5 ms·

It's a funny one because it's potentially one of the most serious crimes. You're stealing from everybody, undermining the basis of trust in the entire system in

It's a funny one because it's potentially one of the most serious crimes. You're stealing from everybody, undermining the basis of trust in the entire system in which we live and probably in the long term eroding the basis of democracy. You're creating a non-level playing field. 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.

speedplane 7y ago
> It's a funny one because [Tax Evasion is] potentially one of the most serious crimes. You're stealing from everybody, undermining the basis of trust in the entire system in which we live and probably in the long term eroding the basis of democracy. You're creating a non-level playing field. 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.
- ryanmercer 7y ago
  >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. . >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.
  - akg_67 7y ago
    In lieu of the accuracy, you missed the essence.
    - ryanmercer 7y ago
      Many on HN think everyone in the United States makes a 6-figure salary because they do. It's a common theme, I pointed out another potential instance. 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.
      - peapicker 7y ago
        In the US, incomes between $9,701 to $39,475 are taxed at 12%, so the tax on 15,080 is actually $1,810 or 40% less than your estimate... at 63,179 the tax rate is 22% which is $13,899 - only a little higher than your estimate. 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)
- henvic 7y ago
  Tax evasion is not even a real crime. Tax is stealing from someone. Tax evasion and avoidance are great for society and we would be poorer if people didn't do it. Virtually all tax money usually goes to wars, warmongers, and the pockets of politicians and bureaucrats. Virtually nothing returns to society as services. 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. http://bastiat.org/en/twisatwins.html http://bastiat.org/en/twisatwins.html
  - to11mtm 7y ago
    In theory, sure, but reality is a bit of a prisoner's dilemma. 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.
    - henvic 7y ago
      I'd say it doesn't work like this. Instead, the state will try to charge as much as possible taxes from both of them while providing the least amount of service possible so someone not paying tax has a really low impact overall on the services the state is able to provide. 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.
speedplane 7y ago
> black and grey market activity are also I think quite an important counter-balance to the possibility of totalitarian government. 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.
- spottybanana 7y ago
  > that governments often tolerate because they don't see a threat to their power. 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.
  - speedplane 7y ago
    > You think for example the North Korean government happily tolerates the black markets there? No way. 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.
  - spottybanana 7y ago
    The point was happily. North Korean regime is at the point where they don't have any other sensible option than to tolerate the black markets.
    - bonzini 7y ago
      There's also another reason: black markets and widespread corruption make everyone a possible target of regime purges. Remember Al Capone, folks...
c3534l 7y ago
Psychologically it's hard to see the victim, so people don't count it. It's a terrible thing about human nature, but it is what it is. The person you're replying to will never see themselves on the same level as someone who mugs someone or robs a liquor store, not because the damage they've done isn't worse, but because it doesn't feel wrong. We invent all sorts of ways and reasoning that allow us to do awful things without feeling guilt. It's just a sad fact about us.
spottybanana 7y ago
> It's a funny one because it's potentially one of the most serious crimes. 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.
- wongarsu 7y ago
  > It is primarily your earned income where you pay taxes from. 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.
  - arethuza 7y ago
    I love J.K Rowling's views on paying tax: https://www.taxfairness.ca/en/news/j-k-rowling-paying-taxes-and-welfare-state https://www.taxfairness.ca/en/news/j-k-rowling-paying-taxes-...
  - missingrib 7y ago
    The "benefits" were forced upon you without your consent, though. And some of those are blatantly misleading. For instance, most of the defense budget isn't spent on protecting the US from invasion. Most companies protect their property by hiring security guards, not calling the police.
catalogia 7y ago
> [tax evasion is] potentially one of the most serious crimes. 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 https://www.youtube.com/watch?v=ljaP2etvDc4

speedplane 7y ago

> It's a funny one because [Tax Evasion is] potentially one of the most serious crimes. You're stealing from everybody, undermining the basis of trust in the entire system in which we live and probably in the long term eroding the basis of democracy. You're creating a non-level playing field. 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.

ryanmercer 7y ago
>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. . >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.
- akg_67 7y ago
  In lieu of the accuracy, you missed the essence.
  - ryanmercer 7y ago
    Many on HN think everyone in the United States makes a 6-figure salary because they do. It's a common theme, I pointed out another potential instance. 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.
    - peapicker 7y ago
      In the US, incomes between $9,701 to $39,475 are taxed at 12%, so the tax on 15,080 is actually $1,810 or 40% less than your estimate... at 63,179 the tax rate is 22% which is $13,899 - only a little higher than your estimate. 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)
henvic 7y ago
Tax evasion is not even a real crime. Tax is stealing from someone. Tax evasion and avoidance are great for society and we would be poorer if people didn't do it. Virtually all tax money usually goes to wars, warmongers, and the pockets of politicians and bureaucrats. Virtually nothing returns to society as services. 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. http://bastiat.org/en/twisatwins.html http://bastiat.org/en/twisatwins.html
- to11mtm 7y ago
  In theory, sure, but reality is a bit of a prisoner's dilemma. 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.
  - henvic 7y ago
    I'd say it doesn't work like this. Instead, the state will try to charge as much as possible taxes from both of them while providing the least amount of service possible so someone not paying tax has a really low impact overall on the services the state is able to provide. 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.

speedplane 7y ago

> black and grey market activity are also I think quite an important counter-balance to the possibility of totalitarian government. 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.

spottybanana 7y ago
> that governments often tolerate because they don't see a threat to their power. 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.
- speedplane 7y ago
  > You think for example the North Korean government happily tolerates the black markets there? No way. 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.
- spottybanana 7y ago
  The point was happily. North Korean regime is at the point where they don't have any other sensible option than to tolerate the black markets.
  - bonzini 7y ago
    There's also another reason: black markets and widespread corruption make everyone a possible target of regime purges. Remember Al Capone, folks...

c3534l 7y ago

Psychologically it's hard to see the victim, so people don't count it. It's a terrible thing about human nature, but it is what it is. The person you're replying to will never see themselves on the same level as someone who mugs someone or robs a liquor store, not because the damage they've done isn't worse, but because it doesn't feel wrong. We invent all sorts of ways and reasoning that allow us to do awful things without feeling guilt. It's just a sad fact about us.

spottybanana 7y ago

> It's a funny one because it's potentially one of the most serious crimes. 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.

wongarsu 7y ago
> It is primarily your earned income where you pay taxes from. 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.
- arethuza 7y ago
  I love J.K Rowling's views on paying tax: https://www.taxfairness.ca/en/news/j-k-rowling-paying-taxes-and-welfare-state https://www.taxfairness.ca/en/news/j-k-rowling-paying-taxes-...
- missingrib 7y ago
  The "benefits" were forced upon you without your consent, though. And some of those are blatantly misleading. For instance, most of the defense budget isn't spent on protecting the US from invasion. Most companies protect their property by hiring security guards, not calling the police.

catalogia 7y ago

> [tax evasion is] potentially one of the most serious crimes. 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 https://www.youtube.com/watch?v=ljaP2etvDc4