About twenty years ago, I stopped paying U.S. federal income taxes. By law, the government has ten years to collect an unpaid tax bill, whereafter a sort of statute of limitations kicks in and the bill becomes permanently noncollectable. I’ve adopted the practice of waiting out this ten-year period and then donating the amount of the uncollected tax to charity, typically the Top Charities Fund organized by GiveWell.[1] Over the past six years I’ve redirected over $30,000 from the U.S. Treasury to charity in this way.

In this post I’ll briefly outline the theory and practice of this sort of tax redirection, and address some likely objections. If you have questions about the nitty-gritty details, leave them in the comments or drop me a line by email.

Theory

From an effective altruism perspective, the theory behind tax redirection is that giving money to the government is far from the best way you could deploy that money. It is questionable whether funding the government is even a net positive: worse than merely wasteful and inefficient, the government is often harmful. But even if you believe that marginal funding of the government is more good than bad, it is almost certainly not among the best ways you could allocate your money.

So if you could avoid paying federal taxes and give that money instead to more well-chosen causes, in a frictionless way, it would seem wise to do so (from an effective altruism standpoint). But of course such a move is not frictionless: the government disincentivizes some varieties of tax redirection with threats of sanctions, and other varieties of tax redirection have their own costs.

So you have to factor in those costs before you can decide if tax redirection would be a good option for you. But to many people, tax redirection is in the “unthinkable” category, and so they dismiss the option before actually weighing the costs and benefits. If you have been among these people, I hope this post will encourage you to move tax redirection from “unthinkable” to “let me think about that for a moment.”

The theory and practice of tax redirection in the U.S. has been developed largely by pacifist “war tax resisters”, who redirect their federal taxes because of conscientious objection to funding war.[2] Their belief that funding the government is indeed immoral led them to desperately seek alternatives. But those alternatives, having been developed and deployed to varying degrees of success, are worth considering even by those whose values do not include pacifist scruples: for those who merely consider government funding to be suboptimal.

Practice

There are two main families of tax refusal strategies, each of which has numerous variants:[3] In the first family, practitioners owe taxes to the government but neglect to pay them. In the second, practitioners organize their affairs in such a way that they do not owe the taxes to begin with.

I don’t intend to explain these strategies in detail here, but I’ll give a bird’s-eye view of the strategy landscape. This is based on how tax redirection is practiced in the modern U.S., where the national government mainly relies on income-based taxation (rather than, say, a value-added tax or customs duties). Other countries (and historical periods) have their own sets of strategies.

Refusing to pay taxes you owe

There are a few ways to refuse to pay an income-based tax. One is to arrange one’s affairs such that one is personally responsible for paying the tax (so it isn’t automatically taken from one’s paycheck), and then to simply not write the check when the bill comes due. Another is to earn one’s income in such a way that the income does not come to the attention of the government (e.g. in the “underground economy”). Another is to dishonestly report income, deductions, and tax credit qualifications in such a way that it erases any tax that you owe.

The first set I’ll call the “above-board” methods; the latter two the “sneaky” methods.

Above-board refusal methods

One common way to avoid tax withholding is to become self-employed. In the U.S., self-employed people are responsible for doing their own tax withholding and payment, and so also have the power to stop such withholding and payment should they choose to do so.

Another possibility, for those fortunate enough to have the option, is to live off capital gains rather than earned income.

Salaried or wage-earning employees typically are more limited in the extent to which they can stop or reduce withholding from their paychecks. An employee can file a new W4 form with their employer in order to eliminate income tax withholding (but not payroll tax withholding a.k.a. FICA). But a few years down the road when the government gets wise to what’s going on, they are likely to demand that the employer disregard the W4 and resume withholding taxes. So this is only a temporarily successful method.

People who resist in this manner file ordinarily honest and accurate tax returns that show a large tax due (the tax that was not withheld over the course of the year). Then they file their returns, but without submitting this payment.

The I.R.S. (the tax-collecting body in the U.S.) responds with a series of notices to the taxpayer with increasing use of boldface type and exclamation marks as the months pass. They also add penalties and interest to the delinquent amount. At the time of this writing I believe the annual interest rate in effect is 8%; it rises and falls periodically to stay a bit above the inflation rate. Penalties accrue at a rate of 0.5% of the delinquent amount each month until they reach a maximum of 25% of that amount.

To give you some idea of the effect of penalties and interest, by the time my tax delinquencies have reached the ten-year statute of limitations they have typically grown to be a little less than double the size of the original tax debt (in nominal, not inflation-adjusted dollars).

The I.R.S. may eventually attempt to seize this money. While they have considerable authority to do this, for various reasons they are not very good at it, and they often leave money on the table (as in my case, in which the statute of limitations has tolled on multiple tax years even though the I.R.S. has, as far as I can tell, enough information to go on that it could seize assets from me if it got down to it). They seem prone to throw in the towel after attempting to go after a few low-hanging-fruit asset categories:

  • Bank or (non-retirement) brokerage accounts for which they have already received a 1099 form (in the U.S., this form covers the mandatory tax reporting of interest, dividends, and similar payments by the issuer).
  • Salary income which they can levy (partially) via your employer.
  • Tax refunds or other direct payments from the federal government itself. (They may, for example, keep 15% of your Social Security check and apply it toward your taxes.) The I.R.S. tends to drop the ball here, too, surprisingly. For example, all of my Covid-era “stimulus” checks arrived at my door intact although I had tens of thousands of dollars of delinquent taxes at that time.
  • After a good long while, if you owe enough, they may place a lien on any real estate or other large-scale property you might own or have an interest in (property whose transfer must be mediated by government). This would mean they could collect money from the proceeds of the sale of such property were you to try to sell it while the lien is in effect.

