ShmoopTube

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Finance, a la Shmoop. [title page] What's the difference between federal

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and state taxes? All right, well, when the U.S. came together a quarter of a

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millennium ago, it was the United States. See, right there in the title you get a [founding fathers pictured]

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sense of the tension. We started out as just states. These things. Then, we came together [individual states on map]

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and created a central government that kind of sort of had control over each of [government tries to control states]

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the states, and well, you can imagine that not everyone agreed about every rule.

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Some states wanted murder to be an offense punishable by death, while other [protesters picket]

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states wanted it to be, you know, legal. Well, okay maybe not legal, but they

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had different ideas about how you should deal with murderers... i.e., not all of them [person pushed into lion pit]

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should be thrown into the lion pit. Anyway, this was all well and good when it just

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involved local laws and customs. Local customs dictated local laws, and then

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local taxes could be allocated accordingly. So they could pay for things [local laws and taxes diagram]

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like a bouncy house for the mayor. But what happened when there was a threat of [mayor in bounce house]

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military invasion? Well, what if Georgia wanted to fight

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them commies, but North Carolina didn't? Yeah, that didn't work out so well. So [states argue over military]

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for some things, there has to be a federal law that supersedes state law

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and federal taxes that support those laws, like military spending. If only those [federal laws and taxes diagram]

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pacifists in Maryland didn't want to spend money on guns, well, then what would

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the rest of the country do? Yep, let Maryland start speaking Russian or [Maryland hippies hang out]

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Chinese as the preferred language while the rest of the nation just watched [Maryland conquered]

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while sipping their tea? Or in the United States' case, you know, eating doughnuts? Yeah. [Americans eat doughnuts]

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So, military spending protects the entire country, and those expenses come out of [military budget chart]

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federal taxes. National highways? Federal. Border Patrol? Federal. Space travel? [federal and local laws/taxes demonstrated]

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Federal. Schools? State. Libraries? State. Little country roads? State... local.

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You know... Or even smaller in the form of county

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taxes as we get littler and littler... yeah. So federal taxes pay for all the big

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stuff--the things that we share as unified Americans no matter what state

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we live in, while state taxes pay for stuff particular interest to our little

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local state, wherever it is. You know, like DC taxes aren't going to be used to

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build a fire department in Minnesota. Stuff like that. [fire department in Minnesota]

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Besides, Washington has their, you know, own fires to put out. [newscaster speaks]

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