A year ago, on March 19^th, 2003, the invasion of Iraq began and I quit my job to start an experiment in tax resistance. ♦

A review of my goals

When I started on this experiment, my goal was to wash my hands of any financial support for the government. I wanted to do this by reducing my federal income tax burden to zero, legally, by lowering my income below the tax threshold and by taking legitimate deductions and credits.

A year later, how has this experiment gone?

I’ve managed, through careful frugality and budgeting, to lower my expenses to the point where I can live well at an income that puts me below the tax line. That was the single most important thing I needed to accomplish in order to make this experiment a sustainable lifestyle. ♦

I came to understand, however, that eliminating my federal income tax won’t necessarily stop my financial support of the government. To do that, I also have to stop paying the payroll tax (FICA) — and that’s a harder nut to crack. ♦ ♦ ♦

So I’ll need to decide whether I can live with paying FICA, or whether I should stop trying to do this experiment above-board and just dive into the underground economy where I can get paid under-the-table, or I’ll need to discover a way to get out of the payroll tax legally that I don’t know about yet. ♦

Until then, I’ve been exorcising some of this by doing some volunteer work for the VITA program — helping people with low incomes get some of their FICA payments back through the EITC. ♦ ♦

To my great embarrassment, I miscalculated when estimating my 2003 income, so that when I finally got my W-2 forms in the mail, it turned out I’d earned about $5,000 more than I thought I had. That was a big oops, and enough to move me out of the tax-free category. I’ll get a big refund from the IRS this year, but they’re still going to hold on to more than $900 of what I paid in — so even my goal of paying no federal income tax wasn’t met this year. Still, that’s a tiny fraction of what I paid last year, and I’m confident I’ll hit zero in the upcoming year. ♦

Other goals

I also hoped to encourage other people to consider tax resistance — people who don’t need convincing that the government is rotten, but who aren’t sure what they should do about it. For myself, it was Thoreau’s Civil Disobedience that gave me the final push, so, inspired by this, at various times I’ve tried to craft some rhetorical appeals of my own — there’s one that just came out in this month’s HopeDance, for instance. ♦ ♦ ♦ ♦ ♦

This site itself is meant in part to be a trail of breadcrumbs I’m leaving for people who think they might want to try my variety of tax resistance. I’ve been encouraged by a number of people who have contacted me via email to tell me they’ve started tax resistance or are taking some steps in that direction and that The Picket Line has helped inspire them.

I’ve learned from the many historical examples of tax resistance — both internationally (for instance Gandhi and the residents of Beit Sahour) and in the United States (for instance Thoreau, Wally & Juanita Nelson, A.J. Muste and the Quakers). ♦ ♦

And I’ve learned a lot about the variety of ways in which tax resistance is practiced — people resist taxes for many reasons and have a variety of goals in mind, and there are almost as many methods as there are tax resisters. ♦

One thing I discovered is that the method of tax resistance I’ve chosen is not particularly well-documented. The existing tax resistance guides that mention this method are short on details and tend to wildly exaggerate its difficulty. Since the job I quit at the start of this experiment was technical writing, I decided to put my experience to work — I’ve come up with a “Howto” Guide, which I continue to refine as the tax law changes and as I learn more. ♦

Another thing I found was that, on-line anyway, even more support for my project came from the libertarian community than from the mostly-leftish anti-war movement. In particular, Claire Wolfe and Wendy McElroy have brought many readers this way, and I’ve been encouraged in return to test my ethical theories in the forges of libertarian discussion boards. (That said, the Quaker pacifist site nonviolence.org has sent a steady stream of visitors my way, too.) I continue to hope that the libertarians and the peaceniks will one day meet across the capitalist divide and realize they’ve got a common enemy. ♦ ♦ ♦

Another thing worth mentioning is that while I’m living at a much lower income, and being much more of a penny pincher, my quality of life is actually much improved. Quitting my job gave me plenty of free time, which I’ve been spending travelling, working on projects and hobbies, learning new skills, trying to start a very modest home-based business, and lounging about reading good books. I also sleep better at night knowing that I’m not spending my days raising more money for the politicians to spend.

And I don’t know how much of this I can attribute to taking a stand, how much is due to being out from under the thumb of a day job, and how much is just neurochemical tides or overdue maturity — but I feel much more like I’m on the right track, in a large-scale, existential sense. I feel like I’m living in the right skin, at the right time, in a life that I’ve taken charge of — and that I’m awake enough now to be able to sniff the air and notice if some important part of my destiny comes floating by on the breeze. I like the way that feels.

But to the extent that one of my goals has been the overthrow of the current regime and the institution of a new world order of butterflies and rainbows and puppy dogs and freedom, well, we’ve got a ways ta go still on that one.

State of the world

A year ago, the world was in an uproar. The usual suspects were out in the streets making noise and stopping traffic, and the suits at the top of the org charts were ignoring them and throwing some very expensive and very deadly machinery at people in Iraq. ♦

Since then, the pro-war spin has unraveled more thoroughly than anyone expected. It’s amazing in retrospect how much more accurately the anti-war slogans in the street described the situation when compared to the voices of reason on TV and in the editorial pages. ♦ ♦ ♦

But I don’t think this matters very much. While it’s possible that the debacle may help to force the Dubya Squad from office, it’s also sadly very possible that it won’t. And in any case, as nice as such a thing would be, we’d wake up to our hangovers the next morning to find that not much had really changed: the public’s willful credulity and the malpractice of the press will still be there to exploit, and Kerry (who gave the Dubya Squad the green light back when he last had a chance to do something about it) and his new kids on the block will be there to exploit them. ♦ ♦

The massive civilian casualties inflicted by the U.S.-led coalition went mostly unnoticed in the United States — in fact you can still hear people talking about how much effort the U.S. puts into minimizing civilian casualties, as if such assertions of fact never need to be compared to reality, as if they were just statements of pride, like “America is the Greatest Country on Earth.” ♦ ♦ ♦ ♦ ♦

The state of Iraq is a post-war and post-tyranny mess, naturally. Slowly and awkwardly, the country is moving into some sort of make-believe quasi-sovereignty. But at least Saddam is gone, and whatever rottenness replaces him will have to work awfully hard if it wants to be worse, even if it ultimately is just a puppet government or some sort of confederacy of unelected bosses.

Civil liberties in the United States continue their decline, which is a sad thing to anyone with lingering pride in the story of America as a Beacon of Freedom and all that. And there’s some evidence that the government is using its new powers to stifle dissent. I don’t know why it should bother: The lackluster state of the opposition in this country is nothing for it to be afraid of at this stage.

Tax policy has changed in ways that are favorable to tax protesters who are using the method I’m using. For example, the new Health Savings Accounts are a great way for people to hide away more income from the tax-collector. Also, recent tax cuts have caused federal budgets to go into the red like never before. Although their methods aren’t the ones I’d choose, the Dubya Squad are successfully using their power to bankrupt the government more quickly and thoroughly than I can do even in my most megalomaniacal daydreams. ♦ ♦ ♦

There have been a few newsworthy events on the tax protest movement front — the latest push to get more people involved in resisting the phone tax has pretty much fizzled so far, but the tax resistance movement got a good publicity boost from the impressively large tax resistance by Julia “Butterfly” Hill. ♦ ♦ ♦ ♦

Prospects for the coming year

Looking ahead to this tax year, I’ve got a much better idea of what I’ll need to do to stay below the tax line, and I’ve got more control over my income. I should be able to avoid advancing the feds any income tax this year. This time next year, my returns won’t be begging for the IRS to give my money back but instead will be big, loud raspberries in the direction of Washington.

I hope to continue to do outreach to pacifists, peaceniks, anarchists, libertarians and anyone else who might listen. I plan to continue to work on my “Howto” guide in order to make it easier for new recruits. I may very well look more seriously into opportunities in the underground economy (though I’ll probably be quiet about this here on the blog).

And I will continue to critically examine my own ethical assumptions and search for practical ways to practice what Gandhi called the Dharma of Sedition.

Two years ago, on March 19^th, 2003, the invasion of Iraq began and I quit my job to start an experiment in tax resistance. ♦

A review of my goals

My goal was to wash my hands of any financial support for the U.S. government. I hoped to do this by reducing my federal income tax burden to zero, legally, by lowering my income below the tax threshold and by taking legitimate deductions and credits.

Tax Resistance

For 2003, due to an accounting snafu, I missed my goal of avoiding all federal income tax, but in the 2004 tax year I succeeded:

I still haven’t solved the problem of FICA (the Social Security & Medicare or “payroll” taxes). This year I sent almost $2,500 to the federal treasury in FICA contributions. ♦

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance and evasion techniques here as well: I am refusing to pay the federal excise tax on my phone bill, and I’m home-brewing beer to avoid the federal excise tax on alcoholic beverages. I long ago gave up owning a car, so at least directly I pay very little federal excise tax on gasoline. ♦

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a sustainable one. I’m happy to report that I’m living sustainably and well at my below-the-tax-line income. ♦

My regular expenses for things like rent, food, health insurance, transportation, utilities and such come to a little over $900 a month. Because I’m self-employed, the health insurance premium is a deductible expense and doesn’t count toward the $15,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance. (In very good news, I signed up for a new health insurance plan recently that costs less than half as much as my old plan and, I believe, qualifies for Health Savings Accounts — another useful tax-shelter).

My yearly living expenses, therefore, take about $9,425 out of that $15,000. The FICA taxes I paid cost another $2,500, half of which also counts against the $15K. That leaves me $4,300 for unexpected expenses, luxuries, charity or savings. Which is good, because my bicycle needs repair or replacement, and I’m itching for another vacation south-of-the-border some time soon.

My 1040: A walk-through

Here’s how I trimmed my 1040 this year. First, my Total Income:

My business income came from two sources: my contract work and modest profits from sales of The Annotated Hasheesh Eater. The capital loss is from sales of stock that I bought in the company I worked for back in the dot-com bubble days.

The “IRA distributions” is a neat trick I tried for the first time last year. Since I didn’t earn as much as I could have earned tax-free last year, I slid some money over from my traditional IRA into a Roth IRA. In order to do this, I have to pay taxes on that money this year at my current rate of taxation (that’s why it counts as part of my “Total Income” above). But because my tax rate is zero, that’s not a problem. And because I’m theoretically paying the tax on that money now, I won’t have to pay any taxes on it when I withdraw the money on retirement. ♦

Now on to my Adjusted Gross Income:

Here, I’m able to take advantage of the $3,000 I put into my traditional IRA last year, and I can deduct the complete cost of my health insurance premium as well as half of what I paid in FICA.

The FICA deduction is because I’m self-employed. When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your FICA payment as a deduction here to even things out.

Even with the traditional-to-Roth IRA swap, I still came out more than $1,500 under my $15,000 AGI ceiling. Even with all of my spreadsheets and planning, I find that it’s difficult to hit the numbers with any precision.

Now we go from Adjusted Gross Income to Taxable Income:

The tax on $5,256 is $526. But by using Form 8880, I got a credit for exactly that much, which reduced my federal income tax to zero, QED.

Other Goals

I also hope to encourage other people to consider tax resistance as a tactic. I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it, and I keep trying to make it more useful. Over the last year, in addition to regular content updates, I’ve redesigned the site’s look & feel, added a search feature, enabled comments, created a comprehensive topic outline, and included a new RSS feed.

The Picket Line has gotten many good reviews and mentions here and there in blog-land, and also got a thumbs-up in Claire Wolfe’s new book The Freedom Outlaw’s Handbook. ♦

I have also spread the word elsewhere. For instance, I’ve helped put on workshops held by Northern California War Tax Resistance, I’ve sent many an email to people I thought I might be able to nudge into resistance, and I’ve injected the tax resistance meme into discussions here and there, online and off. ♦

One of my goals from last year was to get a Health Savings Account, which is a good tax shelter, but which requires that you have a certain type of health insurance to qualify. I have just managed to sign up for such a health insurance plan, but haven’t managed to get a HSA yet, so I’ll have to carry over this goal to year #3. ♦

Some of my other goals might be better classified as “hopes” since I don’t really have a concrete plan of action. I would like to see the following:

• That the U.S. anti-war opposition, and those people who like to think of themselves as part of it, either give up on its fair-weather friends in the Democratic Party entirely or at the very least make its support conditional on reciprocal support for an anti-militarist and anti-war agenda. ♦ ♦ ♦
• That anti-war left and anti-war libertarian groups learn from each other and join forces against their common enemy. (And that the anti-war left adopt some sensible skepticism about government-based solutions to the problems it identifies.) ♦ ♦ ♦
• That the anti-war opposition buckle down, take itself more seriously, tolerate less feel-good bullshit, and take a more active stance, insisting on more direct action (war tax resistance would be a great start) and less pleading and protesting. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
• That the war tax resistance movement utterly renounce the wrong-headed and counterproductive strategy of advocating a “Peace Tax” legislative non-solution to our collective ethical dilemma. ♦ ♦

In support of the goals in that list I have mostly just grumbled and kvetched. I have no position of power or influence in any of the groups I’ve mentioned, and so I am just one opinion among many and my opinion is only as powerful as it is persuasive and available, to which end I have made some effort, with little to show for it.

