Fanum Tax: Explaining What Taxes Really Are

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If you have been on the “Brainrot” side of social media, especially TikTok, you might have heard of the term “Fanum Tax”. If you haven’t, I’ll explain. Fanum is an online streamer and content creator, mostly on the platform Twitch and Youtube. The phrase, “Fanum Tax”, originated because he would steal a portion of the food members in the same content creation house as him. Anyone who had food, most of the time displayed while live on a stream, would face this “tax”. Hence, the intent slang “Fanum Tax” was created. 

The problem that I would see online is many people, probably young kids in generation alpha, would ask what the word tax actually means. Honestly, before I decided to write about this, I only knew a loose definition of what they truly are. So, I saw the opportunity to explain, in a simpler way, what taxes are. 

  Taxes, in the simplest description, is a required payment that is collected by officials of a particular organization to pay for the cost of services, goods, and various other needs of the community. Why do we need to pay taxes though? How does that benefit the taxpayers? Well, most of the money from taxes goes back into the community: supporting common resources, funding essential services, and overall benefits back to the taxpayer. Taxes funding certain programs and resources result in the taxpayer being able to have access to these different resources if they need them, like school and welfare.

Now, what would happen if someone doesn’t pay their taxes? Well, the IRS would begin charging the person penalties as well as interest on the taxes that you owe, as soon as they are past due. The IRS could also start doing tax liens and seizure of assets. Tax liens are when the government starts to claim your assets. For example, if you were to not pay, the IRS could obtain the interest of your property, which means take ownership of the property you have till you pay what is due. Seizure of assets is basically the same thing; it’s a legal process where the government or law enforcement will obtain possession of property. Seizure of assets mainly happens though if law enforcement believes that the property was obtained or used in an illegal way.

If someone fails to pay their taxes, they can be charged with fraud and evasion. Fraud is where the taxpayer is actively trying to lie or deceive the IRS with their tax papers. Evasion is when the taxpayer is trying to avoid or evade paying taxes or filling out the paperwork. This crime can actually land you in jail, depending on the type of evasion crime you commit. According to FindLaw, Tax evasion or incorrect paperwork could get you five years in jail, failure to file a return could get you in jail for about one year for each year you didn’t file by the due date, and helping someone evade taxes could get you in jail for up to five years, but it depends on the situation. It should be known that avoiding paying your taxes is a crime, and it’s illegal to do.

Taxes can be broken down into different categories, based on different situations. The current 5 most common forms of taxes are income tax, payroll, tax, property tax, sales tax, and corporate tax.

Income tax is a form of tax that the government can impose on individuals or businesses for the profit or income that they earn. The rate of the taxation may vary depending on multiple factors, for instance what they are taxing (a person or a business). Wages, salaries, and investments are forms of income that can have income tax. According to USAFacts, in 2023, the United States Federal Government collected 48.7% or $2.18 trillion in income taxes. Income tax  is nearly half of the total tax revenue that they collected for the year. If you were to think about the millions of people working as well as the thousands of businesses we have in the United States, I would say income tax should be the biggest percent of revenue. Income tax could also be called Personal Income Tax or Individual Income Tax.

Payroll Tax is the tax that is paid on the wages and salaries that people earn to finance different programs such as Social Security and Medicare. They are calculated as a percent of the salaries that an employer pays their employees. Payroll Tax can also be called Social Insurance Taxes, since they fund different social programs that can help the taxpayer later in life. According to USAFacts, in 2023, payroll taxes accounted for 36.6% of the amount of revenue received for the year. This percent is over ⅓ of the earnings made for the year, making it the second-largest source of revenue for the government. 

After hearing these two types of taxes, you may believe that they are the same. However, Income Tax and Payroll Tax are very different. The fact that Payroll tax is taken off of your salary to fund specific programs makes it different from income tax. Payroll tax is the tax contribution that employers and employees make to these different programs. Income Tax is the tax demanded on an individual’s sources of income. One is used to help programs while the other is used as revenue. 

Property Tax is simply just a tax a property owner pays for the property they have, either annually or semiannually. The government is taxing you on what you own, rather than what you earn. These taxes can be demanded by the national government, a state, a county, or a body of government. Most commonly these taxes fund local programs or needs, such as schools, fire departments, libraries, and other services that benefit the community as a whole. Property tax is actually the oldest form of taxation in the United States. According to the Tax Foundation, in 2022, 10.6% of the revenue that the United States earned was from property tax. This is a tenth of the earnings that the government made of the year, and the fourth-largest source of income for the government.

Sales Tax is a form of tax that is imposed on the sale of goods and services. This form of tax is applied typically when the consumer is at point of purchase. There are many different rates within the United States based on where you live; It can vary by state or even localities. Sales tax is also a form of consumption tax, since it is a tax on things one consumes. While it can be annoying, this sales tax revenue often funds various government programs and services. For example, education, healthcare, and transportation are funded by sales tax revenue. According to USAFacts, the revenue of sales tax was only 1.7% of the government. Compared to Income tax and payroll tax, this is a very small number. This would be one of the lower sources of income for the government.

Corporate Tax is a direct tax that is taken from the profits of a corporation. This tax is often collected on a national level as a source of income for the government, but it can also be imposed on a state or local level in different countries. This tax is applied to the company’s income (profit), which means their revenue minus all their expenses. Often, stockholders, workers, and investors have to pay the corporate tax burden, since it reduces the after-tax returns that a stockholder gets. However, paying corporate taxes are more beneficial for business owners rather than paying individual income tax because they can deduct medical insurance for families, retirement plans, and tax-deferred trusts. According to the Tax Foundation, in 2022, 6.5% of the revenue that the government made was corporate tax. This is again, one of the lower sources of income for the government.

All 5 forms of taxes do go to revenue for the government, however it is turned around to fund public programs that the community can use. Many of these programs are used daily or can help you in the future when you’re in need. As annoying as they may be, taxes do help benefit our country, state, and local communities.

For some history fun, according to the tax foundation, the first ever record of taxes and tax returns was 5,000 years ago, which is crazy to me. This was recorded in ancient Egypt. The Pharaoh at the time collected a 20 percent tax on all the grain harvests that happened. If I had to connect this to a form of tax we have today, I would probably say this is similar to sales tax since I would assume that those who collect or harvested the grain would turn around and sell it.

Connecting back to “Fanum Tax”, it truly is a form of tax within their content house because every time one of the members brings in food, their role as the taxpayer, Fanum will go and take the “tax” (the food in this case) as the tax collector. 

I truly do think it’s kind of cool that younger kids are getting introduced to the idea of what taxes are. Even if this example of taxes may not be the best idea for their minds, it’s something they can connect back to when they hear the word. I do think it’s very important that we teach taxes, especially younger teens when they start getting a job. This skill is needed for everyone, especially being an adult. I do think it’s a shame that we don’t teach the basics in school, that way when you start to pay taxes you’re not completely lost when you begin.

**I do not own the rights to this photo! It's was taken from KaiCenat's Live Stream on Twitch.