The Nonlinear Library LW - Redirecting one's own taxes as an effective altruism method by David Gross
Nov 13, 2023
24:12
Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Redirecting one's own taxes as an effective altruism method, published by David Gross on November 13, 2023 on LessWrong.
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. 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.[1] 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:[2] 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...
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. 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.[1] 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:[2] 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...