I failed to sign up for the VITA program this year. My many calls, faxes and emails to the VITA coordinators in my new neighborhood went mostly unanswered, and I have been too lazy and budget-conscious to commute to more needy or well-organized programs outside of my home base. ♦

State of the world

The state of the nation and the world is no more encouraging now than it was this time last year. Most discouraging to me has been the revelations about the U.S. torture policy, and the lack of outrage that has resulted. When John Yoo, one of its legal architects, said that the American public had endorsed and ratified the policy by reelecting its authors, I think he was probably right. ♦

The U.S. opposition, such as it is, mostly took last year off in deference to John Kerry, who, though he is pro-war, thoroughly unconcerned about the torture policy, and wants to expand the military even more than Dubya does, uh, well, there’s a good side too, I think, but I forget what it was supposed to be. Kerry spent his campaign successfully rehabilitating the reputation of the Vietnam War and bragging about how many weapons programs he’d voted to fund, and still lost. ♦

So now the anti-war opposition is trying to scrape the splattered shame from itself and pick up where it left off. There are signs of an emerging campaign of sustained direct action concentrated against military recruitment, which is perhaps the war’s weakest pillar of support. ♦

The U.S. opposition can take heart (and notes) from the emergence of “People Power” movements from Eastern Europe to the Middle East. ♦ ♦

Is the beast beginning to starve? Certainly the national debt is gargantuan, but then again, so is the budget. The beast’s appetite and diet don’t seem much affected by its reduced income and increased debt. As long as Dubya can continue to tour the country promoting a Social Security reform plan that depends on massive borrowing, the beast seems in no danger of imminent collapse, alas.

The war tax resistance movement remains pretty much where it was last year at this time — a fringe concern, even within the committed anti-war movement. It has been unable to engage people on a large scale, even for such modest projects as the “Hang Up on War” phone tax resistance campaign.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law stays roughly the same this year, I’m well-positioned to have another year of living comfortably and well under the income tax line. I will owe FICA this year, and as yet have no plan to avoid it.

I may decide to become more active in the War Tax Resistance movement in the coming year. I have mixed feelings about this. Part of me wants to work harder to promote tax resistance outside of blog-land and to do more in coordination with other people instead of relying on solo projects. But another part of me suspects that I wouldn’t be a very good match for the war tax resistance groups, since my orientation is not particularly leftish (as theirs often is) and I am very much opposed to the Peace Tax Fund idea, which is popular in the war tax resistance movement.

I turned down an opportunity to apply to be part of the National War Tax Resistance Coordinating Committee’s Administrative Committee, but I may decide to take more organizational responsibilities in a local war tax resistance group. Or I may decide that the best thing I can do for tax resisters is to continue my work on The Picket Line.

I’ve stopped trying to give anything like comprehensive coverage to the U.S. torture policy here at The Picket Line, and plan to return this blog to a tighter focus on tax resistance.

The social security reform and tax reform churn this year may change the game for folks like me. In particular, if the unlikely becomes actual and the federal income tax is replaced with or supplemented by a consumption tax, then tax resisters will need a new set of strategies.

I plan to move soon from my current low-rent home to some other place nearby. I’m including in my search rooms with higher rents than I’m currently paying, which will change the expenses I’ve reported here (though not by enough to put me at risk of either being non-sustainable or above the tax line).

Three years ago, on March 19^th, 2003, the invasion of Iraq began and this camel’s back broke. I quit my job to start an experiment in tax resistance.♦

A review of my goals

My goal was to wash my hands of financial support for the U.S. government. I hoped to do this by reducing my federal income tax burden to zero legally: lowering my income below the tax threshold by taking legitimate deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in the 2004 and 2005 tax years I have succeeded:

I still haven’t solved the problem of FICA (a.k.a. the “self employment” or “payroll” tax). This year I sent $2,501 to the federal treasury in FICA payments and I owe an additional $770 which is due on April 17^th. I’m toying with the idea of not voluntarily paying any more, but instead making the IRS try to seize the money.♦

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance and evasion techniques here as well: I’m home-brewing beer to avoid the federal excise tax on alcoholic beverages and I long ago gave up owning a car, so I pay very little federal excise tax on gasoline.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a sustainable one. I’m happy to report that I’m living sustainably and well at my below-the-tax-line income, though this year I did dip into savings a little bit.

My regular expenses for things like rent, food, health insurance, transportation, utilities and such come to about $1,160 per month — more than last year. The increase comes mostly because I moved across the bay to a more expensive area. Electricity and gas bills rose this year, too. ♦ ♦

Because I’m self-employed, my health insurance premium is a deductible expense and doesn’t count toward the $15,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (additionally, I qualify for and use a Health Savings Account so my deductible is also tax-free).

Not included in the above graph are any work expenses that I can deduct, and my FICA payments (only half of which I can deduct). My yearly living expenses, therefore, take about $13,150 out of that $15,000. The imposed FICA taxes cost another $3,271, half of which also counts against the $15K. That leaves me about $215 for unexpected expenses, luxuries, charity or savings. This is not really enough wiggle room, especially since I spent money from my savings on two expensive off-budget items this year: a trip to Mexico and a replacement laptop computer.

My 1040: A walk-through

Here’s how I trimmed my 1040 this year. First, my Total Income:

My business income came from two sources: my contract work and modest profits from sales of The Annotated Hasheesh Eater. The capital loss is from sales of stock in the company I worked for back in the dot-com bubble days.

Now on to my Adjusted Gross Income:

Here, I’m able to take advantage of the $4,000 I put into my traditional IRA last year and the $1,950 I put into my Health Savings Account, and I can deduct the complete cost of my health insurance premium as well as half of the imposed FICA tax.

The FICA deduction is because I’m self-employed. When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your FICA tax as a deduction here to even things out.

I came out almost $1,000 under my $15,000 AGI ceiling. Even with all of my spreadsheets and planning, I find that it’s difficult to hit the numbers with any precision, and so, like last year, I erred on the side of caution.

Now we go from Adjusted Gross Income to Taxable Income:

The tax on $5,864 is $586. But by using Form 8880, I got a credit for exactly that much, which reduced my federal income tax to zero, QED.

Other Goals

I hope to encourage other people to consider tax resistance as a tactic and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful. For instance, this year I translated some pages into Spanish. ♦ ♦ ♦

The Picket Line has gotten many good reviews and mentions here and there in blog-land.

I have also spread the word elsewhere. For instance, I’ve helped put on workshops held by Northern California War Tax Resistance, I’ve sent many an email to people I thought I might be able to nudge into resistance, and I’ve injected the tax resistance meme into discussions here and there, online and off. ♦ ♦ ♦

I signed up for the VITA program again this year, and have helped several low-income families take back thousands of dollars from the U.S. Treasury. ♦

One of my goals from last year was to get a Health Savings Account, which is a good tax shelter, but which requires that you have a certain type of health insurance to qualify. Mission accomplished.

Some of my other goals might be better classified as “hopes” since I don’t really have a concrete plan of action. I would like to see the following:

• That the U.S. anti-war opposition, and those people who like to think of themselves as part of it, either give up on its fair-weather friends in the Democratic Party entirely or at the very least make its support conditional on reciprocal support for an anti-militarist and anti-war agenda. And that libertarian-minded Americans give up the idea that Republican politicians have any interest in a smaller government. ♦ ♦ ♦ ♦ ♦ ♦
• That the war tax resistance culture learns that the technique of resisting income tax by lowering your income doesn’t have to mean a life of crushing poverty. ♦
• That anti-war left and anti-war libertarian groups learn from each other and join forces against their common enemy. (And that the anti-war left adopt some sensible skepticism about government-based solutions to the problems it identifies.) ♦ ♦ ♦ ♦ ♦
• That the anti-war opposition buckle down, take itself more seriously, tolerate less feel-good bullshit, and take a more active stance, insisting on more direct action (war tax resistance would be a great start) and less pleading and protesting. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
• That the war tax resistance movement utterly renounce the wrong-headed and counterproductive strategy of advocating a “Peace Tax” legislative non-solution to our collective ethical challenge. ♦ ♦ ♦
• That libertarians stop coddling the constitutionalist tax protesters who think their magic spells will cause the IRS to vanish in a puff of smoke. ♦ ♦ ♦

In support of the goals in that list I have mostly just grumbled and kvetched. I have no position of power or influence in any of the groups I’ve mentioned, and so I am just one opinion among many and my opinion is only as powerful as it is persuasive and available, to which end I have made some effort.

The state of the world and the tax resistance movements

The war drags on, and the U.S. torture policy too, undeterred by law and decency, and only ineffectively and rhetorically opposed for the most part. The alleged opposition to the Dubya Squad still hasn’t recovered from tying John Kerry around its neck, and dithers around hoping the news media will uncover a scandal big enough to do their work for them. ♦

Hurricane Katrina exposed the government to be callous and worthless for even the bare minimum of protection and assistance that citizens of a government ought to be able to expect. You’d think that such a thing would be an effective reductio ad absurdum on the whole idea of government, but no: most people simply used the disaster as an excuse to call for more concentrated government authority. ♦ ♦

The war tax resistance movement remains pretty much where it was last year at this time — a fringe concern, even within the anti-war movement. It failed to capitalize on the publicity from Cindy Sheehan’s declaration that she would resist her taxes. And it continues to be unable to engage people on a large scale, even for such modest projects as the “Hang Up on War” phone tax resistance campaign. ♦

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law stays roughly the same this year, I’m well-positioned to have another year of living comfortably and well under the income tax line.

I will owe FICA again this year, but I’m toying with the idea of resisting it illegally by simply withholding it and forcing the government to attempt to seize it from my bank account. I don’t have a good feel yet for how worthwhile this would be, but I’m investigating.

I may decide to become more active in the War Tax Resistance movement in the coming year. I have mixed feelings about this. Part of me wants to work harder to promote tax resistance outside of blog-land and to do more in coordination with other people instead of relying on solo projects. But another part of me suspects that I wouldn’t be a very good match for the war tax resistance groups, since my orientation is not particularly leftish (as theirs often is) and I am very much opposed to the Peace Tax Fund idea, which is popular in the war tax resistance movement. I may decide that the best thing I can do for tax resisters is to continue my work on The Picket Line.

There was a lot of noise about social security reform and tax reform last year, but nothing came of it. Still, there may be some incremental changes that will affect tax resisters like me. Fortunately, most of the changes being proposed, particularly Dubya’s proposal to expand Health Savings Accounts, will be beneficial to us. ♦

The new home solar and energy efficiency tax deductions and credits are a new tool for the tax avoider — having the double benefit of being an immediate tax advantage and of helping reduce your utility bills and therefore helping you live on a lower income. Unfortunately, there doesn’t seem to be a way for renters like myself to take advantage of these credits — it seems you have to own a home. ♦ ♦ ♦

Four years ago, on March 19^th, 2003, the invasion of Iraq began and I quit my job to start an experiment in tax resistance.♦

A review of my goals

My primary goal was to wash my hands of financial support for the U.S. government. I hoped to do this by reducing my federal income tax burden to zero legally — lowering my income below the tax threshold by taking legitimate deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in the 2004, 2005, and 2006 tax years I succeeded. (I lump FICA and SECA together under the “FICA” label in this chart):

Last year I stopped paying self-employment tax as well (the white-striped areas in the chart are taxes and penalties I have been assessed but that haven’t yet been collected). Currently, I “owe” about $5,000 (including interest and penalties). I don’t intend to pay this, or any future federal tax, voluntarily. I also don’t have an effective plan to hide my assets, so I expect that the IRS will probably seize the money from me eventually, though so far they’ve only sent me a short series of ominous-sounding boilerplate letters. ♦ ♦ ♦ ♦ ♦

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: I’m home-brewing beer to avoid the federal excise tax on alcoholic beverages and I long ago gave up owning a car, so I pay very little federal excise tax on gasoline. ♦

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a sustainable one. I’m happy to report that I’m living sustainably and well at my below-the-tax-line income. ♦

My regular expenses for things like rent, food, health insurance, transportation, utilities and such come to about $1,140 per month — a little less than last year. My utility bill is way down over last year, since I’ve moved into my new home, though this is somewhat deceptive — I included the cable bill as part of “utilities” last year and now I don’t have cable but do have Netflix, which I categorize as “entertainment”; also, I do laundry at a laundromat now, which I categorize as “personal care” whereas before we had a washer & dryer at home and that expense too got included in the “utilities” section. My food bill is down also this year, but I appear to be spending most of the savings… c’est le vin as they say.

I’m not sure how I feel about that expanding slice of the pie that goes toward Beverages of Vice. It’s a little embarrassing, given the no-nonsense frugality elsewhere in the budget. On the other hand, it’s nice to know that I have that much room to squeeze my budget further if need be. I could save more than $1,500 per year simply by saying, “I think I’ll just have water, thanks.”

Because I’m self-employed, my health insurance premium is a deductible expense and doesn’t count toward the $15,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (additionally, I qualify for and use a Health Savings Account so my deductible is also tax-free).

Not included in the above graph are any work expenses that I can deduct, and my self-employment tax assessment (half of which I can deduct). My yearly living expenses, therefore, take about $12,780 out of that $15,000. If I budget in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect to lose, this comes to another $4,000, half of which also counts against the $15K. That leaves me pretty much no wiggle room, but I’ve got a little savings I can work with if something unexpected comes up or if I want to splurge (say, on another south-of-the-border vacation).