So part of the friction of these tax refusal methods is that they work best if you take care to avoid having easily-seizable assets of this sort.

If you can put up with I.R.S. junk mail and avoid income/asset seizure for ten years, the statute of limitations kicks in and you are off the hook for the delinquent taxes, as well as the accumulated interest and penalties.

There is a law on the books that makes willful failure to pay taxes a criminal offense. However it is almost unheard of for the U.S. government to criminally prosecute someone who files an honest and correct tax return but who will not voluntarily surrender the money. The government instead relies on the above-mentioned civil penalties and seizures, and ordinary debt collection tactics like pleading letters, as its incentives in such cases.

Sneaky refusal methods

Sneaky tax refusal methods are pretty much the same as the many varieties of commonplace tax evasion: not filing returns, not declaring income, claiming deductions & credits you do not actually qualify for, and so forth.

The advantage of these methods is that if you don’t get caught, you don’t have to worry about penalties & interest or about seizures.

Among the disadvantages are that if you are caught, the penalties are more severe (and are much more likely to include criminal penalties), and that the ten-year statute of limitations does not apply: so the tax, interest, and penalties are your permanent sword of Damocles.

However, the government only discovers a fraction of such cases, and only has the resources to pursue some of those it discovers. Those who practice these methods of refusal are relying in part on playing the odds, in part on matching their wits against those in the tax bureaucracy.

Not owing in the first place

The second family of refusal methods involves not owing the tax in the first place.

If you’re loaded, for example, maybe you can get by fine without earning further income, and so income taxes will be among the worries of life your good fortune keeps at bay.

For those of us of more modest means, there are other ways to legally eliminate certain taxes on income and reduce others.

On the upper-end of “modest”, there are the variety of legal or barely-legal tax-dodging strategies that are favored by the well-to-do and that are almost our national sport. Many are more trouble than they’re worth to the more typical taxpayer—unless that taxpayer is unusually motivated to lower their tax bill (if, for example, there is an ethical multiplier to the more pedestrian financial cost/benefit analysis). If you are willing to put in the effort and to read the fine print, and if you place a value on reducing your taxes that goes beyond the value of thereby increasing the income you can retain, it may be worthwhile to discuss with a tax expert the various ways you can cleverly reorganize your affairs to convert taxable income into untaxable wealth.

In the mid-range of “modest” are the many varieties of tax incentives that are available to the typical taxpayer but that many of us fail to take advantage of for various reasons: things like Health Savings Accounts, tax-deferred retirement accounts and the retirement savings credit, and so forth. If you become convinced that there is value in keeping your money out of Uncle Sam’s pocket, that value may be enough to motivate you to learn more about how you can qualify for such credits and deductions.

Finally, there is the more radical solution of voluntary simplicity: Learning how to live large on an income that is below the threshold at which income tax applies. This is one of the methods I practice, and I have not owed any substantial amount of federal income tax since 2003,[4] even while living what seems to me to be an objectively rich (if not in the sense of “wealthy”) life in pricey coastal California. If you haven’t heard the philosophers and prophets shouting this from the rooftops yet, let me be the first to tell you: some of the most valuable things in life aren’t purchasable. People in their pursuit of money and consumer goods can unwisely neglect things that they would, on reflection, value much more highly than what they’ve traded them for. A life of voluntary simplicity can be a much less expensive one, but if it’s a poorer one you’re doing it wrong.

In cases like these, “redirection” is less cut-and-dried. If you reduce or eliminate your tax, what is there to redirect? In my case, the redirection was in part a redirection of time. Before I reduced my income below the tax line I was working a full-time job. Now, in order to earn less income, I also work much less. This has allowed me the time to volunteer for charitable organizations such that I now put in twice as many volunteer hours as paid hours per year.

What about the tax deduction for charitable contributions?

Perhaps you are thinking: “Wouldn’t the best way to redirect taxes legally be to earn all the money you can, give away a ton of it to good causes, and then take a tax deduction for charitable contributions to eliminate your taxes?”

Unfortunately, in the U.S. it is not typically practical to zero-out the income taxes you owe by means of the tax deduction for charitable contributions. This is for a few reasons. For one, the deduction for charitable contributions is limited to a percentage of your adjusted gross income (lately, 60% or less, depending on the type of charity). But also, this deduction is an itemized deduction. You can only take itemized deductions if you forego your standard deduction. This means that you do not begin to reduce your taxes at all until your itemized deductions exceed your standard deduction. (If your itemized deductions are already high for some other reason, this may be less of a problem for you.)

If you’re earning-to-give in the highest income tax bracket, you should be aware that even if you get the highest allowable charitable contributions deduction, you’re still earning-to-give about 18¢ of each dollar to be spent by the ethical nincompoops in Congress rather than your charity of choice.

Objections anticipated

Objections to tax refusal and redirection can typically be categorized as:

  1. It’s not ethical.
  2. It’s not safe.
  3. It’s not effective.

I don’t find these objections very convincing (if I did, I’d be convinced by them and stop), but here is a sketch of some of them. If there are any others that you find particularly show-stopping, please make note of them in the comments.

It’s not ethical

Sometimes the not-ethical critique is leveled at particular varieties of tax refusal and redirection, such as those that involve filing dishonest tax returns. Such critiques are not criticism of tax resistance as such, but of dishonesty, and so addressing them is a little out-of-scope here. Since they apply only to a subset of tax refusal techniques, I’m inclined to just concede the point and consider the other techniques instead.

