My Last Paycheck as a U.S. Taxpayer

I got my final paycheck today. It includes a count for my total gross pay for the year, but doesn’t have complete numbers for some of my pretax contributions. I think I’ve got enough to go on to run the numbers again.

I’m using 2002’s 1040 form as a basis for my calculations. Since Congress is still arguing about next year’s tax laws, this is the best I’ve got to go on.

Those disclaimers aside, though, it looks like I’m in the clear. I’ll need to put $3K into an IRA, take another $3K in capital losses that my employer graciously provided me via the Employee Stock Purchase Plan, and spend another $1,300 or so on tuition. That’ll drop my Adjusted Gross Income below $15,000, at which point I’ll get a retirement savings attaboy credit for putting the money in the IRA which will wipe out any remaining owed tax.

Come 2004, I’ll get back everything that was withheld this year.

I’m participating in the noble american tradition of tax evasion in a way that even the IRS can’t fault, and I didn’t even have to move to Bermuda.

P.S. There’s a good article that was posted to AlterNet today called “War Tax Resistance Made Simple.” It talks about the various forms of tax resistance — from going on strike like I’m doing, to filing “zero returns” or blank forms, to symbolic withholding of some portion of what is demanded, to resisting a particular excise tax (for instance the federal phone bill tax).

I also found an older AlterNet article today on “The ‘New’ Economy” that is an interesting look at the underground, or “shadow” economy:

The National Center for Policy Analysis points out: “Economists estimate that as many as 25 million Americans earn a large part of their income from underground activities.”

While economists have long estimated that the U.S. underground economy equals about 10 percent of the gross domestic product (GDP), there are reasons to believe the number may be larger. According to a recent International Monetary Fund survey of 21 countries, the shadow economy has been growing for 30 years — the fastest in the 1990s — doubling from less than 10 percent of the GDP in 1970 to 20 percent or more by 2000.

“In the United States, for example, the shadow economy doubled from 4 percent of GDP in 1970 to 9 percent in 2000,” according to IMF.

But the Internal Revenue Service is taking a dim view. The IRS recently estimated that the federal government is losing $195 billion per year in revenue due to underground activity — both legal and illegal. In addition, it estimates the underground economy is anywhere from 3 to 40 percent of the above ground economy.