My 1040: A walk-through

Here’s how I trimmed my 1040 this year. First, my Total Income:

My business income came mostly from two sources: my contract work and modest profits from sales of The Annotated Hasheesh Eater. The capital loss is mostly attributable to sales of stock in the company I worked for back in the dot-com bubble days.

Now on to my Adjusted Gross Income:

Here, I’m able to take advantage of the $4,000 I put into my traditional IRA, the $5,000 I put into my SEP plan, and the $2,650 I put into my Health Savings Account, and I can deduct the complete cost of my health insurance premium as well as half of the imposed SECA tax.

That SECA deduction is because I’m self-employed. When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your SECA tax as a deduction here to even things out.

I came out about $1,500 under my $15,000 AGI ceiling. Even with all of my spreadsheets and planning, I find that it’s difficult to hit the numbers with any precision, and so, as in past years, I erred on the side of caution.

Now we go from Adjusted Gross Income to Taxable Income:

The tax on $5,006 is $501. But by using Form 8880, I got a credit for exactly that much, which reduced my federal income tax to zero, QED.

Other Goals

I hope to encourage other people to consider tax resistance as a tactic and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

The Picket Line has gotten many good reviews and mentions here and there in blog-land.

I have also spread the word elsewhere. For instance, I’ve helped put on workshops held by Northern California War Tax Resistance, I’ve sent many an email to people I thought I might be able to nudge into resistance, I’ve injected the tax resistance meme into discussions online and off, and I’ve started agitating more vocally for tax resistance at peacenik demonstrations. ♦ ♦

One of my projects last year was to write up a new edition of the NWTRCC Practical War Tax Resistance series pamphlet on low-income / simple-living. With the help of some volunteers who helped me with writing and editing the initial draft, I was able to get a review copy ready for the NWTRCC National Conference in Las Vegas last year. Susan Quinlan of NWTRCC finished the final layout earlier this year and it’s now available for download or purchase at NWTRCC’s website. ♦ ♦ ♦

Another of my projects has been to create an on-line collection of Henry David Thoreau’s writing on political philosophy. I had been disappointed with the lack of availability of many of these works, and with the lack of quality in many of those that were available. Over the last year I’ve made great strides toward making available on-line what I hope are good quality versions of many of these works, some of which were not available in any form on-line, and one of which (the collection of journal excerpts) was never available before at all. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

I signed up for the VITA program again this year, and am helping several low-income families take back thousands of dollars from the U.S. Treasury. ♦ ♦

Some of my other goals might be better classified as “hopes” since I don’t really have a concrete plan of action. I would like to see the following:

• That the U.S. anti-war opposition, and those people who like to think of themselves as part of it, either give up on the Democratic Party entirely or at the very least make their support conditional on reciprocal support for an anti-militarist and anti-war agenda. And, similarly, that libertarian-minded Americans give up the idea that Republican politicians have any interest in a smaller government. Politicians are the problem, not the solution. ♦ ♦
• That the war tax resistance culture learns that the technique of resisting income tax by lowering your income doesn’t mean a life of poverty and deprivation.
• That anti-war left and anti-war libertarian groups learn from each other and join forces against their common enemy. (And that the anti-war left adopt some sensible skepticism about government-based solutions to the problems it identifies.) ♦
• That the anti-war opposition buckle down, take itself more seriously, tolerate less feel-good bullshit, and take a more active stance, insisting on more direct action (war tax resistance would be a great start) and less pleading and protesting. ♦ ♦ ♦ ♦ ♦
• That the war tax resistance movement renounce the counterproductive strategy of advocating a “Peace Tax” legislative non-solution to our collective ethical challenge. ♦ ♦

In support of the goals in that list I have mostly just grumbled and kvetched. I have no position of power or influence in any of the groups I’ve mentioned, and so I am just one opinion among many and my opinion is only as powerful as it is persuasive and available, to which end I have made some effort.

The state of the world and the tax resistance movements

The war drags on, and the U.S. torture policy too, undeterred by law or decency or a Democratic Congress, and only ineffectively and rhetorically opposed for the most part.

The war tax resistance movement remains pretty much where it was last year at this time — a fringe concern, even within the anti-war movement. It continues to be unable to engage people on a large scale.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law stays roughly the same this year, I’m well-positioned to have another year of living comfortably and well under the income tax line, though I will “owe” SECA again this year. I’ve budgeted for the possibility that the IRS will decide to seize money from me this year for unpaid back taxes, so in case this happens, it won’t slow me down.

Five years ago, on March 19^th, 2003, the invasion of Iraq began and I quit my job to start an experiment in tax resistance.♦

A review of my goals

My primary goal at the time was to stop financially supporting the U.S. government. I hoped to do this by legally reducing my federal income tax burden to zero — lowering my income below the tax threshold by taking legitimate deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in the following tax years I succeeded. However, I have had a self-employment tax assessment each year. In 2006 I decided to stop voluntarily paying this self-employment tax, and so I have been charged penalties & interest in addition to the assessed tax. This year, for the first time, the IRS started levying my bank accounts to seize these back taxes.♦

This two-track strategy of legally avoiding the federal income tax while illegally refusing to pay FICA is an awkward and perhaps untenable compromise, but for me it currently seems to be the best alternative.♦♦

So far, the IRS has successfully seized about $4,300 of the total of about $9,600 that I have refused to pay (roughly $8,400 of that is assessed self-employment tax and the remaining $1,200 is interest & penalties). I don’t have an effective plan to hide my assets, so I expect that the IRS will continue to seize money from time to time. I may decide to apply to the War Tax Resisters Penalty Fund to get some relief from the penalties and to help distribute the credit for my tax resistance among more people.♦

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I home-brew beer to avoid the federal excise tax on alcoholic beverages and I long ago gave up owning a car, so I pay very little federal excise tax on gasoline.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a sustainable one. I’m happy to report that I’m living sustainably and well at my below-the-tax-line income.♦

My regular expenses for things like rent, food, health insurance, transportation, utilities and such come to about $1,090 per month — somewhat less than last year in spite of the widely-reported rise in inflation and in the cost of food and other goods. My utility bills, transportation costs, and food budget are all down from my averages over the past few years. Thanks to Freecycle, our household can frequently find what we need without any expense at all.♦ However, we’ve recently signed up for a Community Supported Agriculture program, which will probably end up increasing our food expenses a bit this coming year.♦

Because I’m self-employed, my health insurance premium is a deductible expense that doesn’t count toward the $15,600 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (additionally, I qualify for and use a Health Savings Account so my health insurance deductible is also tax-free).

Not included in the above pie chart are any work expenses that I can deduct, and my self-employment tax assessment (half of which I can deduct). My yearly living expenses, therefore, take about $11,800 out of that $15,600. If I budget in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect to lose, this comes to another $3,900, half of which also counts against the $15,600. That leaves me $1,850 in wiggle room, and I’ve got some savings I can work with if something unexpected comes up or if I want to splurge (say, on another south-of-the-border vacation).

My 1040: A walk-through

Here’s how I trimmed my 1040 this year (I haven’t completed my tax forms yet, so these numbers are provisional). First, my Total Income:

My business income came mostly from two sources: my contract work and sales of my books. The capital gains are attributable to sales of stock and capital gains distributions from a mutual fund.

Now on to my Adjusted Gross Income:

Here, I’m able to take advantage of the $4,000 I put into my traditional IRA, the $4,500 I put into my SEP plan, and the $2,850 I put into my Health Savings Account, and I can deduct the complete cost of my health insurance premium as well as half of the imposed SECA tax.

That SECA deduction is because I’m self-employed. When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it (isn’t that rich — they charge you income tax on money you never saw because it was taken as your contributions to social security — and then they may charge you income tax again on your social security benefits if you’re lucky enough to live so long!). If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your SECA tax as a deduction here to even things out.

I came out about $750 under my $15,600 AGI ceiling, which is plenty close enough for me. I have to leave a generous margin of error in case there are any year-end surprises (this year, those mutual fund capital gains distributions caught me by surprise, and I had to make additional SEP contributions to compensate — it’s a good thing I’d left myself some extra room).

Now we go from Adjusted Gross Income to Taxable Income:

This year because of qualified dividends and capital gains, I had to use a different method for figuring out the tax due on this amount — I couldn’t just reference the tables in the back of the booklet at this point. This worked to my favor: My tax came to $493, less than it would have by the other method. But it didn’t really matter: By using Form 8880, I get a credit that’s big enough to cover either amount, and which reduces my federal income tax to zero, QED.

Other Goals

I hope to encourage other people to consider tax resistance as a tactic and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

I’ve done some media appearances, in such places as the San Francisco Chronicle, Raising Sand Radio, the Associated Press newswire, Money magazine, John Scott’s show on AM 960 “The Quake”, radio shows for WOR in New York and KIRO in Seattle and KPFA in San Francisco, and the Alan Colmes Show.♦♦♦♦♦♦♦ Some of my writing on this topic has appeared in Peacework Magazine, The Nation, and More Than a Paycheck.♦♦♦

I have also spread the word elsewhere. For instance, I’ve helped put on workshops held by Northern California War Tax Resistance, I’ve sent many an email to people I thought I might be able to nudge into resistance, I’ve injected the tax resistance meme into discussions online and off, and I agitate for tax resistance at peacenik gatherings.♦♦♦

Another of my projects has been to create collections of Henry David Thoreau’s writing on political philosophy. I released two books, The Price of Freedom: Political philosophy from Thoreau’s journals and My Thoughts are Murder to the State: Thoreau’s Essays on Political Philosophy.♦

I’ve also just completed a first draft of my tax resistance reader project — a 600-page behemoth that covers tax resisters and tax resistance campaigns from the Roman Empire to the present day. I’ve put in many long hours on this project and have come up with something that I hope will interest and inspire tax resisters, activists, and others for years to come.

I signed up for the VITA program again this year, and am helping several low-income families take back thousands of dollars from the U.S. Treasury. ♦ ♦ ♦ ♦

The state of the world and the tax resistance movements

The war drags on, and the U.S. torture policy too, undeterred by law or decency, and only ineffectively and rhetorically opposed for the most part.

NWTRCC conducted a survey of anti-war activists that indicated potential support for a large-scale war tax resistance campaign.♦ On the basis of this, the group launched the 2008 War Tax Boycott campaign.♦ Although it has been a good vehicle to use to get across the war tax resistance message, as a campaign it has been disappointing. Without funding, support from large anti-war groups, or publicity, it has been unable even to rally a significant number of those activists who are already tax resisters.♦

However, it’s fair to say that the war tax resistance movement had more than its usual share of influence and growth in the anti-war movement last year. Code Pink & Christian Peace Witness for Iraq each launched their own war tax resistance campaigns, independently of the 2008 War Tax Boycott.♦♦

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law stays roughly the same this year, I’m well-positioned to have another year of living comfortably and well under the income tax line, though I will “owe” SECA again this year. I’ve budgeted for the likelihood that the IRS will continue to seize money from me this year for unpaid back taxes, so in case this happens, it won’t slow me down.

I’ve applied to join the Administrative Committee of NWTRCC. If I’m accepted, this will mean that I’ll become less of a Thoreauvian lone wolf and more of a movement-oriented tax resister. It’ll also mean I’ll be more intimately involved in the national war tax resistance movement and with the various regional war tax resistance groups, and I’ll probably have some interesting stories about that to share here.

Six years ago, on 19 March 2003, the invasion of Iraq began. For me, this was the last straw and so I quit my job to begin an experiment in tax resistance.♦

A review of my goals

My primary goal was to stop financially supporting the U.S. government. I hoped to do this by legally reducing my federal income tax burden to zero: lowering my income below the tax line by taking legitimate deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in all of the following tax years I succeeded. However, I have had a self-employment tax assessment each year (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well, and so I have been charged penalties & interest in addition to the assessed tax. The IRS has periodically attempted to levy bank accounts to seize these back taxes, with mixed success.♦♦♦

This two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems to be the best alternative.

Last year my earned income was so low that I hardly owed any taxes at all — income tax or self-employment tax.

So far, the IRS has successfully seized about $5,700 of the total of about $10,000 that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS will continue to seize money when they can find it. I have applied to the War Tax Resisters Penalty Fund to get some relief from the penalties & interest and to help distribute the credit for my tax resistance among more people, though this is a long process and I haven’t seen any reimbursement yet.

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer, hard cider, and sake so as to avoid the federal excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a sustainable one.♦ This year, for the first time so far during my experiment, I didn’t earn a sustainable income and I had to pull from savings to meet my expenses.

My regular expenses for things like rent, utilities, food, health insurance, transportation, and such come to about $1,200 per month. Because I’m self-employed, my health insurance premium is a deductible expense that doesn’t count toward the $16,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (in addition, I qualify for and use a Health Savings Account so my health insurance deductible is also tax-free).

Not included in the above pie chart are any work expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses, therefore, take about $12,350 out of that $16,000. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $4,000 or so, half of which also counts against the $16,000. That leaves me $1,650 in wiggle room, and I’ve still got a little savings I can work with if I continue having trouble finding freelance work in this economy.

My 1040: A walk-through

Here’s how I trimmed my 1040 this year. First, my Total Income:

My business income came from two sources: my contract work and sales of my books. It’s so low partially because business was bad this year and partially because I’m still depreciating some of last year’s big expenses.

The capital gains are attributable to sales of mutual funds and stocks and to capital gains distributions from a mutual fund. I got very lucky and sold a bunch of stuff at the yearly peak in early May and then again in mid-September just before the bottom fell out. I don’t think I’ll have to worry about capital gains again for quite some time.

