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 -
One one hand, it is true that the IRS cannot and does not audit everyone, or send all delinquent accounts to some form of collections. It is also true that they are disinterested in de minimis settlements from judgment-proof citizens, i.e. they're not coming after you for a $5 error (though they might send a letter about it!).
On the other hand, it is also true that there are things you can do that their computer systems will now notice more or less automatically, which will substantially increase your risk of an audit and/or collection activity. People can, and do, get hit with wage garnishment and even jail time for unpaid accounts.
I have never been able to think of a good moral argument for income or capital gains taxes; sales taxes possibly, certain limited property taxes maybe, but income and capital gains taxes are just straight theft. So please don't imagine I have any sympathy for the IRS when I say: just pay the IRS what you owe under the law as written. Unless you are at least a centi-millionaire for whom the cost of legal defense is arguably less than the possible savings, there are very few situations where I can imagine the risk outweighing the reward.
Now you might say--"but I don't know what I owe, because 'estimated taxes' are bullshit!" I sympathize, I really, really do. The fact that a single windfall can result in a year or more of the IRS asking you to pre-pay your taxes based on unrealized income you can't possibly predict is incredibly abusive. But so long as you pay a plausibly good faith estimate, you will have done something defensible. And also remember that the IRS doesn't (usually?) escalate to "jail time"--the first thing they do is demand their protection money, and the second thing they do is add penalties on top of that. So if you underpay your estimated taxes, there's a chance they'll hit you with a penalty for it.
Setting up a shady small business and taking deductions can indeed reduce your apparent tax burden, but it also exponentially increases your chances of an audit (and the penalties you will incur in the process).
Good luck!
Payment for the services which allow you earn that income doesn’t do it for you? Or is it a sense of double-dipping with taxes on consumption?
I’m having a hard time imagining why the income tax would be less justifiable than any other form of tax.
Which government services "allow" me to earn income? At best I suppose the provisioning of a fiat currency might qualify, but I'm not really sold on fiat currency being an improvement over known alternatives. Since government monetary policy is not typically crafted to benefit me (specifically), but to benefit banks and other large stakeholders, the absolute strongest steelman I can think of for fiat currency is that it creates a sort of "trickle down" effect where I benefit incidentally. Beyond that, stuff like the roads I travel to get to work, or the police I (basically never) rely on to keep my workplace safe, are all either privatizable, or easily provisioned through more direct means (e.g. tolls or vehicle purchase taxes or the like).
Maybe? Nozick's "Tale of the Slave" captures the problem reasonably well. I don't mind paying for services I use. But if you split my "share" of income taxes proportionally between all government programs, at least 50% of that money is just being redistributed to people and programs who don't deserve my money. For every hour I work, I spend about five minutes enslaved to someone else's cause--causes that are not only unnecessary to the continuation of my community, but are in many cases (e.g. federal funding to Planned Parenthood, military incursions driven by sentiment rather than defensive or even economic considerations) things I regard as actively harmful to my community and to the world. I am told that this is why we have the democratic process, so I can have a "say" in how my money is spent, but realistically my "say" is worthless, and I don't think I should have only a 1/150,000,000 say in how my life is spent.
Because it's just stealing. Person A has $$$, so take it away and give in to person B. "Person B needs it more!" So? We don't actually redistribute money based on need, need is the excuse we give for redistributing money based on the political priorities of the powerful. Property taxes bug me (since they ultimately end with property confiscation) but at least they are mostly attached to services that make the property useable. Vehicle taxes, or even mileage or road taxes, are at least mostly attached to related services. Sales tax makes some sense to me insofar as we do have a shared currency, military operations keeping shipping lanes safe, etc. Even some of the more paternalistic stuff, like Social Security tax, is at least more justifiable that income tax, because (at least in theory) the money being confiscated is for a specific identifiable purpose directly related to the earner's well-being.
But income tax is just straight wage theft. It lacks even the patina of paternalism. People who pay income tax are just being milked by the government, in substantial measure for the purpose of outright buying votes from the poor. Basically every extant form of taxation I can think of is more justifiable than income tax. Which is not to say that I am especially bullish on other forms of taxation, but I'm not an anarcho-libertarian. I'm okay with sensible, relevant taxation, but income tax does not even remotely meet that threshold.
Taxation is theft, not slavery, that is why I like it over alternatives (or maybe tribute not theft).
This text was linked some time ago, and it is quite silly.
There is very significant difference that I have no some slave owner that may rape me, take all my stuff, sell me 200kmn away, flog me, forbid me to leave specific village or tell me that I am now obligated to do unpleasant job XYZ for 18 hours a day. Taxation is not like any of these things.
Is it? You don't appear to have read it.
The text clearly accounts for all of this. All you seem to be saying is that you don't think #9 is slavery. What about #8, #7, etc.? The point of the text is not that taxation is slavery, it's that it is surprisingly difficult to specify, from a moral perspective, where slavery begins or ends.
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I've basically never seen a police officer in a drug store. What I do always see, though, is drug store shelves laden with row after row of expensive products, instead of the post-apocalyptic scene you get when police aren't keeping the products I'd like to buy safe. That's not because my city doesn't also have countless people who would be happy to steal shelves bare, it's just because there's a huge amount of hysteresis in these systems, so in my areas the police usually don't have to be seen because they've been effective enough to be a deterrent.
Maybe. But I notice that that drug store's existing private security is reportedly "to protect customers and employees rather than chase after shoplifters", not to actually solve their huge security problem. Although as a customer I would indeed find myself in zero direct danger from a store that I have no remaining reason to enter, half of my family ended up relying on one life-saving drug or another in their old age, so I would at least consider a collapsing market for drug stores to be an indirect danger at some point. Perhaps private security would be forced to step up their game, if public police were completely nonexistent? Or perhaps the important factor is that the problem of liability concerns for unrestricted private policing would mostly go away at that point ... which strikes me as a bit of a double-edged sword, though I must admit that I'm not thrilled with all the side effects of public policing either.
Yup! Ironically, the "it's just stealing" premise (I like the phrasing "taxation is theft", personally) makes income tax more acceptable to me rather than less. Until we figure out how to keep a country working without a lot of stealing, we might as well give up on trying to make each individual theft precisely justifiable, and just focus on trying to mitigate the damage by spreading it around in amounts scaled to the victims' ability to afford the loss.
I suppose the real problem is the converse? If you're not trying to justify each particular form of taxation with reference to what that specific revenue is to be spent on, then you're also not trying to justify each particular form of spending with reference to how the specifically taxed people are going to benefit from it, and that means the options for spending blow wide open? But I'm not sure that would be a real obstacle to any politician who wasn't also a philosopher, and I suspect in the USA any remaining philosopher-politicians quit in disgust after the non-philosopher-politicians discovered the "reinterpret the Commerce Clause to let us make any law about anything" loophole.
No? I'd always thought of "privatize all police" as the major dividing line separating anarcho-libertarianism from the varieties including my own much more tentative/boring libertarian leanings. At the very least, when I think about "how could we make police privatization work", I'm hard pressed to find someone other than David Friedman who's given great thought to the issue, and e.g. his subtitle to "Law as a Private Good" is "A Response to Tyler Cowen on the Economics of Anarchy".
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Proper amounts of spending and proper sources of taxation aside, there are few services that I value or that I earn income from that are funded via federal income tax. Property taxes, while annoying, at least actually pays for the infrastructure of daily life.
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