But this variety of critique can also be directed at tax refusal in general. As such, it usually takes a form something like this:

Government and the rule of law is a mixed blessing, but it is indeed a blessing and beats the alternative. It’s also fragile and depends on the consent of the governed. The consent of the governed is in part a kind of mutual bargain: I consent to be subject to government because I see that my fellow-citizens are similarly subject. What I lose from being under the thumb of The Man, I gain from being protected by that same stately digit. But if people notice too many free riders who get the benefits of government without suffering the drawbacks, the consensus that allows government and the rule of law to operate is in danger of unraveling. Tax refusers are free riders of this sort and as such are a menace to domestic tranquility.

I can see the intuitive appeal of this sort of critique, but to me it seems too much like a political philosophy just-so story. It strikes me as the kind of excuse you might come up with if you began with the conclusion that tax refusal was a bad idea and you wanted to work backwards into a plausible story of why that was the case. I don’t have a knock-down argument for why this critique is incorrect; I just find it too speculative and abstract to outweigh the more concrete, dollars-and-cents case in favor of tax redirection. For example: Why exactly should I expect the rule of law to collapse (rather than for the government to be reformed or replaced) when the consent of the governed wavers: could the results not just as plausibly be positive ones? And just how much weight am I supposed to assign a quiet tax redirection, on the scale of threats to government legitimacy, compared to, say, commonplace contemporary political rhetoric?

I’m also less convinced of the baseline benignity of government and the rule of law than most, so this sort of argument has a harder time getting traction with me. Your mileage may vary.

Some people also consider taxes to be ethically equivalent to a voluntarily-contracted debt, such that it would be underhanded and unethical to refuse to pay in the same way that it would be to skip out of a restaurant before your bill arrives at the table. Such people invert the libertarian slogan “taxation is theft” to “tax avoidance is theft”. If such an argument resonates with you, that might also be sufficient reason not to consider (at least some forms of) tax redirection.

It’s not safe

Suggestions of tax redirection are often countered by insistence that it’s foolhardy: If you don’t pay your taxes, the I.R.S. will seize your home and your car and take you to court for all you’ve got and throw you behind bars. (This of course only applies to the owe-but-don’t-pay methods; if you don’t owe to begin with, I.R.S. enforcement is a non-issue for you.)

Admittedly, there have been times and places where it has indeed been dangerous to neglect to cough up the demanded tribute, but the United States in the 21st century is not one of them.

For example, the threat of jail time for failure to pay taxes is in the being-struck-by-lightning or shark-attack category of rarity. In 2022, 8,143,000 federal tax returns were filed in which the filers failed to pay what the returns said they owed. There were also at least 413,000 taxpayers who failed to file returns (only counting the ones the I.R.S. knows about).[5] That same year, the I.R.S. successfully prosecuted 699 people for tax crimes of all sorts.[6] Even if every one of those prosecutions had been of people who merely refused to pay (or to file and pay), that would mean that an individual tax scofflaw would have had something like a 1 in 12,000 chance of being brought up on charges.

Property seizures are also vanishingly rare these days. Between 2012 and 2021 the agency averaged about 350 such seizures each year. That includes all tax enforcement activity: as a tax redirector waiting to have your property seized, you’d be in a long line somewhere behind Colombian drug lords and Russian oligarchs.

The risk of salary levies and bank account seizures is higher, however, and definitely rises to the level of a real risk that a non-payer (at least one who practices one of the owes-but-doesn’t-pay methods) is likely to face. If you are unlucky enough to have an account or salary levied upon, you face an abrupt financial loss that could be difficult to navigate if you haven’t prepared for it, as well as potential embarrassment (e.g. if your employer wonders what’s going on) and inconvenience (your bank account may be frozen for a month while all the paperwork goes through, outstanding checks might therefore bounce).

If your tax delinquency rises high enough ($59,000 as of this writing), the government may refuse to issue or renew your passport: another legitimate risk, but one with a straightforward mitigation strategy (keep your redirection below that threshold).

There are more- and less-safe ways to redirect, and for most of the risks there are known strategies to mitigate them. Again, the U.S. war tax resistance movement has a wealth of institutional experience with this sort of thing, and you should definitely consult their instructional material if you are interested in redirecting federal taxes in a way that most prudently meets your goals and your risk tolerance.

They also have developed a mutual-aid method of mitigating risk: the War Tax Resisters’ Penalty Fund. It works this way: if a war tax resister has money seized by the government to pay delinquent taxes, they can apply to the fund for 100% reimbursement of any penalties & interest that were part of the seized amount. (The money is raised by passing the hat among other war tax resisters and sympathizers.) That way the resister themself does not lose any more money than they would have if they had just paid the taxes initially. This fund is only available to resisters who resist from an anti-war motive, but there is nothing stopping a group of otherwise-motivated resisters from starting a similar mutual-aid insurance pact.

The last time a war tax resister applied to that fund (as of this writing) was in September, 2019, which is one measure of how infrequently the I.R.S. has been seizing money from stubbornly determined tax refusers lately.

One caveat about my mostly-reassuring story about the risks of tax redirection is that it leans heavily on what the actual policy of the I.R.S. over the last few decades has been. Things could be much different, and that’s only a policy change away. The I.R.S. could become better-funded and less bureaucratically catatonic, or the government could decide to become more aggressive in going after resisters. If you’re waiting ten years for the statute of limitations to toll, or if you’re playing the odds based on precedent of lax investigation of iffy tax strategies, that could be a problem. Past performance is no guarantee of future results, as the standard disclaimer says.

