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Tax Avoidance

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... that discretionary money and time, and living a full life for as long as they can get away with it(which I know for a fact can be done for long periods of time-even indefinately ) is worth the risk of a few years in a federal prison.

If any tax evader can get away with it, shelter the money in offshore accounts and have it well invested, he might be comparing 2 years in federal prison to retiring 20 years sooner to pursue his passions. Prison aint that bad when you add up the math. 2 years in federal prison as compared to 20 years of hard labor for the benefit of someone else? See what I mean. People have different values and different tolerances for risk and discomfort. Your own standards determine the relative value of these values and disvalues. People can be and are different and as a result the right answer may be very different for you then someone else. That doesn't make it the wrong answer.

Worth the risk of a few years in federal prison? Are you kidding us? Don't you remember Office Space and "federal, pound me in the ass, prison?" I can't even fathom what would be worthwhile to subject myself to that.

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The issue of tax evasion, as I see it, is an issue of context and hierarchy of values.

I think it is in the context of a hierarchy of values that the whole idea of tax evasion falls apart.

Hierarchy of values involves what I'm trying to achieve: is my wallet worth more than my well-being, is this an isolated threat or a recurring one -- what action is actually in my life-serving long term interest?

I could be said that it is in everyones short term interest to evade taxes. It is the equivalent of an immediate and sizable raise in income, and the chances of being discovered in the near term are nil. Virtually anyone can get away with it for a year or two or perhaps longer. It is only in the long term that the real consequences for tax evasion appear, and that is what rational self interest is about--the long term. When considering the question you posed: 'what action is actually in my life-serving long term interest?' Tax evasion should immediately be scratched off the list. It is little more than a short term strategy--actually, there is nothing strategic about it. It is, rather, as its name suggests, an evasion, not just of taxes, but of long range thinking.

I guess my difficulty here is in trying to come up with a scenario where tax evasion can be considered to be a benefit to ones long term well being. The person who places a higher value on the dollars he saves by evading taxes is really putting in jeopardy everything those added dollars might net him. How does one plan for and build a long term future, when that future is so clouded with uncertainty? If at any point in the future the evasion is uncovered, everything that man has worked for could be lost--business, savings, liberty and even ones family can be destroyed. Is this not exactly the type of trouble the rational man seeks to avoid? I suppose if someone could supply me with an example of an argument whereby a rational man sees tax evasion as an integral part of his long term strategy for success, then I might reconsider. But until then, I will view it as short sighted, irrational and self-destructive.

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I suppose if someone could supply me with an example of an argument whereby a rational man sees tax evasion as an integral part of his long term strategy for success, then I might reconsider. But until then, I will view it as short sighted, irrational and self-destructive.

What you don't seem to see is that it is not an argument that is needed so much as an understanding of differences in context and personality. It is like trying to convince someone who likes security and owns a cd earning 1.5% interest that it is rational to buy a stock that might earn him 17% but has a possibility of losing all of it's value. People decide what level of risk they are willing to endure in all of their actions. If you have a good job with a steady paycheck is it ever rational to start your own business? For some people yes and some people no. Different contexts will determine it.

With taxes, you seem to think that the government is much more powerful and efficient then it is. There is no guarantee that he will get caught and if he does, in all reality, what they usually want more then jail time is money. They say you have some accounting errors and need to pay X amount of money. People in jail can't pay...they don't want you there. The people that go to jail are usually the ones who confront them and refuse or make fraudulent claims which are so far off the truth that their intention is obvious.

The problem with enforcing it is the same problem that exists with any type of fraud. It's necessary to prove intent. Especially with a tax code so bloody complicated that if you try to do it right and succeed it's something of a small miracle. Accounting errors are easy to make and it does not erase the liability but it does make it difficult to make a case for prison time.

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With taxes, you seem to think that the government is much more powerful and efficient then it is. There is no guarantee that he will get caught and if he does, in all reality, what they usually want more then jail time is money. They say you have some accounting errors and need to pay X amount of money. People in jail can't pay...they don't want you there. The people that go to jail are usually the ones who confront them and refuse or make fraudulent claims which are so far off the truth that their intention is obvious.

