Updated: Dec 15, 2020
Halloween will look a little different this year. But the spirit of the holiday will live on.
Spooky decorations will still grace front yards, costumes will be donned, and trick-or-treaters will still get their candy one way or another.
Some parents will even get their share of treats by taxing the candy haul.
The parenting trend know as ‘the candy tax’ has been around for a while now. Parents try to turn Halloween into a lesson about government, taxes, and finance.
Really, though, the candy tax is a rouse by parents to satisfy their own sweet tooth and does nothing to teach kids of any age about income tax. Here’s why.
1. Income tax is a pay as you go system.
Generally, the candy tax is not invoked until families return home from trick-or-treating. Pillow cases and baskets are overturned, with candy spread out across the kitchen table. Everyone takes in their haul. The first piece of candy is about to be torn open when mom or dad leans down and takes a third of the candy away. What’s the problem?
Well, for anyone who’s ever held a job, you know that taxes come out of your pay with every pay check. You learn to live on a smaller sum so you don’t have a hefty and painful tax bill at the end of the year.
When parents take candy at the end of the night, they send a bad message about timing. Children will feel as if they lost so much more in one fell-swoop as opposed to if they paid candy piece by piece during trick-or-treating.
2. Candy is not income and trick-or-treating is not work.
If trick-or-treating was work, we’d be required to give kids a half hour break for lunch, offer sick time (from eating too much candy obviously), and provide performance reviews.
Trick-or-treaters aren’t going from door to door to solicit business, and homeowners aren’t giving out candy as payment for a knock on the door. People give out candy to cute kids who only have to explain their costume and say thank you. That doesn’t sound like work to me. It sounds like gifting.
People who turn on their front-porch light have the option to hand out candy or not. Which is why the two packs of M&Ms are considered a gift and not income. Receiving a gift does not trigger income tax and if the gift falls under the annual threshold ($15,000 in cash or assets for 2020) then gift tax isn’t triggered either.
Sounds like parents aren’t due any tax unless they are the ones being gifted candy themselves.
3. Not all candy is valued the same
Unlike money, candy across the board can hardly be valued in the same way. How can a Red-Hot Gumball (gross) be equivalent in value to a King Size Twix bar (delicious)? It can’t! The value of candy boils down to personal preference, which is far too time-consuming to value monetarily. You’d be doing calculations until next Halloween.
Sharing would be a better and simpler lesson when it comes to parents getting some candy this Halloween. Or just want till after bedtime.