The “IRA distributions” line-item is a neat trick I last used in 2004.♦ Since I didn’t earn as much as I could have earned tax-free last year, I slid $10,600 over from my traditional IRA into a Roth IRA. In order to do this, I have to pay taxes on that money this year at my current rate of taxation (that’s why it counts as part of my “Total Income” above). But because my tax rate is zero, that’s not a problem. And because I’m theoretically paying the tax on that money now, I won’t have to pay any taxes on it when I withdraw the money on retirement.

Now on to my Adjusted Gross Income:

This year, because I earned so little, I didn’t put any money into retirement accounts or into my Health Savings Account, so I have fewer deductions here than usual and I’m not using the retirement savings tax credit as I have been using in past years.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it (isn’t that rich — they charge you income tax on money you never saw because it was taken as your contributions to social security — and then they may charge you income tax again on your social security benefits if you’re lucky enough to live so long!). If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your self-employment tax as a deduction here to even things out (yes, even if you’re refusing to pay it like I am).

I wasn’t as concerned about the $16,000 ceiling this year, because that has to do with the retirement savings tax credit, which I’m not using. But as it turns out, my earned income was so low this year that even if I did owe some small amount of income tax, my total tax (income tax + self employment tax) was bound to be negligible.

The IRS flubbed its handling of my tax return last year — making a weird “correction” to my return and then uncorrecting it after I pointed out their error.♦♦ The upshot of this was that my return was still in limbo while the agency was passing out last year’s “Recovery Rebate” stimulus checks and so I wasn’t issued one. That was fine with me, since they would have just seized mine and applied it to my unpaid tax bill. Because they didn’t give me the rebate last year, I get to use it now to offset any income tax on my return, so this actually works out very well for me. As it turns out, I could have been even more liberal with my income or my Roth conversion and still been below the line.

Now we go from Adjusted Gross Income to Taxable Income:

This year because of qualified dividends and capital gains, I had to use a different method for figuring out the tax due on this amount — I couldn’t just reference the tables in the back of the booklet at this point. This worked out in my favor: My tax came to $199, less than it would have by the other method. But it didn’t matter much either way: the recovery rebate payment reduced my federal income tax to zero and left me with just a small amount of self-employment tax (and possibly some penalty for refusing to pay it).

Other Goals

I hope to encourage other people to consider tax resistance as a tactic and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

Last year I put a great deal of effort into creating two documentary histories of tax resistance: We Won’t Pay! — a 600-page behemoth that covers tax resisters and tax resistance campaigns from the Roman Empire to the present day — and American Quaker War Tax Resistance — a one-of-a-kind compilation that covers the evolution of war tax resistance in the Society of Friends in America. I’ve put in many long hours on these projects and have assembled books that I hope will interest and inspire tax resisters, activists, and others for years to come. In addition, most of the public domain material in these books I have also shared on this blog, and have thereby made them available free-of-charge to on-line researchers.

Money Magazine featured the story of my resistance last year in an article on “How To Pay Zero Taxes.”♦ I’ve also done some writing for More Than a Paycheck and Frugal for Life,♦ and have assembled some research papers and fact sheets on such subjects as: 22 ways people can support tax resisters,♦ perspectives on taxpayer complicity,♦ ethical illusions,♦ and the inadvisability of the “peace tax fund” campaign.♦♦♦♦♦

I have also spread the word elsewhere. I’ve sent many an email to people I thought I might be able to nudge into resistance, I’ve injected the tax resistance meme into discussions online and off, and I agitate for tax resistance at peacenik gatherings and events like the recent Bay Area Anarchist Bookfair. I spoke at a local group calling itself The Abundance League about how by putting all of my energy on the side of my values instead of letting the government siphon away my energy for its priorities, I was living a more abundant life.♦ That talk was later reprinted in Simple Living News.

I also put in some work to teach folks how to brew their own tasty alcoholic beverages, thereby cutting into the federal excise tax a bit and spreading the gospel of self-reliance and do-it-yourself.♦

In addition, I did a little volunteer work with Courage to Resist, which is helping soldiers who have decided to refuse to deploy in America’s wars.♦

The state of the world and the tax resistance movements

The wars drag on, and the new administration seems likely to guarantee impunity for the last administration’s torturers, thereby endorsing America’s torture policy. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds.

This time last year, there were three different ongoing war tax resistance campaigns and an anti-war movement with some momentum behind it. Now the war tax resistance movement (and the anti-war movement in general) is in the doldrums, deflated by the election of Obama who, though he has surrounded himself with hawks in his cabinet, has vowed to increase the size and expense of the military and to quickly ramp up the Afghanistan war, and has wasted no time in approving more of those air strikes that tend to leave such tiny bodies flung about, is the darling of the progressives who make up much of the ostensible peace movement.

While much of the peace movement has become complacent about supporting the government now that the Democrats are in charge, tax resistance has started bubbling up from other quarters. Tax resistance by gay marriage rights activists became a big story last year, and I’m hearing a lot more talk about tax resistance by people in the pro-life movement and by people who just feel like the government isn’t spending their hard-earned money wisely at a time when families are being forced to cut back.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to have another year of living comfortably and well under the income tax line, though I will “owe” SECA again this year (assuming I find some employment!). I’ve budgeted for the likelihood that the IRS will continue to seize money from me this year for unpaid back taxes, so in case this happens, it won’t slow me down.

I joined the Administrative Committee of NWTRCC. Last year I attended the Spring national gathering in Birmingham, Alabama (and led a workshop on persuasive face-to-face communication strategies there♦), and the Fall national gathering in Eugene, Oregon.♦ I’ll also be attending the national gathering in Virginia later this Spring. I’m also starting to take on more of a role in our local tax resistance group — Northern California War Tax Resistance.

So on to lucky year #7 of what is looking less and less like an experiment and more and more like a lifestyle.

Seven years ago, on 19 March 2003, the U.S. invasion of Iraq began. For me, this was the last straw and so I quit my job to begin an experiment in tax resistance.♦

A review of my goals

My primary goal was to stop financially supporting the U.S. government. I hoped to do this legally by reducing my federal income tax burden to zero — lowering my income below the tax line by taking legitimate deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in each of the following tax years I succeeded. However, I have had a self-employment tax assessment during most of these years (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well, and so I have been charged penalties & interest in addition to the assessed tax. The IRS has periodically attempted to levy bank accounts to seize these back taxes, with mixed success.♦♦

This two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems to be the best alternative.

Last year I owed about $1,350 in federal taxes, all from the self-employment tax.

The IRS has seized about $6,200 of the total of about $12,000 that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS will continue to seize money when they can find it. I have applied to the War Tax Resisters Penalty Fund to get some relief from the penalties & interest and to help distribute the credit for my tax resistance among more people. Last year they sent me a reimbursement check.♦

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car, so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer, hard cider, and sake so as to avoid the federal excise tax on alcoholic beverages. (I’ve recently adopted the habit of drinking no taxed alcoholic beverages unless I’m at someone else’s home or on those rare occasions when I’m at a bar or restaurant.)

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a good and sustainable one.♦♦ 2009, like 2008, was lean income-wise, but I managed to keep my spending in line with my income.

My regular expenses for things like rent, utilities, food, transportation, and such come to about $1,250 per month. Because I’m self-employed, my health insurance premium is a deductible expense that doesn’t count toward the $16,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (in addition, I use a Health Savings Account so my health insurance deductible is also tax-free).

Not included in the above pie chart are any work expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses, therefore, take about $15,000 out of that $16,000. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $4,000 or so, at least in a year in which I earn more and don’t have good refundable tax credits, half of which also counts against the $16,000 and would leave me above-the-line.

So things are tight, and I’ve adopted some more measures to reduce my costs in reaction to this accounting, including trimming my drinks-of-vice budget, having my hair cut by my sweetie instead of by the local barber, scaling back our Netflix subscription, and other such nickle-and-dime things that add up over the course of the year.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work and sales of my books. The capital losses are attributable to sales of mutual funds and stocks.

The “IRA distributions” line-item is a neat trick I first used in 2004.♦ Since I didn’t earn as much as I could have earned tax-free last year, I slid $6,500 over from my traditional IRA into a Roth IRA. In order to do this, I have to pay taxes on that money this year at my current rate of taxation (that’s why it counts as part of my “Total Income” above). But because my tax rate is negligible, that’s not a problem. And because I’m theoretically paying the tax on that money now, I shouldn’t have to pay any taxes on it when I withdraw the money on retirement.

Now on to my Adjusted Gross Income:

This year, because I earned so little, I didn’t put any money into retirement accounts or into my Health Savings Account, so I have fewer deductions here than usual and I’m not using the retirement savings tax credit as I have been in past years.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it (isn’t that rich — they charge you income tax on money you never saw because it was taken as your contributions to social security — and then they may charge you income tax again on your social security benefits if you’re lucky enough to live so long!). If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your self-employment tax as a deduction here to even things out (yes, even if you’re refusing to pay it like I am).

I wasn’t as concerned about the $16,000 ceiling this year, because that has to do with the retirement savings tax credit, which I’m not using. But as it turns out, my earned income was so low this year that even if I did owe some small amount of income tax, my total tax (income tax + self employment tax) was bound to be small. (I’m treating the Making Work Pay credit as though it were deducted from the income tax, though it really applies to either or both of the income and self-employment taxes.)

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Hopefully I got it right the first time this time around. Last year, the IRS made three corrections to my tax return, two of which were screw-ups on my part (the other one I still don’t understand). These corrections were in my favor (I didn’t end up owing more), but were embarrassing nonetheless.♦

Other Goals

I hope to encourage other people to consider tax resistance as a tactic and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

Last year I published Against War and War Taxes, a slim volume of classic American Quaker writings promoting war tax resistance. It was meant as a less-expensive and more focused companion to the larger and more expansive American Quaker War Tax Resistance.♦ My Don’t Owe Nothin’ how-to guide was published also, though not under my direction.♦♦

I was interviewed on Brian Bahouth’s evening news show on KVMR last April.♦ I’ve also done some writing for More Than a Paycheck♦♦, Simple Living News♦, and New Escapologist.

I have also spread the word elsewhere. I’ve sent many an email to people I thought I might be able to nudge into resistance, I’ve injected the tax resistance meme into discussions online and off, and I agitate for tax resistance at peacenik gatherings and even Tea Party events. I’ve also done a bit of one-on-one counseling to help new resisters hit the ground running.♦♦

I put in some work to teach folks how to brew their own tasty alcoholic beverages, thereby cutting into the federal excise tax a bit and spreading the gospel of self-reliance and do-it-yourself.♦♦

I volunteered for the VITA program again, helping people get their tax refunds.♦

At the Spring 2009 NWTRCC National Gathering in Virginia I helped convince the group not to endorse the fatally flawed Religious Freedom Peace Tax Fund Act.♦ I’ve also put in a lot of time trying to bring the nwtrcc.org site into the 21^st century (this project is still in progress but we’re hoping for a roll-out later this month).

The state of the world and the tax resistance movements

The wars drag on, and the new administration is maintaining America’s repulsive policies on war, Big Brotherish snooping, impunity for torturers, and so forth. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds.

The war tax resistance movement (and the anti-war movement in general) is in the doldrums, deflated by the election of Obama who, though he has surrounded himself with hawks in his cabinet, increased the size and expense of the military, quickly ramped up the Afghanistan war, endorsed the Patriot Act, and given a free pass to the nation’s torturers, seems to still be the darling of many of the progressives who make up the bulk of the ostensible peace movement. That said, the less-intoxicated anti-war progressives are starting to reach out to their paleocon and libertarian counterparts in the hopes of birthing a real alternative to the militarist consensus — a new development I’m keeping a close eye on.

While much of the peace movement has become complacent about supporting the government now that the Democrats are in charge, tax resistance has started bubbling up from other quarters. I’m hearing a lot more talk about tax resistance by people in the pro-life movement and by people who just feel like the government isn’t spending their hard-earned money wisely at a time when families are being forced to cut back. The “TEA Party” could at some point surprise us by returning to its grassroots and becoming a tax resistance movement rather than a Republican campaign commercial.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to have another year of living comfortably and well under the income tax line, though I will “owe” SECA again this year. I’ve budgeted for the possibility that the IRS will continue to seize money from me this year for unpaid back taxes, so in case this happens, it won’t slow me down.

I continue to research historical examples of tax resisters and tax resistance campaigns, and, some time when I’m not so busy with paying gigs and hunting for more of the same, I may try to distill what I’ve learned into a book of advice for tax resistance organizers, in the hopes that the campaigns of tomorrow can learn from the successes, failures, and challenges of those that came before.

On to year #8 of what is looking less and less like an experiment and more and more like a lifestyle.

Eight years ago, on 19 March 2003, the U.S. invasion of Iraq began. For me, this was the last straw and so I started what I then called “an experiment” in tax resistance.♦

A review of my goals

My primary goal was to stop financially supporting the U.S. government. I hoped to do this legally by reducing my federal income tax burden to zero — lowering my income below the tax line by taking legal deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in each of the following tax years I have succeeded. However, I have had a federal self-employment tax assessment most of these years (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well, and so I have since been charged penalties & interest in addition to the assessed tax. The IRS has periodically attempted to levy bank accounts to seize these back taxes, with mixed success. They didn’t manage to take anything from me over the last year, though they sent me a few pleading letters.♦

My two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems the best alternative.

