Zoe Callaway:

Absolutely. So Tax Foundation has always been an educational organization since its inception in 1937. However, the main audience for this education was lawmakers and their staff. And that's really important work, and we still continue that work. But in 2021, TaxEDU was launched as a dedicated effort to boost tax literacy across the board. This incorporates new audiences like high school and college students, the average taxpayer, CPAs, and still, legislative staff, just with simpler resources for anyone maybe starting their career or just getting into tax policy. And with this expansion of the audience, we're really hoping to just make taxes accessible for anyone looking to learn more about them.

Kyle Hulehan:

So, what does TaxEDU offer to people?

Zoe Callaway:

The catalog's pretty broad when we're talking about resources and materials that we have available, and I encourage all of you to go and check them out on our website. But we have educational videos that are animated that are designed for the classroom. We also offer grades nine to 12 lesson plans, primers, case studies, this great podcast we're on right now, and legislative courses for federal and state staff, as well as an extensive tax focused glossary. Additionally, we do outreach to make sure that people know that these resources are out there when they're looking for them. Part of that outreach is attending events and conferences, including the one that you and I are going to go to together in December, which we're very excited for, the 103rd Annual National Council for the Social Studies Conference in Nashville, Tennessee.

Kyle Hulehan:

We'll be there. Uh, if you want to show up and join us, we'll chat about taxes with you. It's also, so Zoe and I, this is kind of fun. Zoe and I are exactly one day apart in age and our birthdays are in December when this conference is. So maybe you can come and celebrate our birthday with us too, if you want, but mostly we'll be talking about taxes. I promise. Is TaxEDU offering anything new right now, Zoe?

Zoe Callaway:

So we just started back in June publishing the short form blog series. And while our experts here at Tax Foundation do great work in their own blogs and papers, it's not super accessible to the average person, I've noticed. And so through this new content type, we're able to break down common tax policies that we're seeing in the media that are really popular that people are searching for information on. And be able to explain it to them in a way where they can really grasp what's going on and how it's going to impact them. But it's fun too, and you know this because we worked on some pretty fun short form blogs together. Like one on the Barbie movie and Taylor Swift.

Kyle Hulehan:

And that's the truth of it. It is a lot of fun. We have fun writing them. Uh, no one could escape Barbenheimer, and obviously, absolutely no one, even with the NFL, you cannot escape Taylor Swift. She is everywhere. She is in taxes. It's all consuming. It's her world. We're just living in it. Um, but ultimately, the Short Form is a lot of fun. I'm obsessed with Indiana Jones. I wrote about taxing treasure, because that's fun. Why not? Let's talk about taxing treasure. How does it work? What happens? The short form's a lot of fun, but we do have our intrepid editor Noah writing some very good pieces on, you know, more substantive issues. He's explaining taxes and migration and how that works people going from state to state, with taxes being a part of that. So Zoe, to get back on track after my own little tangent right there, uh, Who are we trying to reach with TaxEDU?

Zoe Callaway:

Everyone. Kyle. I mean, the fact of the matter is the understanding of taxes and economics as a whole is not as great as it could be, especially for how important it is. Our resources are designed to advance tax policy education as well as discussions that you might be having, you know, with family members, friends and understanding in classrooms, living rooms and government chambers. The fact is many people all the way from students up to lawmakers just struggle to understand taxes and the impact that they have on real people in their daily lives. That's why our audience is so broad, but that's how we can be the most effective is to have such a broad audience.

Kyle Hulehan:

I can say in all honesty, when it comes to the education gap here and what we're trying to teach people and show people and learn, is I honestly didn't even know what tax bracket I was in. I didn't understand how tax brackets worked. Nobody taught me, nobody showed me. It's not like people really understand how tax brackets work and it's such a simple thing and it's such an important thing because it's coming out of our check every other week. It's something that we deal with all the time and that people focus on and worry about but there's a lot of misunderstanding and people don't really seem to know it or get it. It's just shocking how simple and basic of a gap there is

Zoe Callaway:

I think that's a great example and I'm glad that TaxEDU was able to put out a video about that because when we launched this video, Kyle, let me tell you, when we introduced it to personal finance educators, even they didn't know how tax brackets worked. And they're teaching our students about how tax brackets work and how they're going to encounter them. So when I say that pretty much everyone struggles with taxes, unless you're an expert, I really mean it. This work is important that we're doing here.

Kyle Hulehan:

That's not surprising to me I mean, honestly, one of my best friends is an accountant and he tells me all the time he only knows what he needs to know about taxes. People do not have a broad or wide understanding of what they need to know and so i'm glad that we're here filling this gap. Please check out the video. It's very informative. It's very engaging. Um back on track a little bit here what is the lasting impact that we're hoping to introduce with TaxEDU and tax education to younger folks?

