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 -
This seems in the same vein as things I’ve read about how simply not paying debts works a lot better than it should in terms of avoiding actual repercussions.
Enforcement is expensive and so there are limited amounts of it.
Seems high risk, however, and I would not recommend it.
There's a problem in a lot of Americas formalized systems, the threats are largely effective to prevent you from living a normal middle class or above existence, which if you've already given up on or failed out of that goal, isn't very effective. Once people slip into the world where they'll never qualify for a mortgage, or get a really good job, or have a significant amount of savings in a bank, a lot of the threats of bankruptcy, collections, etc become ineffective. If you are never going to get a loan, you don't care about your credit score. If you work for cash under the table and never plan to get a formal job, you don't care about garnishment. You just hang up on the debt collectors, and you put all your bills in your girlfriend's name, and move on with your life.
When the rent/eviction moratoriums were in place, I understood the policy's goals and advantages, but I also understood the mindset of lower end renters in a way that was overlooked in a lot of analysis. If you're already never going to get a mortgage or have a decent credit score, and know you never will, then the obvious play if you won't be evicted for six months to a year is to stop paying rent and stack that cash on hand. Even if you're future oriented, not paying rent for six months gives you an opportunity to save money that you might never see again! Save $10-20k, and now move in with your girlfriend and put her name on the lease or maybe even use it as the down payment for a small house!
A lot of policy makers and bureaucrats didn't see a plan like that, because their credit score is really important to them, and they can't imagine a person for whom it isn't important. Something about Hawks and Rats?
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Because enforcement is limited the taxman punishes those who offend severely for the use of those limited resources. The quoted post reeks of 'everything is fine, until it isn't'. I have my doubts the poster will come back with a 'the IRS finally caught up with me and now I'm financially ruined' follow up post if that situation eventuates. Similar vibes to the high rollers on /r/wallstreetbets.
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