Last year I owed, and refused to pay, about $3,850 in federal taxes, all from the self-employment tax.

The IRS has seized about $6,200 of the total of about $16,000 that I have refused to pay so far. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS will continue to seize money if they find it.

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car, so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer and hard cider so as to avoid the federal excise tax on alcoholic beverages. For the first half of last year I tried drinking no taxed alcoholic beverages unless I was at someone else’s home or on those rare occasions when I was in a bar or restaurant. That worked well until a month-long vacation interrupted my home-brewing schedule and left me high and dry for a while, so I slipped back into less-pure habits.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a good and sustainable one. 2010 was a good year for me income-wise. I brought in close to $33,000 in profit from my home-based business.

My regular expenses for things like rent, utilities, food, transportation, and such came to about $1,350 per month. Because I’m self-employed, my health insurance premium is a deductible expense that doesn’t count toward the $16,750 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (in addition, I use a Health Savings Account so my health insurance deductible is also tax-free).

Not included in the above pie chart are any business expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses, therefore, take about $13,300 out of that $16,750. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $4,000 or so, half of which also counts against the $16,750.

Things were pretty fat this year and I felt more financially relaxed. I didn’t adopt any notable new cost-saving measures, and I never got around to doing my annual ritual of taking a month to carefully account for all of my spending, day in and day out.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer / web programmer and sales of my books. The capital losses are from sales of mutual funds and stocks.

Now on to my Adjusted Gross Income:

This year, I put away $5,813 for retirement and $3,050 for future medical spending (or for retirement, if I stay healthy). That represents almost 30% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it (isn’t that rich — they charge you income tax on money you never saw because it was taken as your contributions to social security — and then they may charge you income tax again on your social security benefits if you’re lucky enough to live so long!). If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your self-employment tax as a deduction here to even things out (yes, even if you’re refusing to pay it like I am).

My Adjusted Gross Income is below the $16,750 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Hopefully I got it right the first time this year. Last year I incorrectly failed to apply for the Earned Income Tax Credit because I mistakenly assumed I wouldn’t qualify. The IRS was happy to correct my mistake.♦

Other Goals

I hope to encourage other people to consider tax resistance and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

I wrote articles on tax resistance and related issues for the New Escapologist♦ and Living Nonviolence♦. I have also spread the word elsewhere, and have done a bit of one-on-one counseling to help new resisters hit the ground running. The write-ups on tax resistance I’ve done for Wikipedia get lifted or paraphrased from time-to-time for mainstream media reports.

I’ve translated, inexpertly, a number of articles and essays concerning the war tax resistance movement in Spain, which is engaged in some more sophisticated dialog and criticism than can be found in the current English-language movement.♦♦♦♦♦

I published a new book this year, Rebecca Riots!: True Stories of the Transvestite Terrorists who Vexed Victoria, combining a reprint of Henry Tobit Evans’s book on the toll resistance campaign in Wales with some additional material.♦

I’ve been serving on the Administrative Committee of NWTRCC, helping organize meetings and do some of the behind-the-scenes business. I’ve put in a lot of hours trying to help organize the upcoming Spring national gathering in Berkeley. I also did a lot of behind-the-scenes work to pave the way for the launch of the redesigned NWTRCC website.♦

The state of the world and the tax resistance movements

The wars drag on, and the Obama administration is maintaining America’s repulsive policies on war & militarism, Big Brotherish snooping, impunity for torturers, propping up tyrants, and so forth. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds. My only consolation is that the politicians in charge are so craven and short-sighted as to be unable or uninterested in preventing the foreseeable meltdown of the system that nurtures them.

The war tax resistance movement (and the anti-war movement in general) is in the doldrums, deflated by the election of Obama who, though he has surrounded himself with hawks in his cabinet, increased the size and expense of the military, quickly ramped up the Afghanistan war, endorsed the Patriot Act, maintained the status quo at Guantanamo, and given a free pass to the nation’s torturers, seems to still be the darling of many of the progressives who make up the bulk of the ostensible peace movement.

I confess myself to be frustrated and I despair of seeing Americans rise up to reclaim some dignity and decency. When I started this experiment I was all fired up with the project of convincing all the angry anti-war protesters out in the streets to buckle down and start making resistance and dissent part of their day-to-day lives. Now I more and more see myself as mostly just trying to keep the flame lit so that should people ever feel the weight of that final straw they won’t have to start from scratch.

That said, I certainly admire Bradley Manning’s action, and I did find the WikiLeaks operation to be encouraging. It strikes me as a vulnerable model, but its at least temporary successes in grassroots anti-authoritarian activism were well-testified-to by the venomous frenzy of the reactions of the defenders of the status quo.♦

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to have another year of living comfortably and well under the income tax line.

That said, I’ve entered a disruptive period in my personal life — my long-term relationship (almost as long as this blog’s “experiment”) has come to an end and I’ve been hunting for a new place to live. I’m also expecting to take this opportunity to do some lifestyle reassessment along the way. It’s hard to tell how well my past budget will predict my future expenses, but I figure that while some line-items are likely to change, the bottom line probably won’t move much.

In any case, I will likely “owe” self-employment tax again this year. I’ve budgeted for the possibility that the IRS may find a way to seize money from me this year for unpaid back taxes, so in case this happens, it won’t be a disaster.

I continue to research historical examples of tax resisters and tax resistance campaigns, partially in preparation for a new, expanded edition of my American Quaker War Tax Resistance collection. I still daydream from time to time of distilling some of what I’ve learned about tax resisters and tax resistance campaigns historically into a book of advice for tax resistance organizers, in the hopes that the campaigns of tomorrow can learn from the successes, failures, and challenges of those that came before.

So on to year #9 of what is looking less and less like an experiment and more and more like a lifestyle.

Nine years ago, on 19 March 2003, the U.S. invasion of Iraq began. For me, this was the last straw and so I started what I then called “an experiment” in tax resistance.♦

A review of my goals

My primary goal was to stop financially supporting the U.S. government. I hoped to do this legally by reducing my federal income tax burden to zero — lowering my income below the tax line by taking legal deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in each of the following tax years I succeeded.

However, I have had a federal self-employment tax assessment most of these years (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well. I have been unable to find a useful way to do this legally, and so I have simply (but illegally) refused to write the check. Because of this I have been racking up an unpaid tax bill, along with penalties & interest.

The IRS has periodically attempted to levy bank accounts to seize these back taxes, with mixed success. They didn’t manage to take anything from me over the last two years, though they send me pleading letters from time to time. Their recent lack of action may be because they’ve run out of obvious targets, or it may be because until this year’s tax filing, my total overdue amount fell under the threshold at which they start trying harder.♦

My two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems the best alternative.

Last year I owed, and refused to pay, about $4,000 in federal taxes, all from the self-employment tax.

The IRS has seized about $6,237 (or perhaps $6,072; our figures differ) of the total of about $17,750 (plus another $1,700 or so in penalties and interest) that I have refused to pay so far. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS will continue to seize money if they find it, though lately they haven’t shown much enthusiasm for the hunt.

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car, so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer and hard cider so as to avoid the federal excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a good and sustainable one. 2011 was a good year for me income-wise. I brought in a little over $32,000 in profit from my home-based business.

My regular expenses for things like rent, utilities, food, transportation, and such come to about $1,477 per month. Because I’m self-employed, my health insurance premium is a deductible expense that doesn’t count toward the $17,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (in addition, I use a Health Savings Account so my health insurance deductible is also tax-free).

Not included in the above pie chart are any business expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses, therefore, take about $15,875 out of that $17,000. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $4,000, half of which also counts against the $17,000 (and would put me over the top).

Things were pretty fat this year, income-wise, but some of my expenses also rose, as I moved to a new home with a higher rent. In mid-2011 I did a close audit of my spending to try and figure out whether I was sticking to a sustainable budget. I seem to be doing okay, but without a whole lot of wiggle room. ♦

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer / web programmer and sales of my books. The capital losses are from sales of mutual funds and stocks a couple of years back (carryover losses, that is). I don’t anticipate having much in the way of capital losses to draw on next year, so I may have to limit my income a little further or boost my deductions and credits somehow.

Now on to my Adjusted Gross Income:

This year, I put away $5,813 for retirement and $3,050 for future medical spending (or for retirement, if I stay healthy). That represents almost 30% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it (isn’t that rich — they charge you income tax on money you never saw because it was taken as your contributions to social security — and then they may charge you income tax again on your social security benefits if you’re lucky enough to live so long!). If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your self-employment tax as a deduction here to even things out (yes, even if you’re refusing to pay it like I am).

My Adjusted Gross Income is well below the $17,000 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Other Goals

I hope to encourage other people to consider tax resistance and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

I wrote articles on tax resistance and related issues for the New Escapologist♦ and Early Retirement Extreme♦. I have also spread the word elsewhere, and have done a bit of one-on-one counseling to help new resisters hit the ground running. The write-ups on tax resistance I’ve done for Wikipedia get lifted or paraphrased from time-to-time in mainstream media reports.

I published a second, much-expanded edition of American Quaker War Tax Resistance this year.♦ I also released Kindle editions of some of my books.♦♦

I finished my term on the Administrative Committee of NWTRCC, and as a sort of last hurrah, I put in a lot of hours helping to organize the Spring 2011 national gathering in Berkeley and Oakland. ♦ I also did a lot of behind-the-scenes work to maintain the NWTRCC website. I’m now on a new NWTRCC committee called the “Rapid Outreach Working Group” which hopes to help emerging anti-war activist campaigns and groups to incorporate war tax resistance into their projects. So far we’ve done a lot of fishing but not much catching.

The state of the world and the tax resistance movements

By now it is clear that the evil of the American government was in no ways diminished by the election of the Nobel Ridiculous Peace Prize laureate. The Obama administration is maintaining America’s repulsive policies on war & militarism, Big Brotherish snooping, impunity for torturers, propping up tyrants, and so forth. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds.

My only consolation is that the politicians in charge are so craven and short-sighted as to be unable or uninterested in preventing the entirely foreseeable meltdown of the system that nurtures them. The IRS in particular continues to be plagued by greater bureaucratic responsibilities but less funding, making it less capable and more deserving of contempt.

Tax resistance movements

The war tax resistance movement (and the anti-war movement in general) is in the doldrums. Peace activists, though many have recovered from their Obamania, do not seem to have been inclined to adopt stronger tactics, by and large. There has been some soul-searching inside war tax resistance circles about how to improve the image, increase the influence, and expand the reach of the war tax resistance movement.♦

I confess myself to be frustrated and I despair of seeing Americans rise up to reclaim some dignity and decency. When I started this experiment I was all fired up with the project of convincing all the angry anti-war protesters out in the streets to buckle down and start making resistance and dissent part of their day-to-day lives. Now I more and more see myself as mostly just trying to keep the flame lit so that should people ever feel the weight of that final straw they won’t have to start from scratch.

That said, I certainly admire Bradley Manning’s action, and I did find the WikiLeaks operation to be encouraging. I like some of what I’m seeing from the more overtly anti-authoritarian turn the “anonymous” hacker movement has been taking lately. The “Oath Keepers” — military and law enforcement personnel who have extra-ordinary oaths to disobey anticipated orders they believe to be unconstitutional — also seem worth keeping track of, as they may be the cutting edge of a division between the political and praetorian classes.

The TEA Party seems to be dying out, or to be dissolving into the general muck of electoral politics, and I haven’t seen anything of interest there lately. There were some encouraging things coming out of the Occupy movement last year, but tax resistance wasn’t one of them (“tax the rich” is the more popular message).♦♦♦

Internationally, tax resistance seems to be becoming a more prominent tactic. I’ve noticed examples in China, Spain, Greece, Italy, Mexico, Guinea Bissau, Ireland, and Argentina, for instance. But maybe I’m just getting better at monitoring international news.

The Picket Line

The Picket Line has largely lost its focus on contemporary tax resistance and activism and has more and more become a collection of notecards on tax resistance campaigns of yesteryear. This does concern me a bit, but I have (as yet vague) hopes of bringing things back around to the present day by creating a summary of the lessons from history in the form of a book along the lines of What to Expect When You’re Expecting (to successfully challenge the government with a tax resistance campaign) in the expectation that sooner or later, such a book will be useful.

I finished my series of reproductions from The Vote on tax resistance in the British women’s suffrage movement last year. In addition, I moved The Picket Line from XHTML to HTML5 and created the curious “Chronoscope” chronological search engine for site content.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to have another year of living comfortably and well under the income tax line.

In any case, I will likely “owe” self-employment tax again this year. I’ve budgeted for the possibility that the IRS may find a way to seize money from me this year for unpaid back taxes, so in case this happens, it won’t be a disaster.

I still daydream from time to time of distilling some of what I’ve learned about tax resisters and tax resistance campaigns historically into a book of advice for tax resistance organizers, in the hopes that the campaigns of tomorrow can learn from the successes, failures, and challenges of those that came before. Maybe this year will be the year I get cracking.

So on to year #10 of what is looking less and less like an experiment and more and more like a lifestyle.