It’s not effective

Finally there is the criticism that tax redirection is not effective, or not sufficiently effective. This might take one of these forms, for example:

  1. Though you might get away with it, you may also fail, in which case you will be on the hook for interest and penalties and thereby end up worse off than if you had just paid up in the first place.
  2. Even if you consider funding the government to be a net negative, at the margin where your personal taxes apply to government spending the effect is negligible. What the government fails to get from you, it’ll get some other way, and its spending isn’t meaningfully influenced by its revenue anyway.
  3. Even if we grant that it would be ethically better to fund (say) a GiveWell-endorsed charity than the U.S. Treasury, and even if we grant that it can be reasonably safe to do so, the amount of fuss you have to go through to do this well is great enough that you would be better off devoting that effort to something else. For instance if you just put that effort into earning more money, even after the government took its cut you could do more good than you would by painstakingly defying taxation.

You’ll just end up paying more in the end

For the first of these criticisms, here are some figures that may help you evaluate it. The U.S. Government Accountability Office does a periodic audit that includes data on I.R.S. collection efforts. The latest one I found[7] gives the following figures:

  • There were about $612 billion in outstanding, overdue tax assessments at that time.
  • $201 billion of these were categorized as “currently uncollectable” (“include[s] taxpayers who agree they owe the tax but are unlikely to pay and businesses with extreme financial hardships”).
  • Another $77 billion were “write-offs” (tax debt that is hopelessly noncollectable because the taxpayer is bankrupt, insolvent, dead, vanished into thin air, or something of that sort).
  • Another $88 billion is something called “compliance assessments”—when the IRS tells a taxpayer who hasn’t filed a return (or a fully-revealing one) what the agency suspects the taxpayer would have owed if they had filed accurately, but the taxpayer isn’t going along with it and the controversy is still in limbo. The agency doesn’t have much confidence in collecting this money either.
  • That leaves $246 billion in “delinquent unpaid assessments” for which the agency has some hope of recovering the money through its enforcement efforts. But even for this segment, the GAO gives a figure of only “21.9% collectability”: roughly $54 billion.

So while in any particular individual case, there is indeed a chance that the resister will end up paying more in the end because they got unlucky, in the aggregate, the government only collects a small fraction of what people do not voluntarily pay.

Of course a rough calculation like this can only give you an estimate of your actual risks. You are not an average taxpayer, but a unique one. You likely do not have plans that include joining the bankrupt, insolvent, dead, or missing “write-offs” category, for example. On the other hand, if you are considering redirection in a deliberate way, you can also plan ahead in ways that ordinary delinquent taxpayers typically do not, and so you can reduce your odds of being collected upon.

Pay or don’t pay, the effect on government actions is the same

This second criticism is most relevant to those whose calculus of redirection includes a term for not wanting to contribute to what they see as a net harm (or perhaps absolute immorality) of the results of government spending.

For the purposes of the argument on this page, it is less relevant. Whether your favorite effectively altruistic charitable use of your money is vastly superior to the harm that the government would do with the money, or whether it’s vastly superior to the mostly-symbolic act of burning that money on a pyre constructed out of a 1040 form, it’s still the better choice.

At most, this criticism (if valid) likely just means a modest adjustment of your cost/benefit calculation.

It’s not worth the fuss; there are better ways

This last criticism seems plausible to me, but I really would want to see the math (and the follow-through).

I suppose for each plausible method of tax redirection you could come up with an estimate for how much good your redirection would do and how much exertion it would take to do it successfully, then estimate how much good you might do with that much exertion applied in some other reasonably optimal way, and see how they compare. Seems like a difficult task with mighty error bars, but potentially doable. For my part, my eyes glaze over when I try to ponder all of the variables and how I might estimate their values.

I admire anyone who can come up with such a calculation that approaches rigor and completeness. Myself, I eyeballed it and went with my gut. In my case, some of the most substantial positive side effects of tax refusal I have experienced were ones I did not anticipate before I began, and I’m pretty sure I overestimated the likelihood and severity of the negative ones at the outset. But I wouldn’t want to suggest that my n=1 experience with this should be considered typical: my life situation, personality, aspirations, resources, and so forth all contributed to how things have gone for me, and everyone gets dealt their own set of cards there.

Conclusion and summary

Tax redirection is a promising addition to the arsenal of techniques effective altruists can use to better deploy their resources in ways that further their values. There are a variety of ways one can go about it, depending on one’s values, goals, and risk-tolerance. The U.S. war tax resistance movement has a good understanding of these various methods as they are practiced in the U.S., their pros and cons, and strategies for doing them most effectively. Tax redirection is probably not for everyone, but ought to be considered more carefully and more seriously than is currently common among those interested in pursuing effective altruism.

  1. ^

    GiveWell, by the way, does not endorse my action and in fact (since this post was originally posted) has explicitly disavowed it and asked me to stop redirecting my taxes through their fund. In their email to me explaining this, they wrote: “We saw your post on the LessWrong forum regarding the provenance of your GiveWell donations and have since thought carefully about what the right gift acceptance policy is for GiveWell. Going forward, we are implementing a policy that we will not accept donations that we have reason to believe come from an illegal activity. As a result, we would prefer that you not direct those donations to GiveWell, and we plan not to deposit any future checks that we believe come from withheld taxes.”

  2. ^

    This is an oversimplification. Not all war tax resisters are pacifists, and not all resist from motives of conscientious objection. For more information on war tax resisters in the U.S. and their methods, see the website of the National War Tax Resistance Coordinating Committee.

  3. ^

    In the U.S. war tax resistance community, it’s commonly observed that there are about as many tax resistance techniques as there are resisters.

  4. ^

    The unpaid taxes the I.R.S. periodically sends me pleading letters about are unpaid self-employment taxes, which are distinct from the federal income tax—they’re also a tax on income, but more akin to the FICA/payroll-tax that salaried employees pay.

  5. ^
  6. ^
  7. ^

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33 comments, sorted by Click to highlight new comments since: Today at 4:52 AM

I think this post neglects one of the most serious risks: that adopting a strategy is correlated decision across agents, that others will correctly see that happening, and that the downside risk is significantly magnified by those dynamics.

