There was a recent post on lesswrong, which also got highlighted on AC10, that struck my interest. It claimed that he had been avoiding taxes for 20 years through "one simple trick:" filing, but not actually paying them. The idea is that the IRS is so small and incompetent that they basically won't do anything against this sort of passive resistance.
Is this too good to be true? I'm not any sort of "effective altruist," I just don't want to pay taxes. And as it happens, I have a lot of capital gains income this year. According to the rules, I'm supposed to write the IRS a big check by Jan 15 for "estimated taxes." I can afford it, but it would make my life better to keep that money for myself. Can I just... not...? This feels like a real Matrix, red pill moment-
"You're telling me that I can dodge taxes?" "No. I'm telling you that when the time comes- you won't have to."
Then again... I really, really don't want to go to prison. even just getting my passport suspended would be a major hassle. And the guy who wrote that post seems like a real hippy... no bank account and no salary income??? how does he live?
Perhaps it would be better to set up a shady small business and claim all sorts of vague tax deductions. Thoughts on this?
btw: long time lurker, first time poster. I'm asking here because you seem like people who are smart, outside-the-box, and not simps for the government.
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Notes -
My initial reaction was the same as just about everyone here: "horrible idea, don't ever do this"
I went and read the post, and it mostly changed my mind. Its still not something I would do, I am way to financially risk averse. But its not the worst idea ever.
The important thing to note about the advice is that there is an easy financial path in life where you don't really have to think too hard about financial things, you get a salary, your employer deducts the right amount for income taxes, and you get to use bank accounts and standard investment vehicles for growing what money you can manage to save. If you choose to do tax avoidance, that easy financial path will be gone. It is a large potentially permanent lifestyle decision that you'll have to make. And if you have a spouse they probably need to be willing to make the same lifestyle decision. And if you ever plan on having kids, it will impact those kids. Certain parts of the easy financial path in life are designed to benefit people with children, and those will be closed off to you. Inheritance will also likely be a mess. And your children might have to make the same financial lifestyle decision in order to receive financial help from you.
I was on that "easy path" for a long time. And it was... fine, just kind of boring and soul-crushing. I feel the need now to experiment and live a little differently. But yes, very risky.
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