Ice Cream?
and two very different animals
In the town of Sweetville, everyone loved ice cream. There were 100 people who lived there, and every year, each person earned some scoops by working hard.
The town needed things to run — roads to drive on, schools to learn in, firefighters to keep everyone safe, and parks to play in.
But who would pay for all of that?
That’s where Ellie the Elephant and Donnie the Donkey came in. They each had a different idea about the best way to collect taxes — the scoops everyone chips in to keep the town running.
Imagine you earn 10 scoops of ice cream every week from your job. But the town needs 2 of those scoops to keep everything running. That’s a tax!
In real life, instead of ice cream, we use money. And the United States has around 38 different types of taxes that the government collects to pay for everything from highways to the military to schools.
Ellie believed the best taxes were on things people buy and spend. If you buy something, you pay a little extra that goes to the government.
This is called a consumption tax — taxing what you consume (use up), not what you earn.
Donnie believed the best taxes were on income — the money people earn from their jobs. And the more you earn, the higher percentage you pay.
This is called a progressive tax — the rate goes up as your income goes up, like steps on a staircase.
One sunny afternoon, Ellie and Donnie sat down at Sweetville’s ice cream shop. They each ordered a scoop. Then the debate began!
When you grow up and get a job in California, here are the main taxes you’ll encounter. Some were created by Ellie’s team, some by Donnie’s team, and some by both!
One summer, Ellie and Donnie’s families went on vacation. They stayed at a hotel in Los Angeles and got quite a surprise when they checked out!
Their room cost $200 per night. But the final bill was much higher. Here’s why:
Hotel tax: $31.00
Tourism fee: $0.40
Total: $231.40 😱
Great question! Ellie and Donnie actually agree on this part — taxes pay for things we all use but couldn’t afford alone.
no roads, no schools, no public safety.
Ellie and Donnie both know this is true.
Looking back at American history, a clear pattern emerges. Ellie’s team (Republicans) and Donnie’s team (Democrats) each had a consistent style:
Donnie’s Team Created:Income tax (1913) · Social Security (1935) · Medicare (1965) · ACA taxes (2013) · CA gas tax hike (2017)
Ellie’s Team Created:Gas tax (1932) · CA sales tax (1933) · Alcohol & tobacco taxes · Firearms tax · Prop 13 (1978)
At the end of a long day of debating, Ellie and Donnie sat together and split an ice cream cone. They didn’t agree on everything — they never did.
But they both agreed on this: taxes are how a community takes care of itself. The debate isn’t really about whether to have taxes. It’s about which kind is fairest — and that’s a question every generation gets to answer.
Donnie taxes what you earn.
Both are trying to run a good town.
Now it’s YOUR turn to decide what’s fair. 🍦
Every tax has consequences — things that happen because of it, sometimes in ways nobody expected. Here are some of the biggest debates about what happens when you tax income too heavily.
But here’s where it gets complicated. Ellie’s team points out that very few people actually paid that 90% rate — there were so many deductions and loopholes that wealthy earners often paid far less. And the economy was booming partly because the rest of the world had been destroyed by World War II, leaving America as the only major manufacturer standing. That’s hard to replicate!
Meanwhile, the cost of living has changed dramatically. In the 1950s, a house cost about 2–3 times a worker’s annual salary. Today it costs 5–8 times. College, healthcare, and childcare barely existed as major expenses back then. So whether the high taxes caused the prosperity — or prosperity just happened despite the taxes — is something economists still genuinely disagree about.
🎓 College = nearly free or very cheap
🏥 Healthcare = minimal cost
👶 Childcare = mostly home-based
👨👩👧 One income could support a family
🎓 College = $40,000–$80,000/year
🏥 Healthcare = thousands per year
👶 Childcare = $1,000–$3,000/month
👨👩👧 Most families need two incomes
Ellie and Donnie’s debate about taxes is really part of a much bigger question that humans have wrestled with for centuries:
Who should share the ice cream?
And who decides?
Capitalism vs. Socialism is about WHO controls the money in the first place.
Turn the page for one last thought… →