The problem with enforcing it is the same problem that exists with any type of fraud. It's necessary to prove intent. Especially with a tax code so bloody complicated that if you try to do it right and succeed it's something of a small miracle. Accounting errors are easy to make and it does not erase the liability but it does make it difficult to make a case for prison time.

I've been in a field related to accounting for a number of years and I've had quite a few clients who willfully avoided taxes. For the most part they were business owners who took cash income without reporting it to the IRS. Often they do this for years and then at some point they come to the attention of the IRS and that's when the stuff hits the fan. I agree with you that usually the IRS wants your money more than they want your freedom. However, that certainly isn't always the case and the money part of it can get pretty sticky too when they start adding interest and penalties. Depending on the facts, they may well decide to make an example of you.

The thing to remember about dealing with the government is that they have all the time, manpower and resources in the world to come after you if you're unfortunate enough to register on their radar screen. I urge all of my clients to pay their taxes. As Fletch said, tax evasion is a short term strategy and a very risk one as well.

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How does one plan for and build a long term future, when that future is so clouded with uncertainty?
That applies whether one evades taxes or capitulates to them. The evader implicitly thinks "This money is rightfully mine. I thus will keep it, and risk the already unjust IRS guys committing more injustices against me."

The capitulater implicitly thinks "This money is rightfully mine. However, I might unjustly get beat up if I keep it, so I'll sacrifice it now, and one day I may be able to get (some of) it back."

Giving your lunch money to the school bully isn't necessarily long-term thinking.

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A proper action instead is to convince those 20 million people that the law is immoral and should not exist.

So an action (tax evasion) is immoral unless you can convince the collective consciousness to allow you to commit it?

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So an action (tax evasion) is immoral unless you can convince the collective consciousness to allow you to commit it?
No, Sophia was not making the leap from "tax evasion" to "an action". Rather, I think she's implying that there is something in the nature of tax-evasion that puts it in a special category. As I understand her argument it is that if everyone picks and chooses what laws they want to follow, it will result in chaos. The argument assumes that one is speaking of a country that has freedom of speech, relative freedom of person, significant rights to property -- a western style political system. The argument is that in this context everyone should agree on the principle that they will use words and arguments to convince other citizens to change their viewpoints in order to change the laws, rather than trying to evade the law.

I'm not trying to support the argument here. I'm just trying to re-state it to clarify the question you raised.

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So an action (tax evasion) is immoral unless you can convince the collective consciousness to allow you to commit it?

SoftwareNerd is correct but I would like to add that I would want those 20 million people to understand WHY there ought not be any taxes. If they would understand that there would be no law and thus no crime to commit.

Edited by ~Sophia~

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As I understand [~Sophia~'s] argument it is that if everyone picks and chooses what laws they want to follow, it will result in chaos.
Ah, rule of law...

The argument is that in this context [of a country that has freedom of speech, "relative" freedom of person, and "significant" rights to property] everyone should agree on the principle that they will use words and arguments to convince other citizens to change their viewpoints in order to change the laws, rather than trying to evade the law.
Hmm...

To whomever would support such an argument:

  1. Is "relative" freedom of person and "significant" rights to property an objective standard, or a subjective one?
  2. Is it a sacrifice for the would-be evader to not evade an unjust law?

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Shazam! Right from the random quote on the front page:

The citizen who thinks he sees that the commonwealth's political clothes are worn out, and yet holds his peace and does not agitate for a new suit, is disloyal; he is a traitor.--Mark Twain

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Shazam! Right from the random quote on the front page:

The citizen who thinks he sees that the commonwealth's political clothes are worn out, and yet holds his peace and does not agitate for a new suit, is disloyal; he is a traitor.--Mark Twain

The problem, bob, is that you are not agitating, you are hiding. You have gone underground. You have chosen to evade the laws, not fight them.

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The problem, bob, is that you are not agitating, you are hiding. You have gone underground. You have chosen to evade the laws, not fight them.

There's no other way to fight taxes than to not pay them. Unless you have logical alternatives, in which case I am all ears.

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