Tax evasion is a fairly soft crime, it’s shouldn’t be surprising there are people okay with facilitating it.
It’s not difficult to find people who believe, rightly or wrongly, the tax system is unfair.
It’s not difficult to find people who believe, rightly or wrongly, the tax system is unfair.
On the other hand, black and grey market activity are also I think quite an important counter-balance to the possibility of totalitarian government. It creates "gaps" let's say for more diverse human and economic outcomes. Which is also potentially good.
I think it's one of those indefensible things that we should tolerate a tiny amount of. Kind of like a vaccine in the body.
This is true, and in addition, it's a very unequal crime. To properly evade taxes and get away with it, you need professional help. Most standard W-2 employees can't afford it, i.e., for most, the cost to hire professional help evading taxes is larger than the taxes they could save.
However, if you're very wealthy, then the calculus changes: saving 20% taxes on $50M/yr income is a lot more attractive than saving 20% on $200k/yr income. Effectively, the wealthier you are, the easier it is to evade taxes, further exacerbating at least the perception (and quite likely the reality) of inequality.
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>than saving 20% on $200k/yr income
Erm, that's not a standard W2 employee's income. Not even close. The median U.S. household income was $63,179 in 2017.
40k of 200k doesn't make a big difference, 3016 of 15,080 (federal minimum wage @ 40 hours a week for a year) makes a HUGE difference as does 12,635.90 of 63,179.
Why do you think waitstaff and the like prefer cash tips? because they feel that no one will know if they don't report some or all of that income. Go ask any waiter, waitress, bartender, etc if they want you to give them that tip on credit card where they get taxed or cash where they don't. The same goes for electricians, plumbers, handymen, etc as they'll happily take cash first because they can fudge their numbers some.
At $200K, the tax rate is 32%, so the tax is really $64K, 160% of your estimate. (all for single filers or married filing separately; married filing jointly has wider bands, and the rates are less overall at the given combined income levels)
When people find a way to pay fewer taxes, it means money is not only not going to wars, but also being able to be used for better things for everyone.
Consider:
Person A is evading Taxes.
Person B is not evading taxes.
Government says 'Well, we aren't getting enough money', So they raise taxes on those who can't realistically evade. By a second order effect, Person A is causing Person B to get 'stolen from' twice instead of once.
They charge tax way higher than any of the services they provide truly cost (even if we put any efficiency concerns aside).
I'd even argue this impact is positive given that now money is freely circulating in society for other stuff. For me, society will eventually have other ways to finance infrastructure and social benefits that are not based on taxes, as it happens today – but this doesn't even mean something entirely new. Let's remember most fire companies, schools, hospitals, and other stuff we rely upon are either privately maintained (for-profit or not), the concept started like so, or both.
I don't really buy this: plenty of totalitarian regimes have illegal black markets, that governments often tolerate because they don't see a threat to their power.
A better way to counter a totalitarian government is via open communication and coordination of the government's subjects. Government's are far more afraid of this, which is why strict censorship and propaganda are the "go-to" tools for any totalitarian regime.
You think for example the North Korean government happily tolerates the black markets there? No way. If it would be easy for them to control them they would close them down. The black/grey markets happening in totalitarian countries are more like compromises - it would be too difficult to stop the activity without murdering half of the population or so.
They most certainly do. There are tons of articles based on satellite based cameras that track the rise and fall of small black markets in North Korea. Some markets lasted years, before being abruptly shut down for unknown reasons.
I would say it is often even opposite of it - black/grey markets help to stay in power. When everybody is breaking some law, buying something [almost] illegally, everybody wants to stay quiet.
And it helps [totalitarian] government a lot.
No. How about serial killers, real theft etc.
> You're stealing from everybody
No, tax evasion is not theft. It is primarily your earned income where you pay taxes from. Tax evasion is tax evasion, no reason to confuse it with other crimes.
Think about it this way: easiest way to avoid taxes is not to work at all. Are all those who are slacking off with government benefits, or living off from savings or inheritance stealing from us? No, they are just not working.
> You're creating a non-level playing field.
The playing field will always be non-level, you gotta deal with it. What about those who have a job at the government and are not doing any work? Are those also stealing?
Trust in society is a complicated issue. Often the industries where tax evasion happens are low-income jobs. I'm not saying it is right thing to do, but I don't think it is as serious crime as many others.
Income you were able to earn because infrastructure allows businesses to operate, police forces protect their property, physical safety and the shipment of goods, a court system allows peaceful resolution of conflicts, armed forces protect you from invasion, fire departments prevent entire cities from burning down by putting fires out early etc.
Taking the benefits without paying the democratically set price for a wide array of services is not that different from stealing.
https://www.taxfairness.ca/en/news/j-k-rowling-paying-taxes-...
Yes, but one of those benefits is privilege of excluding others from the use and enjoyment of goods—i.e., property—so if you reject it...
> Most companies protect their property by hiring security guards, not calling the police.
No, they hire security guards who call the police, not instead of calling the police.
That's not how democracy works. Many of these benefits only make sense if a whole area is covered (if your neighbor isn't serviced by to the fire brigade, that puts you at risk), so we instituted a voting system where people can elect representatives who set a tax rate and a budget detailing what that money is spent on.
If you feel like the selection of services is to your disadvantage you can also always go to another country. I hear Somalia has pretty cheap taxes, along with an accordingly small selection of services.
> That's not how democracy works.
That's exactly how democracy works. Unfortunately, a democratic society is not inherently a just society. It's just a bit more stable than autocratic societies due to integrating periodic small revolutions in lieu of less frequent but more severe transfers of power. The better versions have certain protections for minorities, which makes them less democratic but more just.
Moving to another country isn't a solution. That other country (yes, even Somalia) will already be infested with its own form of protection racket, and anything you could do to defend yourself against governments and wannabe governments in some other country you could do equally well right where you are. Moreover, why should you be forced to move away from the place where you were born just because someone else has drawn some arbitrary borders on a map and thinks it's too much work to create the system they have in mind without forcing everyone in that area to participate? How does their inability to exclude you from whatever benefit they think they're creating suddenly become your problem?
This reminds me of a joke I heard on Jerry Seinfeld's Comedians in Cars Getting Coffee series: https://www.youtube.com/watch?v=ljaP2etvDc4