Naive 1st-order utilitarianism gives you the wrong answer here.  Do not illegally skip on paying your income taxes to donate to charity.  Spend your cognitive resources getting a better job, or otherwise legally optimizing for more income.  Being a software engineer at many tech companies will enable you to donate six figures per year while maintaining a comfortable lifestyle, without restricting your ability to engage with financial infrastructure, own property, or travel.

Even if you're an anarchist who thinks taxation is theft, to say willful nonpayment of taxes to donate is effective altruism is absurd, the consequences of this are just obviously very bad, both the idea and the advocacy. One publicized case of a person willfully refusing to pay their taxes in the name of effective altruism can do much more damage to it than many such people donating a bit more, and even if a particular case is invisible, the general practice is visible (Newcomb issues). Consider how much damage SBF and FTX have done to the causes of effective altruism, pandemic prevention, AI safety. There are billions of dollars committed to effective charity, and thousands of people trying to do good effectively, and people tying commonsense wrongdoing to it with crazy rationales has a serious damaging multiplier effect on the whole.

Any dollar donated through this method is in expectation going to cost multiple dollars worth of similar donations (plausibly a huge number) equivalent through such damage. It would be much better for the world if tax scofflaws were spending their taxes due on gambling or alcohol rather than effective altruism.

upvoted for interesting ideas and personal experience on the topic.  If I could strong-disagree, I would.  I do not recommend this to anyone.

Mostly my reasoning is "not safe".  You're correct that historically, the IRS doesn't come at small non-payers very hard.  You're incorrect to extend that to "never" or to "that won't change without warning due to technology, or legal/political environment".  You're also correct that, at current interest rates, it's about double at ten years.  You're incorrect, though, to think that's the biggest risk.  If they decide there's a pattern that shows intent, penalties become MUCH higher.  Unlikely to include jail time, but in terms of net expectation over all possible universes, it's zero or somewhat negative for almost everybody.  Admittedly, weighted toward "most get away with small amounts, a few have a VERY BAD experience".  But you could recreate that in Vegas with a simple 3- to 6- step martingale.

I also warn about lifestyle-distortion effects.  Unless you reverse course and pay up (which is probably possible "just" by paying the back taxes and penalties, until some IRS investigator decides to start seriously documenting your intent), you can't take a good W-2 job, can't invest in real-estate, and need to keep a low enough profile that the IRS doesn't decide to actually go after you.

I believe it's not actually true that, if you merely repeatedly neglect to pay your taxes, the I.R.S. will inquire into your motives and intent in order to decide whether to come after you with both barrels blazing. As far as I can tell they do not have the resources or inclination to do that sort of investigation.

I base this largely on the experience of American war tax resisters. They are often loudly self-incriminating about their willful intent: sometimes going so far as to write letters to the I.R.S. explaining their motivation. Of the tens of thousands of Americans who have engaged in war tax resistance over the years, I know of only two in the past 80 years who have been criminally prosecuted merely for willful refusal to pay taxes (there have been others who have been criminally prosecuted or jailed for things like filing inaccurate forms or contempt of court, but those were cases in which they were defying the law in ways that went beyond merely not paying). The war tax resistance movement keeps pretty good records on its "martyrs" so if there were other cases like those two they would probably have come to my attention.

I think that if your government is basically a protection racket, extorting resources from its subjects while providing minimal benefits, then refusing to pay taxes seems pretty ethical to me.

But if you think your government is, overall, something that you would rather preserve than destroy, then I think the ethical case for paying taxes is pretty strong.

Most people would say that you shouldn't steal, murder, cheat your business partners, etc. even if you could get away with it and donate the proceeds to charity.  I think the widely-accepted justifications for not doing that are, broadly:

  • Some form of deontology that says you need to follow those basic rules of fair play even if the utility is not great.
  • Consequentialist reasoning that breaking these rules damages society's ability to coordinate around the rule that was broken (and, to a lesser extent, to coordinate around any rules at all), and this societal ability is so immensely valuable that this outweighs other considerations in most realistic scenarios.  (Especially considering that your lying brain will exaggerate the societal benefits of anything it thinks is in your self-interest.)

If you accept either of those arguments for not robbing a store, and you think your government is on-balance good to have around, then I think you should also accept those same arguments for paying your taxes.  If the government is basically legitimate, then evading taxes is pretty similar to theft.  At minimum, it's defecting from a societal rule that is widely considered important and which has been thoroughly ratified by our standard societal-rule-process.

The consequentialist bullet-point above is similar to the ethical objection that you argue against in the OP, but I think you've imagined the commons-being-damaged too narrowly and thus significantly underestimated the value at stake.  For instance, maybe you think our current tax rules are bad, but perhaps you'd like the ability to have and enforce any tax rules at all, even when some of your fellow citizens disagree with you about what rules are ideal.  Will you be able to have that, after establishing that you think it's OK to refuse to pay taxes just because you think the current system is inefficient?

I also think this specific objection you make is very far-fetched:

Why exactly should I expect the rule of law to collapse (rather than for the government to be reformed or replaced) when the consent of the governed wavers: could the results not just as plausibly be positive ones?

Imagine using this argument against one of the more widely-accepted rules I mentioned above, like murder:

Alice:  You shouldn't murder people, even if you could get away with it and the world would be better off without the specific person being murdered, because that would damage society's ability to coordinate around the very important "generally don't murder people" rule.

Bob:  But if that rule loses popular support, why wouldn't it just be replaced by a new rule?  And couldn't that new rule just as easily be an improvement?