Ten years ago, on 19 March 2003, the United States began its “shock and awe” invasion of Iraq. For me, this shameful and repulsive act was the last straw and I started what I then called “an experiment” in tax resistance so that I would no longer feel complicit.♦

A review of my goals

My primary goal was to stop financially supporting the activities of the U.S. government. I hoped to do this legally by reducing my federal income tax burden to zero, so I lowered my income below the tax line by taking legal deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in each of the following tax years I succeeded.

However, I have been assessed a federal self-employment tax most of these years (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well. I have been unable to find a useful way to do this legally, and so I have simply (but illegally) refused to write the check. Because of this I have been racking up an unpaid tax bill, along with penalties & interest.♦

The IRS has periodically attempted to levy bank accounts to seize these back taxes, with mixed success. They haven’t managed to take anything from me in several years, though they send me pleading letters from time to time. Their recent lack of action may be because they’ve run out of obvious targets, or it may be because my total overdue amount falls under the threshold at which they start trying harder (budget cuts have largely caused them to back off a bit on their enforcement).

My two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems the best alternative.

Last year I owed, and refused to pay, about $4,750 in federal taxes, all from the self-employment tax.

The IRS has seized about $6,237 (or perhaps $6,072; our figures differ) of the total of about $24,000 (which includes penalties and interest) that I have refused to pay so far. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS will continue to seize money if they find it, though lately they haven’t shown much enthusiasm for the hunt.

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car, so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer and hard cider so as to reduce my contributions to the federal excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a good and sustainable one. 2012 was a good year for me income-wise. I brought in about $35,750 in profit from my home-based business.

My regular expenses for things like rent, utilities, food, transportation, and such come to about $1,400 per month. Because I’m self-employed, my health insurance premium is a deductible expense that doesn’t count toward the $17,750 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance (in addition, I use a Health Savings Account so my health insurance deductible is also tax-free).

Not included in the above pie chart are any business expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses take about $17,000 out of that $17,750. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $4,750, half of which also counts against the $17,750 (and puts me well over the limit).

Things were pretty fat this year, income-wise, but some of my expenses also rose (for instance, my cat was diagnosed with diabetes and has required a lot of expensive medical tests). Late last year I did a close audit of my spending to try and figure out whether I was sticking to a sustainable budget. I seem to be doing okay, but without a whole lot of wiggle room.♦

My 1040: A walk-through

I haven’t finished filling out my tax returns this year, but I’ve been tracking the numbers in a spreadsheet so that I have a pretty good idea of how it will look. Here’s how I think my 1040 will work out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer / web programmer and sales of my books. The capital losses are left over from sales of mutual funds and stocks a few years back (carryover losses, that is).

Now on to my Adjusted Gross Income:

Last year, I put away $11,629 for retirement and $3,100 for future medical spending (or for retirement, if I stay healthy). Together, those represent over 40% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your self-employment tax as a deduction here to even things out (even if you’re refusing to pay it like I am).

My Adjusted Gross Income is well below the $17,750 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

I expect that number to jump a bit in 2013 (if my income stays about the same) since the self-employment tax has risen after a temporary cut.

Other Goals

I hope to encourage other people to consider tax resistance and I hope that The Picket Line is a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

I contributed an article about low-income tax resistance to Sharable magazine, which then became the headline topic on the Porc Therapy podcast.♦♦ I have also spread the word elsewhere, and have done a bit of one-on-one counseling to help new resisters hit the ground running. The write-ups on tax resistance I’ve done for Wikipedia get lifted or paraphrased from time-to-time in mainstream media reports.

I finished categorizing the research I have been doing for my next book, tentatively titled Tactics of Successful Tax Resistance Campaigns, and delivered a presentation summarizing some of this research at the 14^th International Conference on War Tax Resistance and Peace Tax Campaigns in Bogotá, Colombia, last month.♦♦

I created a press release to support Cindy Sheehan in her battle with the IRS, and to link her work with that of other California war tax resisters.♦

I’m on a new NWTRCC committee called the “Rapid Outreach Working Group” which hopes to help emerging anti-war activist campaigns and groups to incorporate war tax resistance into their projects. So far we’ve done a lot of fishing but not much catching, although we did link up successfully with the Global Day of Action on Military Spending last year. I have also done a lot of behind-the-scenes work to maintain the NWTRCC website and to keep its Facebook presence lively.♦

The state of the world and the tax resistance movements

By now it is clear that the evil of the American government was in no ways diminished by the election of the Nobel Ridiculous Peace Prize laureate. The Obama administration is maintaining America’s repulsive policies on war & militarism, Big Brotherish snooping, impunity for torturers, propping up tyrants, and so forth. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds.

My only consolation is that the politicians in charge are so craven and short-sighted as to be unable or uninterested in preventing the entirely foreseeable meltdown of the system that nurtures them. Indeed they seem to be falling over each other to press for “solutions” that exacerbate the problems. The system seems to have built-in incentives that drive it to suicide, which takes some of the pressure off of those of us who are trying to kill it.

The IRS in particular continues to be plagued by greater bureaucratic responsibilities but reduced funding, making it less capable and more deserving of contempt.♦ The tax system has become so unmanageable that criminals (some from behind bars while doing time on other charges) are milking it for billions of dollars by means of identity theft and tax fraud.♦

Tax resistance movements

The war tax resistance movement (and the anti-war movement in general) is in the doldrums. Peace activists, though some have finally recovered from their Obamania, do not seem be inclined to adopt stronger tactics, by and large. There has been some soul-searching inside war tax resistance circles about how to improve the image, increase the influence, and expand the reach of the war tax resistance movement.♦

Now that I’ve moved out of the San Francisco bay area and back to my old home town of San Luis Obispo, I’ve started to hunt around for local anti-war or libertarian/anarchist communities that might be receptive to the tax resistance message. If there’s an anti-war movement here, they’re hiding well, but I’ve put some baited hooks in the water.

I confess myself to be frustrated and I despair of seeing Americans rise up to reclaim some dignity and decency. When I started this experiment I was all fired up with the project of convincing all the angry anti-war protesters out in the streets to buckle down and start making resistance and dissent part of their day-to-day lives. Now I more and more see myself as mostly just trying to keep the flame lit so that should people ever feel the weight of that final straw they won’t have to start from scratch.

To the extent that the remnants of the “Occupy” movement represent the cutting edge of progressive activism, there isn’t much there for war tax resisters to grab on to yet. “Progressives” seem so eager to defend government taxes and spending, or to “tax the rich” from motives little-removed from pure spite, that they’re willing to blind themselves to all the harm the government does with what it already takes.♦

Internationally, tax resistance seems to be becoming a more prominent tactic. I’ve noticed recent examples from Spain (and Catalonia), Greece, Italy, the United Kingdom, Chile, Indonesia, and Ireland, for instance (but maybe I’m just getting better at monitoring international news). Spain has been a particularly interesting case, as the war tax resistance movement there has expanded their critique, their participation, and their tactics to embrace new anti-austerity and anti-centralization activists.

The Picket Line

I have been using The Picket Line as a big cluttered desk to hold and index the material I have been collecting on tax resistance campaigns from around the world and throughout history, and I think I’ve probably lost a lot of readers by doing this, though in these days of feed aggregators and the like, it’s hard to get a feel for my audience size. Lately, I have been bringing things back around to the present day by creating a summary of the lessons from history in preparation for writing a book on the subject (which I’m hard at work on now and hope to get published in the coming year).

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to have another year of living comfortably and well under the income tax line.

In any case, I will likely “owe” self-employment tax again this year, at the new higher rate. I’ve budgeted for the possibility that the IRS may find a way to seize money from me this year for unpaid back taxes, so in case this happens, it won’t be a disaster.

So on to year #11 of what no longer seems like experiment so much as a lifestyle.

Eleven years ago, on 19 March 2003, the United States began its “shock and awe” attack on Iraq. For me, this shameful and repulsive act was the last straw and I started what I then called “an experiment” in tax resistance so that I would no longer feel complicit.♦

A review of my goals

My primary goal was to stop financially supporting the activities of the U.S. government. I hoped to do this legally by reducing my federal income tax burden to zero, so I lowered my income below the tax line by taking legal deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in each of the following years I have succeeded.

However, I have been assessed a federal self-employment tax most of these years (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well. I have been unable to find a useful way to do this legally, and so I have simply (but illegally) refused to write the check. Because of this I have been racking up an unpaid tax bill, along with penalties & interest, which is by now about $28,000.

The IRS has occasionally attempted to levy bank accounts to seize these back taxes, with mixed success. They have seized about $6,000 of the total of about $34,000 (including penalties & interest) that I have refused to pay so far. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS will continue to seize money if they find it, though lately they haven’t shown much enthusiasm for the hunt. They haven’t managed to take anything from me in several years, though they send me pleading letters from time to time. Their recent lack of action may be because they’ve run out of obvious targets, or it may be because my total overdue amount falls under the threshold at which they start trying harder (budget cuts in recent years have caused them to back off a bit on their enforcement). They may just be biding their time, as the statute of limitations deadline on the oldest unpaid amount doesn’t run out for a few years yet.

My two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems the best alternative.

Last year I owed, and refused to pay, about $6,000 in federal taxes, all from the self-employment tax.

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car, so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer and hard cider so as to reduce my contributions to the federal excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a good and sustainable one. 2013 was a good year for me income-wise. I brought in about $39,150 in profit from my business.

My regular expenses for things like rent, utilities, food, transportation, and such come to about $1,675 per month. But some of these expenses (business expenses, medical expenses that I can pay via my Health Savings Account) do not count toward the $18,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance. My health insurance is now heavily subsidized via Obamacare, but this doesn’t mean much to my bottom line as this was an expense I could have taken as a tax deduction anyway.

Not included in the above pie chart are any business expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses take a bit less than $15,000 out of that $18,000. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $6,000 or so, half of which also counts against the $18,000 (and puts me at the limit).

Things were pretty fat this year, income-wise, but some of my expenses also rose (for instance, my diabetic cat has required a lot of expensive medical tests, regular insulin injections, and special cat food — almost all of the “miscellany” section of the pie chart above has to do with my expensive but adorable cat). Late last year I did a close audit of my spending to try and figure out whether I was sticking to a sustainable budget. I seem to be doing fine.♦

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer and sales of my books.

Now on to my Adjusted Gross Income:

Last year, I put away $12,650 for retirement and $3,250 for future medical spending (or for retirement, if I stay healthy). Together, those represent over 40% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half of your self-employment tax as a deduction here to even things out (even if you’re refusing to pay it like I am).

Next year I won’t have the health insurance deduction, as Obamacare is reducing my premiums to a negligible amount. The upshot of this is that I will not be able to earn as much income this year, but my expenses will be lower so lifestyle-wise it will be a wash.

My Adjusted Gross Income is just below the $17,750 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Other Goals

The big story last year was that I completed my book 99 Tactics of Successful Tax Resistance Campaigns, which is now available to the public. I don’t have much of a marketing campaign for it, but it’s slowly gaining attention here and there.

I hope to encourage other people to consider tax resistance and I hope that The Picket Line is also a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

The state of the world and the tax resistance movements

The Obama administration continues to advance America’s repulsive policies on war & militarism, Big Brotherish snooping, impunity for torturers, propping up tyrants, and so forth. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds.

My only consolation is that the politicians in charge are so craven and short-sighted as to be unable or uninterested in preventing the entirely foreseeable meltdown of the system that nurtures them. Indeed they seem to be falling over each other to press for “solutions” that exacerbate the problems. The system seems to have built-in incentives that drive it to suicide, which takes some of the pressure off of those of us who are trying to kill it.

The IRS in particular continues to be plagued by greater bureaucratic responsibilities but reduced funding, making it less capable and more deserving of contempt.♦ The tax system has become so unmanageable that criminals (some from behind bars while doing time on other charges) are milking it for billions of dollars by means of identity theft and tax fraud.♦

Tax resistance movements

The war tax resistance movement (and the anti-war movement in general) is in the doldrums. Peace activists, though some have finally recovered from their Obamania, do not seem be inclined to adopt stronger tactics, by and large, but are satisfied with marches and speeches and petitions and other such pussyfooting.

There has been some soul-searching in war tax resistance circles about how to improve the image, increase the influence, and expand the reach of the war tax resistance movement,♦ and I’ve been participating in this as part of NWTRCC’s strategy and outreach subcommittees.

I confess myself to be frustrated and I despair of seeing Americans rise up to reclaim some dignity and decency. When I started this experiment I was all fired up with the project of convincing all the angry anti-war protesters out in the streets to buckle down and start making resistance and dissent part of their day-to-day lives. Now I more and more see myself as mostly just trying to keep the flame lit so that should people ever feel the weight of that final straw they won’t have to start from scratch.

Tax resistance movements have been breaking out all over the world, though I wonder how much of this is a trend and how much of it is my increased ability to monitor current events in foreign languages thanks to some neat internet tools. The bonnets rouges movement in France, in particular, with their Rebeccaite tollgate destruction sprees, was fascinating to watch unfold, but if I’d had to rely on accounts in the English-language press I might not have even been aware it was happening.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to have another year of living comfortably and well under the income tax line.

In any case, I will likely “owe” self-employment tax again this year. I’ve budgeted for the possibility that the IRS may find a way to seize money from me this year for unpaid back taxes, so in case this happens, it won’t be a disaster.

So on to year twelve of what no longer seems like an experiment so much as a lifestyle.