Zoe Callaway:

Since we are the same age and we've covered that already, I'm sure you might have a similar experience to me here, where one of my first instances of encountering a tax is I remember going to the store with my dad when I was younger and wanting to get an Arizona tea can, which had 99 cents printed right on the can. That's the price. And having a measly crumpled up dollar in my pocket and then getting to the register and that dollar wasn't going to cover the purchase and what a shock because I didn't know that there was going to be a tax added onto this purchase and then my money didn't go as far as I thought it could. So that's a really basic example, but I think all of us can relate to having a first job and seeing taxes come out of our paycheck and just this misunderstanding and lack of experience with taxes really makes it hard to navigate, financial decision making and economics without fully understanding them. So by introducing taxes and their impacts to younger audiences, we're preparing them for the inevitable future of being a taxpayer. They're going to understand where their money went. In their paychecks as they continue to work, they're going to be able to budget better as they start earning money and are able to put it away and make better investment decisions and they can make better overall financial decisions by factoring in the very real impact that taxes have on those decisions. The goal overall is that taxes will be less confusing and less of a shock.

Kyle Hulehan:

Yeah, taxes are certainly confusing, and I think just even understanding, the basics of it or how a sales tax is working, like you're pointing out, is very important. I, I even, I mean, this is a personal example. I used to work for a company and we needed to buy a lot of, of electronic equipment, Macs, different things that were expensive. And so, I live close to Delaware. Delaware doesn't have sales tax. What did we do? We went to Delaware, saved hundreds and hundreds of dollars. I mean, it obviously impacted my behavior, which is something we've talked about here. But it's just a simple example of when you know and understand, like this business, a small business was able to save some money, but there's a lot of people that maybe aren't paying attention to that or don't know these things or aren't understanding or thinking about how this works.

Zoe Callaway:

100 percent Kyle and a little off track, but as a Delawarian myself, that's why I was shocked by that Arizona tea tax because when I'm buying it at home, it was 99 cents. But drive 20 minutes away and cross into Maryland, there's a 6 percent tax on that can of tea. So it was easy to figure it out young because I went from no tax to tax, but as you get older, taxes just get more complicated.

Kyle Hulehan:

Taxes are cruel like that. They, they don't care. Even if you're a little kid and you're just trying to get some candy, you still gotta pay them. That's how it works. But what is, is the impact that you're hoping to have here on, on voters, on taxpayers, business leaders, lawmakers?

Zoe Callaway:

There's a lot of misconceptions about taxes that we see in the media and even in political rhetoric. So when we are able to support a robust understanding of taxes and how they truly interact with the economy, voters can make more informed decisions on who they put into office at any level. Remember, there's taxes at the local and state level too that impact us even more than federal taxes sometimes. Business owners can plan better for new hires, new locations and more, by better understanding what taxes they'll have to pay when they make these decisions. And lawmakers will also be able to support more substantive policy that has the potential to generate more revenue with less economic harm instead of supporting policies that might sound good based on these media sound bites, but don't actually have the economics support behind them in practice.

Kyle Hulehan:

I think a big takeaway for me in this is if you're listening to this podcast right now, you are probably in the top 1 percent of economic understanding, knowledge, and interest. You care. You're interested, you're informed, but there are so many people that aren't, and they don't exactly understand how it's all working and how it's all affecting them, and it's very important that we continue to engage on all of these topics. It's important that we engage in Economic Education Month because of how it relates to taxes, and just helping people on an everyday level, how it's impacting their behaviors, how it's impacting their lives. And I think what you're doing here is helping people. And it's helped me understand a lot more. I think, it's pretty clear if you listen to this podcast, I'm not an expert, I don't know everything. And I think I would like to blame some of the schools for that. And my, know, not having enough economic education over time.

Zoe Callaway:

Understandable, Kyle. Honestly, I feel the same. And I focused on financial policy in my studies and it still probably wasn't enough. I've learned a lot from Tax Foundation as well.

Kyle Hulehan:

Thank you so much, Zoe, for being here to educate us on Economic Education Month. And, if any of this interested you, please go to taxfoundation. org slash donate. This has been another episode of the deduction to learn more about the tax foundation and the deduction. Visit us at taxfoundation. org slash podcast. You can follow us on Twitter, Facebook, and LinkedIn at tax foundation. If you've been enjoying our show and want to help us grow, please leave a five star review on Apple Podcasts, Spotify, or wherever you get your podcasts. It helps others find the show. And if you didn't enjoy the deduction, well, keep it to yourself. Another way you can support our work is by donating to the Tax Foundation on our website. Thank you all for listening, and we'll see you next time.