Good rules are a small target in possibility-space and it takes work to hit that target.  If you want to get a better rule, you'd better put a lot of effort into coordinating with other people and carefully channeling your force towards that small target.  It seems incredibly naive to me to think you'll get a good rule automatically just because you smash the existing rule.

Additionally, there must be some historical reason that we have the rule we have.  For important, high-profile, long-standing rules (like murder, or taxes), a plausible guess at that reason would be that it was the best rule our predecessors could realistically get.  Unless you have some specific reason for thinking you can do better than them, it seems fairly unlikely that you could get a substantially better rule even with a highly-coordinated effort.

Bob is also imagining this as a clean switch from rule A to rule B, whereas in reality there will probably be a long period (maybe indefinite) when rule A is damaged enough to become less effective but not damaged enough to collapse.

There's also inevitable collateral damage to other rules.

You complained that the objection you were responding to seemed like a rationalization that someone would make up if they had already decided on the answer and wanted a convenient justification.  But this particular counter-objection seems like pure wishful thinking to me.  Yes it's possible to imagine a good outcome, but is that outcome likely?  How much effort are you currently putting into steering towards this hoped-for good outcome?  Will your fellow scofflaws even agree with you about which outcomes would count as "good"?

I think civil disobedience is sometimes a good tactic for protesting a bad rule, but you should have at least a rough proposal for how you want the rule changed and an overall strategy for actually getting that change.  It's also exceedingly suspicious if your "civil disobedience" involves keeping a low profile and putting money into your own pocket, rather than making headlines and going to jail for it.

For instance, maybe you think our current tax rules are bad, but perhaps you'd like the ability to have and enforce any tax rules at all, even when some of your fellow citizens disagree with you about what rules are ideal.

I think income taxes are dumb. Instead I think taxation should begin with Pigovian taxes on negative externalities, then if more money is needed Georgist taxes on supply-inelastic factors, and then finally if the government somehow needs even MORE money it should resort to consumption taxes like VATs and stop there. Does this method inhibit the ability to collect those?

In my model, every act of societal rule-breaking slightly undermines literally every societal rule (although if the rule in question is bad enough this might be worth it).  So that's a trivial "yes".

If we restrict things to more direct effects, I think most people are realistically going to interpret your policy as "don't pay taxes that I personally don't agree with" rather than "don't pay income taxes in particular, there is something a priori special about income taxes specifically that puts them into a fundamentally different category from all other taxes, this is definitely not a category that I made up retroactively because it happens to be convenient for me in my current circumstances", no matter how much you protest that your real policy is the second thing.  Therefore if they agree with income tax and disagree with Georgist tax, they will think they can ignore Georgist tax and that you will have no right to complain when they do.  So, again, yes.

It kind of passed without much note in the post, but isn’t the passport non-renewal one of the biggest limiters here? $59,000 divided by 10 years is $5,900 per year, so unless you’re willing to forgo having a passport that’s the upper limit of how much you could benefit from non-payment (exclusive of the tax liability reduction strategies). That seems like a pretty low amount per year in exchange for having to research and plan this, then having your available income and saving methods limited (which could easily lower your income by more than $5,900 just by limiting the jobs available to you).

Last I heard, about 40% of U.S. citizens don't have passports to begin with, so I expect that at least for some readers, this isn't such a big deal. For the rest it is certainly a consideration to factor in. Note that it typically takes some time before it becomes a problem: you accumulate $59,000 (actually more, as this number is inflation-adjusted) in delinquent taxes, the I.R.S. notices you're over the limit and submits paperwork to the State Department, then somewhere down the line your passport expires and you're unable to renew it until you resolve the tax delinquency (and go through a State Department paperwork dance of your own).

High income rats are presumably disproportiatly likely to want a passport. 

Thanks for this, consider me another strong disagreement + strong upvote.

I know a nonprofit which had a tax issue - they were financially able and willing to pay, but for complicated reasons paying would have caused them legal damage in other ways and they keep kicking the can down the road until some hypothetical future when these are solved. I can't remember if the nonprofit is now formally dissolved or just effectively defunct, but the IRS keeps sending nasty letters to the former board members and officers.

Do you know anything about a situation like this? Does the IRS ever pursue board members / founders / officers for a charity's nonpayment? Assuming the nonprofit has no money and never will have money again, are there any repercussions for the people involved if they don't figure out a legal solution and just put off paying the taxes until the ten year deadline?

(it would be convenient if yes, but this would feel surprising - otherwise you could just start a corporation, not pay your taxes the first year, dissolve it, start an identical corporation the second year, and so on.)

Also, does the IRS acknowledge the ten-year deadline enough that they will stop threatening you after ten years, or would the board members have to take them to court to make the letters stop?

(it would be convenient if yes, but this would feel surprising - otherwise you could just start a corporation, not pay your taxes the first year, dissolve it, start an identical corporation the second year, and so on.)

This (a consistent pattern of doing the same thing) would get you prosecuted, because courts are allowed to pierce the corporate veil, which is lawyer-speak for "call you out on your bullshit." If it's obvious that you're creating corporations as a legal fiction to avoid taxes, the court will go after the shareholders directly (so long as the prosecution can prove the corporation exists in name only).

Thanks for the response. This goes far enough afield of my expertise that I don't think I can give very helpful answers to your specific questions. I don't have any experience with corporate tax refusal of this sort. In the very limited anecdotal reports I've seen, it seems like the IRS is most likely to crack the whip and potentially pursue corporate officers when 1) the corporate entity fails to pay employment taxes (payroll/social-security taxes) after withholding them from employees' paychecks, 2) when there's actual fraud/dishonest filing involved, 3) when there's no filing of required forms; in roughly that order of severity. I'm much less confident in anticipating the IRS's behavior here than I am in the case of individual tax-nonpayers.