Twelve years ago, on 19 March 2003, the United States began its “shock and awe” attack on Iraq. This shameful and repulsive act was the last straw for me and I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦

A review of my goals

My primary goal was to stop financially supporting the activities of the U.S. government. I hoped at first to be able to do this legally by reducing my federal income tax burden to zero. So I lowered my income below the federal income tax line by quitting my job to become an independent contractor, and by taking advantage of legal tax deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding all federal income tax, but in the following years I have largely succeeded.

However, I have been assessed a federal self-employment tax most of these years (this is different from the income tax). In 2006 I decided to stop voluntarily paying this tax as well. I have been unable to find a useful way to do this legally, and so I have simply (but illegally) refused to write the check. Because of this I have been racking up an unpaid tax bill, along with IRS-added penalties & interest, which by now totals about $37,000.

The IRS has occasionally attempted to levy bank accounts to seize these back taxes, with mixed success. They have seized about $6,000 of the total of about $43,000 (including penalties & interest) that I have refused to pay so far. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS may continue to seize money if they find it, though lately they haven’t shown much enthusiasm for the hunt. They haven’t managed to take anything from me in several years, though they still send me pleading letters from time to time. Their recent lack of action may be because they’ve run out of obvious targets, or it may be because my total overdue amount falls under the threshold at which they start trying harder (budget cuts have caused them to back off a bit on their enforcement). They may also just be biding their time, as the statute of limitations deadline on the oldest unpaid amount doesn’t run out for a few years yet.

My two-track strategy of legally avoiding the federal income tax while illegally refusing to pay the self-employment tax is an awkward and perhaps untenable compromise, but for me it currently seems the best alternative.

Last year I owed, and refused to pay, about $5,681 in federal taxes, which represents $5,130 in self-employment tax, $418 in federal income tax, and a $133 “late” payment penalty. This is the first year I’ve owed any federal income tax since the year I started my “experiment” — this is because I miscalculated and overshot my maximum adjusted gross income by $328. That $328 ended up costing me $418… for a marginal income tax rate of over 125%… whoops.

Although excise taxes are a very small part of what the government tries to get me to pay, I’ve adopted avoidance techniques here as well: for instance, I long ago gave up owning a car, so I pay very little federal excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer and hard cider so as to reduce my contributions to the federal excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, and so it is important that my expenses remain low enough that my tax-free income is also a good and sustainable one. 2014 was a good year for me income-wise. I brought in about $36,300 in profit from my business.

My regular expenses for things like rent, utilities, food, transportation, and such come to about $1,575 per month. But some of these expenses (business expenses, medical expenses that I can pay via my Health Savings Account) do not count toward the $18,000 tax-free disposable income that I’m allowed to use under my DON Method of tax resistance. My health insurance is now heavily subsidized via Obamacare, but this doesn’t mean much to my bottom line as this was an expense I could have taken as a tax deduction anyway.

Not included in the above pie chart are any business expenses that I can deduct or my self-employment tax assessment (half of which I can deduct). My yearly living expenses take a bit more than $14,000 out of that $18,000. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $6,000 or so, half of which also counts against the $18,000 (and puts me close to my limit).

This expenses pie chart is a little deceptive when compared to those of other years. My rent is lower than usual because I buy and prepare most of the household food and so pay some of my “rent” off that way.

My cat is more than usually expensive as it has diabetes and so needs regular insulin injections and prescription food. My transportation budget is low because where I live it’s pretty easy to get around on bike so I don’t own a motor vehicle and rarely need to use one.

Things were pretty fat this year, and my expenses stayed pretty flat. Late last year I did a close audit of my spending to try and figure out whether I was sticking to a sustainable budget. I seem to be doing fine.♦

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer and sales of my books. The interest income came from a small Lending Club account I started last year.

Now on to my Adjusted Gross Income:

Last year, I put away $12,248 for retirement and $3,300 for future medical spending (or for retirement, if I stay healthy). Together, those represent over 40% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that half of your FICA doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves and it’s all considered income, so the IRS lets you take half (roughly) of your self-employment tax as a deduction here to even things out (even if you’re refusing to pay it like I am).

I don’t have as much of a health insurance deduction this year as in years past, as Obamacare has reduced my premiums to a negligible amount. The upshot of this is that I was not able to earn quite as much income this year, but my expenses were also lower so lifestyle-wise it was a wash.

My Adjusted Gross Income is just above the $18,000 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I missed my target and owed $418 in federal income tax this year: it’s a tiny amount compared to the self-employment tax, and now that I’m resisting by simply refusing to pay it’s less tactically important that I stay below the tax line, but I still found it embarrassing.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Other Goals

I hope to encourage other people to consider tax resistance and I hope that The Picket Line is also a good resource for people doing tax resistance and for those considering it. I keep trying to make it more useful.

I had the pleasure last year of being contacted by an activist in Hong Kong’s Umbrella Movement to consult with them about adding tax resistance campaigns to their campaign for political liberalization there.

The state of the world and the tax resistance movements

The Obama administration continues to advance America’s repulsive policies on war & militarism, Big Brotherish snooping, impunity for torturers, propping up tyrants, and so forth. The thievery and mendacity of the politicians and the wizards of financial corruption that eat from the same troughs in Washington seems to know no bounds.

My only consolation is that the politicians in charge are so craven and short-sighted as to be unable or uninterested in preventing the entirely foreseeable meltdown of the system that nurtures them. Indeed they seem to be falling over each other to press for “solutions” that exacerbate the problems. The system seems to have built-in incentives that drive it to suicide, which takes some of the pressure off of those of us who are trying to kill it.

The IRS in particular continues to be plagued by greater bureaucratic responsibilities but reduced funding, making it less capable and more deserving of contempt. The tax system has become so unmanageable that criminals (some from behind bars while doing time on other charges) are milking it for billions of dollars by means of identity theft and tax fraud, while an entire overseas industry has grown up around impersonating IRS agents in order to shake down Americans over the phone.♦ These and other factors have led to predictions that the public credibility of our federal tax system may soon collapse and the long-standing norm of widespread taxpayer compliance will come to an end in this country.

Tax resistance movements

The war tax resistance movement (and the anti-war movement in general) is in the doldrums. Peace activists, though some have finally recovered from their Obamania, do not seem be inclined to adopt stronger tactics, by and large, but are satisfied with marches and speeches and petitions and occasional symbolic trespassing/blockade civil disobedience and other such pussyfooting.

I confess frustration and I despair of seeing Americans rise up to reclaim some dignity and decency. When I started this experiment I was all fired up with the project of convincing all the angry anti-war protesters out in the streets to buckle down and start making resistance and dissent part of their day-to-day lives. Now I more and more see myself as mostly just trying to keep the flame lit so that should people ever feel the weight of that final straw they won’t have to start from scratch.

Tax resistance movements seem to have been breaking out all over the world, though I wonder how much of this is a trend and how much of it is my increased ability to monitor current events in foreign languages thanks to some neat internet tools. The bonnets rouges movement in France, in particular, with their Rebeccaite tollgate destruction sprees, was fascinating to watch unfold, and it was heartening to see them succeed in their dramatic direct action campaign to force the government to rescind its hated tax, but if I’d had to rely on accounts in the English-language press I might not have even been aware it was happening.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming the tax law doesn’t undergo any radical changes, I’m well-positioned to live comfortably and well under the income tax line next year.

I will likely “owe” self-employment tax again this year. I’ve budgeted for the possibility that the IRS may find a way to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster.

So on to year thirteen of what no longer seems like an experiment so much as a lifestyle.

Thirteen years ago, on 19 March 2003, the U.S. began its “shock and awe” attack on Iraq. This shameful and repulsive act was the last straw for me and I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦

A review of my goals

My goal was to stop financially supporting the U.S. government. I hoped to do this legally by lowering my income below the federal income tax line, so I quit my job to start my own small business and I began taking advantage of additional legal tax deductions and credits.

Tax Resistance

In 2003 I missed my goal of avoiding federal income tax, but in each of the following years I have largely succeeded.

However, I have been assessed a self-employment tax most of these years (this is different from the income tax). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply (but not legally) refused to write the check. Because of this I have been racking up an unpaid tax bill, along with IRS-added penalties & interest, which now adds up to more than $42,000.

The IRS has occasionally levied bank accounts to seize these back taxes, with some success. They have seized about $6,000 of the total of about $49,000 (including penalties & interest) that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS may continue to seize money if they find it, though lately they haven’t shown much enthusiasm for the hunt. They haven’t taken anything from me in several years, though they still send me pleading letters from time to time. Their recent lack of action may mean they’ve run out of easy targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts have caused them to back off a bit on their enforcement). They may also just be biding their time, as the statute of limitations deadline on the oldest unpaid amount doesn’t run out for a couple of years yet.

My two-track strategy of legally avoiding income tax while refusing to pay self-employment tax is somewhat awkward, but it seems the best choice.

Last year I “owed” and refused to pay $5,127 in federal taxes: $5,007 in self-employment tax and a $120 penalty for not paying on time.

Although excise taxes are a small part of what the government tries to get from me, I’ve adopted avoidance techniques here too: for instance, I long ago gave up owning a car, so I pay little excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer so as to reduce my contributions to the excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, so it is important that my expenses remain low enough that my tax-free income is also a sustainable one. 2015 was a good year for me income-wise. I brought in about $35,500 in profit from my business.

My regular expenses for things like rent, utilities, food, and transportation come to about $1,600 per month:

Not included in the above pie chart are any business expenses that I can deduct from my income, health expenses (which I pay from my pre-tax Health Savings Account), or my self-employment tax assessment (half of which I can deduct).

My rent is lower than it has been in the past because I buy and prepare most of the household food and so pay some of my “rent” off that way.

My cat is more than usually expensive as he has diabetes and so needs regular insulin injections and prescription food. My transportation budget is low because where I live it’s pretty easy to get around on bike so I don’t own a motor vehicle and rarely need to use one.

I had unusually high medical expenses last year, but I paid them all from my Health Savings Account which I had been depositing money into for years, so this was not worrisome to my budget or my financial peace of mind.

My yearly living expenses took almost all of the $18,000 that constitutes my “under the tax line” spending money. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $6,000 or so, half of which also counts against the $18,000 (and puts me over my limit).

My income was about as high as I could get it under my plan this year, but my expenses rose as my spending discipline weakened. Late last year I did a close audit of my spending to try and figure out whether I was sticking to a sustainable budget. I discovered I was spending too freely.♦ Since then I’ve been tightening my grip on my wallet a bit and I hope my next audit will show improvement.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer and sales of my books. The interest income and capital loss came from a small Lending Club account I started in 2014. I don’t think I’ll do that again, as the annual reporting of these numbers to the IRS makes such an account especially vulnerable to seizure (though the agency doesn’t seem to have picked up the scent yet).

Now on to my Adjusted Gross Income:

Last year, I put away $12,104 for retirement and $3,350 for future medical spending (or for retirement, if I stay healthy). Together, those savings represent over 40% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax and it’s all considered income, so the IRS lets you take half (roughly) of your self-employment tax as a deduction to even things out (even if you’re refusing to pay the tax like I am).

My Adjusted Gross Income is below the $18,000 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target and owed no federal income tax this year (last year, I just missed the target and so I owed a small amount).

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it.

I also published some writing elsewhere, including a piece on why people should consider not voting for the Center for a Stateless Society blog, a piece on the history of war tax resistance among Quakers for the Friends Journal, and one on the War Tax Resisters Penalty Fund for Waging Nonviolence.

The state of the world and the tax resistance movements

The Obama administration continues to advance America’s repulsive policies on war & militarism, Big Brotherish snooping, impunity for torturers, propping up tyrants, and so forth. The next administration will probably be even worse, judging from the quality of the politicians angling to lead it.

My only consolation is that these politicians are so craven and short-sighted that they are oblivious to the entirely foreseeable meltdown of the system that nurtures them. Indeed they seem to be falling over each other to press for “solutions” that exacerbate the problems. The system seems to have built-in incentives that drive it to suicide, which takes some of the pressure off of those of us who are trying to kill it.

The IRS continues to be plagued by greater responsibilities but reduced funding, making it less capable and more deserving of contempt. The tax system has become so unmanageable that criminals (some from behind bars while doing time on other charges) are milking it for billions of dollars by means of identity theft and tax fraud, while a thriving overseas industry has grown up around impersonating IRS agents in order to shake down Americans over the phone. These and other factors have led to predictions that the credibility of the federal tax system may soon collapse and the long-standing norm of taxpayer compliance will come to an end.♦

Tax resistance movements

The U.S. war tax resistance movement is in the doldrums. It does most of its work in the “progressive” arena, which itself is pretty lackluster these days, even when it isn’t hopelessly intoxicated by the presidential election. Meanwhile, anti-war activists on the libertarian or paleocon side of things don’t seem to have developed much of a culture of direct action or civil disobedience in which war tax resistance could thrive, in spite of some recent feints in that direction from folks like Charles Murray♦ and Ron Paul.♦

I despair of seeing Americans rise up to reclaim some dignity and decency. When I started this experiment I was all fired up with the project of convincing the angry anti-war protesters in the streets to buckle down and make resistance and dissent part of their day-to-day lives. Now I see myself as mostly trying to keep the flame lit so that if people finally feel the weight of that final straw they won’t have to start from scratch.