As far as the 10-year limitations deadline, again here I have much less information to go on for corporate taxpayers than for individuals. I know in the case of individuals, once the tax debt passes the "collection statute expiration date" it just sort of vanishes from the system and so they stop bothering you about it.

Note that if the corporate entity formally files for bankruptcy that this suspends the ticking of the statute of limitations clock until six months after the bankruptcy is resolved.

This post obfuscates more than it illuminates. People should pay all the tax they legally owe, and should be free to reconfigure their affairs to reduce the amount they legally owe, if that overall seems good/worth it to them.

Conflation of "reduce what you legally owe" and "don't pay what you legally owe" is bad and unhelpful to anyone.

We live in a society here man, c'mon.

Why?

Some people don’t believe in the moral imperative to pay taxes they legally owe.

I don't see much similarity in the considerations that go into the question of whether to pay what one legally owes, and whether to rearrange one's affairs in a manner that results in less legal tax liability. So presenting them as two species of fundamentally the same thing doesn't help anyone understand or decide anything relevant.

On the actual moral question, I think "hey why don't we just not pay tax" is the same species of terminal misaligned EA-brain that led to SBF.

The consideration war tax resisters have is that it's bad for the government to get tax money it can spend on wars. Thus refusing to pay what one owes and not owing are equivalent in their effects.

They are equivalent in their effects on governmental tax receipts. Other effects vary significantly.

Also, it's not clear that governmental tax receipts actually constrain government spending, at least not directly. And if you are talking about whether your specific dollar goes to some bad effect, I think the "it's not new" flavors of MMTers* have it right - government spending creates dollars and taxation destroys dollars. So there's no more direct connection between your personal tax dollars and any particular government spending. Government creation of dollars by spending overall can be more or less inflationary depending on how many dollars government destroys by taxing.

* MMT has often been characterized as either not new or not true, and there are different claims it makes. I would say that the alleged "not new" claims are in fact true, and make no claim regarding the agreed-new but allegedly not true claims.

Well, on the similarity/difference point, I would say that the line between legally rearranging one’s affairs and not paying what is owed is a very thin line. Government usually doesn’t like when you rearrange stuff to reduce your taxes and thus often the legal doctrine says that as long as your primary motivation in rearranging your affairs was lower tax it’s classified as a tax evasion and thus illegal.

On the morality point, I am not defending the deranged “the end justifies the means” principle. All I am saying is that many people don’t consider the power the government is exerting over them (eg the power to collect taxes) as legitimate and thus don’t see anything wrong with not paying the taxes.

This doesn't seem very effective. Your best-case outcome, by evading $117k total of taxes, has been to donate $5k/year, which means that even an EAer who has been doing relatively badly at 'earning to give' is probably going to out-donate your entire lifetime impact in a single year or two. I don't donate very much and make much less per year than you do, but looking over my records, I think I've still donated substantially more to EA than you have. (And I imagine quite a few EAers or LWers make enough to pay $117k of taxes per year.) You've done this by accepting severe limitations on your lifestyle and career, and looking at your site's latest update, you have been incurring liens and bank account seizures and your passport is going to expire without renewal, which would severely hamper many careers & lifestyles which hadn't brutally curtailed themselves as much as you have. And if you wanted to fix any of this, you no longer have the assets to do so because you have lived in self-imposed poverty for so long and couldn't pay off your existing $90k+ liability. (Nor would I be very enthusiastic about the employment prospects of a freelance technical writer already struggling to get by over the coming decade...) Should any of the tail risks materialize (eg. health risks - you seem to put an awful lot of faith into that deductible, which is certainly a bold move for someone who is so dependent on one of the most dangerous hobbies there is, bicyling), they'll more than wipe out any of the benefits.

This is without getting into any of the PR or ecosystem concerns, of course - this seems so ineffective when one looks at the numbers & consequences, I don't think I'm worried about imitation.

I think I see where you're coming from on this, but there are a few things to consider:

First, a lot of your criticisms apply most strongly to my own particular idiosyncratic method, and when evaluating it solely as an effective altruism strategy. In fact, I chose the method I did largely as a variety of conscientious objection, not as effective altruism. My post here highlighted the possibilities of tax resistance as an effective altruism strategy, but my own motives for my resistance are more complicated and I did not choose my own method of resistance to optimize its charitable donation possibilities. If you judge it by that standard, it will admittedly look pretty weak. But it's also possible to choose tax resistance methods differently from how I have done, in a way that prioritizes effective altruism over conscientious objection, if your motives are different from mine.

Second, I think you exaggerate the precariousness of my position. I'm not impoverished. I'm actually doing pretty well. I put aside something like 35–40% of my income for retirement, and every year I put roughly the equivalent of my health insurance deductible into a Health Savings Account in case disaster (or distracted driver) strikes. I make about the median annual income for an individual in the U.S., and have saved up more than the median retirement savings for someone in my age bracket. I'm not "brutally curtailed" or living in "self-imposed poverty". I'm a reasonably well-off person living in the lap of luxury here in California and enjoying the fruits of the most fabulously prosperous time our species has yet experienced. I can't imagine feeling deprived like this.

Third, you underestimate the charitable impact of my resistance if you only include the $5k/year or so that I donate and ignore the hundreds of hours of volunteer work (not, perhaps, effective-altruistically optimized, but nonetheless good) my particular technique has helped me to put in.

Fourth, your argument that "if you wanted to fix any of this, you... couldn't pay off your existing $90k+ liability" is incorrect. If for some reason I changed my mind about all this and wanted to wipe the slate clean, if I were too poor to just pay the full amount, the IRS is like many debt collectors in this regard: it would rather get something than fail to get everything, so it's willing to bargain. It will ask you what you can afford (demanding that you fess up about your income and assets) and then come up with some figure that doesn't totally bankrupt you, telling you that you can eliminate your tax debt entirely if you can come up with this lower sum. It's called the Offer in Compromise program (https://www.irs.gov/payments/offer-in-compromise).

Copy-pasting an ACX comment here:

Hello,

Criminal Defense attorney here. I thought I'd weigh in mostly for trivia reasons to point out that several federal statutes do criminally punish the *mere nonpayment* of taxes.

26 USC 7202 makes it a felony:

https://www.law.cornell.edu/uscode/text/26/7202

Though the current *policy* of the IRS is that they won't use this statute against someone who doesn't have a duty to "collect" a tax from some other person, as in payroll taxes or some gambling taxes. This *might be* the literal limit of the law, but to my knowledge that hasn't been really formally assessed by any court. I wouldn't want to be the first case study.

26 USC 7203 is a related and much broader misdemeanor:

https://www.law.cornell.edu/uscode/text/26/7203

naturally, as a misdemeanor the penalty is possibly quite light...possibly no jail time (though potentially as you can see there up to one year)...it's still technically a crime and for most people reading this, the bite is going to be the conviction itself rather than like a month in a workhouse.

Empirically the IRS' motives are complex and they won't prosecute every violation of these laws that hoves into view but as I see it you're really dancing with the devil. Shower often, be nice to old ladies, and pay your taxes.

As I mention in my post: "There is a law on the books that makes willful failure to pay taxes a criminal offense. However it is almost unheard of for the U.S. government to criminally prosecute someone who files an honest and correct tax return but who will not voluntarily surrender the money."

American "war tax resisters" have been willfully refusing to pay taxes for decades, often going out of their way to make public declarations of their willful intent (sometimes in letters to the IRS itself). In the last 80 years, of the tens of thousands of American war tax resisters who have done this sort of thing, exactly two have been prosecuted merely for willful failure to pay. One was in 1942, and targeted the leader of an emerging war tax resistance movement (he was prosecuted for failing to purchase a war tax stamp to put on his car, so also this was not really an "income tax" refusal prosecution). The other was in 2005, and targeted an attorney who had two previous tax convictions and whose legal practice tended to get on the nerves of prosecutors by specializing in the vigorous defense of dissidents like Huey Newton, Judi Bari, Dennis Peron, etc.

Given this track record, I think it's accurate to say that criminal prosecution for willful failure to pay your income taxes is not the sort of thing the typical refuser has to worry about.

But perhaps someone who writes blog posts encouraging other people not to pay their taxes as a form of effective altruism is not your typical refuser...

I found this post interesting, mostly because it illustrates deep flaws in the US tax system that we should really fix. I downvoted it because I think it is a terrible strategy for giving more money to charity. Many other good objections have been raised in the comments, and the post itself admits that lack of effectiveness is a serious problem. One problem I did not see addressed anywhere is reputational risk. The world is not static, and a technique that works for an individual criminal or a few conscientious objectors probably will not work consistently for a large and coordinated group of donors, because society will notice and react. What effect would this behavior have on the charities you give to? I suspect most of them, if they knew about it, would justifiably refuse the money. What effect would it have on other organizations you might be associated with? They are now involved with and perhaps encouraging a known criminal, albeit one who probably won't be prosecuted.

In conclusion, I really wish I could vote to disagree with this post without downvoting to make it less visible. I think readers should be able to see it and also see that practically everyone disagrees with it.

In 2022, 8,143,000 federal tax returns were filed in which the filers failed to pay what the returns said they owed. There were also at least 413,000 taxpayers who failed to file returns (only counting the ones the I.R.S. knows about).[4] That same year, the I.R.S. successfully prosecuted 699 people for tax crimes of all sorts.[5] Even if every one of those prosecutions had been of people who merely refused to pay (or to file and pay), that would mean that an individual tax scofflaw would have had something like a 1 in 12,000 chance of being brought up on charges.

I have not checked your sources, but it sounds like the first number you are quoting is probably referring to the people who did not immediately pay their full tax when filing.  Have I misunderstood?

My models predict that the subcategory of people who continued to not pay their tax unless/until criminally convicted is substantially smaller, and that charges are vastly more likely to be brought against this subgroup than against others.  (The larger group also contains:  people who made a honest mistake; people who are legitimately but temporarily unable to pay, and will pay when they can; people who can be intimidated into paying by scary letters; people who have assets that can be easily seized.)

This suggests to me that your "1 in 12,000" number may be a rather substantial underestimate for the risk within the scofflaw subgroup.

Seems impractical if your income is a salary, which is quite common. But anyway thanks for posting this, it's very interesting. It's cool that there's a whole well documented community devoted to the workings of tax collection from an adversarial perspective. 

even while living what seems to me to be an objectively rich (if not in the sense of “wealthy”) life in pricey coastal California

^ I want to read an essay about this!

This is a very aggressive approach, but there are legal ways to change your tax status that can have a more positive impact. For example, you can time your giving to maximize charitable deductions and use that to give more.

Suppose you make $200K annually and give 10%. If you give $20K p/year to the charity of your choice, then there is a good chance that you won't be able to claim a charitable deduction (the standard deduction for a couple is $27,700--so you would have to find another $7.7K in itemized deductions and even then it is only any additional dollars that would be deducted). 

However, if you instead put the $20K in an index fund growing at 6% you'd end up with around $110K after 5 years. Give that to charity and you can deduct $96K+ from your income. That is tax savings of over $20K, which you can use to increase your giving.

I'm pretty sure there are limits to the pre-tax income you can put in an index fund (like a 401K).

This is not talking about pre-tax investment.

Please do not advocate violating the law in order to "do good" on the forum.