In more encouraging news, tax resistance movements are breaking out elsewhere all over the world (though I wonder how much of my perception of this is a result of my increased ability to monitor current events in foreign languages thanks to some neat internet tools). While in the U.S. people resignedly grumble “death and taxes, what can you do?” I’ve seen tax resistance campaigns break out in Argentina, Belarus, Burundi, the Congo, Denmark, Ghana, Iceland, India, Israel, Italy, Kenya, Mexico, New Zealand, Pakistan, Puerto Rico, Russia, South Africa, Spain, Venezuela, and Wales, as well as ongoing campaigns in Catalona, Greece, Honduras, Ireland, Italy, and Spain.♦ There is a lot of encouraging innovation coming out of the “comprehensive disobedience” movement in Spain, in particular.♦

Prospects for the coming year

Assuming no major unexpected expenses, and assuming no big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will again “owe” self-employment tax.

I’ve budgeted for the possibility that the IRS may seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster.

So on to year fourteen of what no longer seems like an experiment so much as a way of life.

Fourteen years ago, on 19 March 2003, the U.S. began its “shock and awe” attack on Iraq. This shameful and repulsive act was the last straw for me and I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦

My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this legally by lowering my income below the federal income tax line, so I quit my job to start my own small business and I began taking advantage of additional legal tax deductions and credits. In 2003 I missed my goal of avoiding federal income tax, but in each of the following years I have largely succeeded.

However, I have been assessed a self-employment tax most of these years (this is different from the income tax but also goes to the federal government). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply (but not legally) refused to write the check. Because of this I have been racking up an unpaid tax bill which, along with penalties & interest added by the IRS, minus a bit that they’ve managed to seize from me over the years, now adds up to something in the neighborhood of $50,000.♦

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward, but is working for me so far.

The IRS has on a few occasions levied bank accounts, with some success: They have seized about $6,000 of the total of about $56,000 (including penalties & interest) that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS may continue to seize money if they find it, though lately they haven’t shown much enthusiasm for the hunt.

They haven’t taken anything at all from me in several years, though they still send me pleading letters from time to time. Their recent lack of action may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts have caused them to back off on their enforcement). They may also just be biding their time, as the statute of limitations deadline on the oldest unpaid amount doesn’t run out for a year or so yet.

I would not be at all surprised to see the agency turn my account over to the quasi-private debt collectors who have been newly-authorized to pursue federal tax debts.♦

Last year I “owed” and refused to pay $4,247 in federal taxes: $4,147 in self-employment tax and a $100 penalty for not paying in quarterly installments like I’m supposed to.

Although excise taxes are a small part of what the government tries to get from me, I’ve adopted avoidance techniques here too: I long ago gave up owning a car and so I pay little excise tax on gasoline (at least directly), I don’t smoke and so I don’t pay tobacco taxes, and I home-brew beer so as to reduce my contributions to the excise tax on alcoholic beverages.

Sustainability

I want to resist taxes over the long term, so it is important that my expenses remain low enough that my tax-free income is also a sustainable one. 2016 was a fair year for me income-wise. I brought in a little under $30,000 in profit from my business.

My regular expenses for things like rent, utilities, food, and transportation come to about $1,325 per month:

Not included in the above pie chart are any business expenses that I can deduct from my income, health expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

My rent is artificially low because I buy (or grow) and prepare most of the household food and so pay some of my “rent” off that way.

My cat is more than usually expensive as he is diabetic and so needs regular insulin injections and prescription food. My transportation budget is very low because where I live it’s pretty easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve been learning to do my own bike repairs and maintenance at the local “bike kitchen,” which also keeps the costs low.

My yearly living expenses took most of the $18,500 that constitutes my “under the tax line” spending money. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $6,000 or so, half of which also counts against the $18,500 (and would put me over my limit).

My income was about $5,000 lower than it could have been this year, so I used the tactic of transferring $5,000 from my traditional IRA into my Roth IRA. I must declare that $5,000 as additional income this year, but as my income tax bracket is effectively 0%, this means I won’t pay taxes on that money today, or (according to the rules of Roth IRAs), when I retire either.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer, and sales of my books. The interest income and capital loss came from a small Lending Club account I started in 2014. I don’t think I’ll do that again, as the annual reporting of these numbers to the IRS makes such an account especially vulnerable to seizure (though the agency never seemed to pick up the scent, and I’ve mostly cleaned out that account now).

Now on to my Adjusted Gross Income:

Last year, I put away $10,971 for retirement and $3,350 for future medical spending (or for retirement, if I stay healthy). Together, those savings represent over 41% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as a deduction to even things out (even if you’re refusing to pay the tax like I am).

My Adjusted Gross Income is below the $18,500 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target and owed no federal income tax this year.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it.

I’ve been doing a little one-on-one tax resistance counseling, and also recently did a webinar for people who want to learn more about tax resistance.

I’ve been more slack than usual this year about writing good content for the blog or for other publications, but I compensated for that by helping to produce some classy new ebook editions of some essential books in the tax resistance library: Tolstoy’s The Kingdom of God is Within You and Ammon Hennacy’s autobiography.

The state of the world and the tax resistance movements

Trump is turning out to be the president America deserves. All of the things that prompted me to turn my back on the government and refuse its demands for help are getting worse day by day.

However, it’s increasingly likely that the empire of the United States will self-destruct under the idiocy and incompetence of its rulers and the narcotic complacency of its subjects. So there’s an up side. Trump may very well be the last president this country has to suffer through, and if he finally puts a bullet through the skull of this old rabid republic, it may not be pleasant, but you can’t say it’s premature.

The IRS continues to be plagued by greater responsibilities but reduced funding, making it less capable and more deserving of contempt. The tax system has become so unmanageable that criminals (some from behind bars while doing time on other charges) are milking it for billions of dollars by means of identity theft and tax fraud, while a thriving overseas industry has grown up around impersonating IRS agents in order to shake down Americans over the phone. These and other factors, such as Trump’s own notorious contempt for taxpaying, are leading to the collapse of the credibility of the federal tax system, and there is hope that the long-standing norm of taxpayer compliance will come to an end.♦

Tax resistance movements

The U.S. war tax resistance movement is starting to kick into a higher gear, now that its progressive base is awake again. It’s struggling a bit with how to coordinate with new tax resisters who are more anti-Trump than anti-war. It remains to be seen if they will stay true to their pacifist roots and continue to promote war tax resistance exclusively, or if they will evolve with the times and embrace tax resistance as a tactic with a broader use.

Good-hearted Americans are alarmed and infuriated by Trumpism, and more and more are allowing themselves to consider tax resistance as a response, whether in protest, in nonviolent resistance, or in conscientious objection. As yet, this is largely a simmering chorus of “we oughta”s, but it could yet coalesce into something real. Few people with stature seem to want to lead this parade, with the possible exception of Gloria Steinem, and those of us without stature seem to be waiting for a leader to follow, so things are currently stalled.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming no big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will again “owe” self-employment tax. Some sort of tax law shake-up, though, is pretty likely, so I’ll have to keep on my toes.

I’ve budgeted for the possibility that the IRS may seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster.

As my tax debt has risen above the $50,000 threshold, I’m subject to the new law that allows the government to rescind my passport. That would be a pain. The law is new enough that it’s unclear how stringently it will be enforced, but I may find out.

Also, since the IRS seems to have largely given up on doing much more than sending me letters, I would not be surprised to see them turn my case over to the newly-deputized private debt collection agencies. If so, I’ll keep close track of how that process takes place, so others can learn from my experiences.

So on to year fifteen of what no longer seems like an experiment so much as a way of life.

Fifteen years ago, on 19 March 2003, the U.S. began its “shock and awe” attack on Iraq. This was the last straw for me and so I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦

My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this legally by lowering my income below the federal income tax line, so I quit my job to start my own small business and I began taking advantage of additional legal tax deductions and credits. In 2003 I missed my goal of avoiding federal income tax, but in each of the following years I have largely succeeded.

However, I have been assessed a self-employment tax most of these years (this is different from the income tax but also goes to the federal government). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply refused to write the check. Because of this I have been racking up an unpaid tax bill which, along with penalties & interest added by the IRS, minus a bit that they’ve managed to seize from me over the years, now adds up to something in the neighborhood of $59,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward, but has been working for me so far.

The IRS has on a few occasions levied bank accounts, with some success: They have seized about $6,000 of the total of about $65,000 that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS may continue to seize money when they find it, though lately they haven’t shown much enthusiasm for the hunt.

They haven’t taken anything at all from me in several years, though they still send me pleading letters from time to time.♦ Their recent lack of action may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts have caused them to back off on their enforcement). They may also just be biding their time, as the statute of limitations deadline on the oldest unpaid amount doesn’t run out until next month.

This year, for the first time since my tax resistance began, the IRS filed a formal tax lien against me in our local court system. This would make it easier for them to seize money from me if I were to receive settlements or other court-mediated sources of money, and it puts potential creditors on notice that the agency may step in and take money from me before I have the chance to pay them back.♦ The lien has not yet had any practical effect on my life or my resistance, although I’ve been getting an awful lot of automated phone calls lately — I haven’t bothered to answer them, but I suspect they’re from people who want me to buy their “pennies on the dollar” tax debt negotiation services.

Last year I “owed” and refused to pay $5,268 in federal taxes: $5,158 in self-employment tax and a $110 penalty for not paying in quarterly installments like I’m supposed to.

Sustainability

I want to resist taxes over the long term, so it is important that my expenses remain low enough that my income-tax-free income is also a sustainable one. 2017 was a good year for me income-wise. I brought in a little more than $36,500 in profit from my business.

Unfortunately, my expenses also have risen. Rents in my part of California have been rising faster than anywhere else in an already high-rent state, and my rent was one of those that rose. Half of the taxable dollars I spend this year will go just to keeping a roof over my head. When I took a close look at my budget and spending earlier this year, I found that my regular expenses for things like rent, utilities, food, and transportation came to about $1,700 per month:♦

Not included in the above pie chart are any business expenses that I can deduct from my income, health expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

My transportation budget is very low because where I live it’s pretty easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve been learning to do my own bike repairs and maintenance at the local “bike kitchen,” which also keeps the costs low.

My yearly living expenses took all of my “under the tax line” spending money, without much of anything left over. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $5,000 or so, half of which also counts against the under the tax line budget (and would put me way over my limit). I’ve been adopting some new cost-cutting strategies to try to give myself some extra breathing room.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer, and sales of my books. The interest income and capital loss came from a small Lending Club account I started in 2014. I don’t think I’ll do that again, as the annual reporting of these numbers to the IRS makes such an account especially vulnerable to seizure (though the agency never seemed to pick up the scent, and I’ve mostly cleaned out that account now).

Now on to my Adjusted Gross Income:

Last year, I put away $12,150 for retirement and $3,400 for future medical spending (or for retirement, if I stay healthy). Together, those savings represent over 42% of my Total Income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay that tax like I am).

My Adjusted Gross Income is below the $18,500 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit, so I hit my target and owed no federal income tax this year.

Now we go from Adjusted Gross Income to Taxable Income:

And from there, my tax owed:

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it. I’ve also been doing a little one-on-one tax resistance counseling as part of NWTRCC’s network of counselors.

I put on a “War Tax Resistance 101” webinar for NWTRCC last year, a recording of which is available on-line.♦

The state of the world and the tax resistance movements

Trump is turning out to be the president America deserves. All of the things that prompted me to turn my back on the government and refuse its demands for help are getting worse day by day. I’m astonished at how willing Americans seem to be to go along with it, or to just indulge in complaining about it, without altering their base loyalty to the system.

I remain hopeful that the empire of the United States will self-destruct under the idiocy and incompetence of its rulers and the narcotic complacency of its subjects. Trump may very well be the last president this country has to suffer through, and if he finally puts a bullet through the skull of this old rabid republic, it may not be pleasant, but you can’t say it’s premature.

The IRS continues to be plagued by greater responsibilities but reduced funding, making it ever less capable and more deserving of contempt.♦ A thriving overseas industry has grown up around impersonating IRS agents in order to shake down Americans over the phone. These and other factors, such as Trump’s own notorious contempt for taxpaying, are leading to the collapse of the credibility of the federal tax system. A solid majority of Americans now feel the federal tax system is unfair♦, and there is hope that the long-standing norm of taxpayer compliance will come to an end.♦

Tax resistance movements

The U.S. war tax resistance movement is showing some signs of renewed vigor, now that its progressive base is awakening again. It’s struggling a bit with how to coordinate with new tax resisters who are more anti-Trump than anti-war. It remains to be seen if they will stay true to their pacifist roots and continue to promote war tax resistance exclusively, or if they will evolve with the times and embrace tax resistance as a tactic with a broader use.

Good-hearted Americans are alarmed and infuriated by Trumpism, and more and more are allowing themselves to consider tax resistance as a response, whether in protest, in nonviolent resistance, or in conscientious objection. As yet, this is largely a simmering chorus of “why we oughta”s, but it could yet coalesce into something real. Few people with stature seem to want to lead this parade, and those of us without stature seem to be waiting for a leader to follow, so things are currently stalled.

Prospects for the coming year

Assuming no major unexpected expenses, and assuming no big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will again “owe” self-employment tax. The big tax reform bill that everyone was excited about doesn’t seem to have made any real difference in my strategy or in how much income I’ll be able to earn or how much spending I can budget.♦

I’ve budgeted for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster.

The oldest of my tax debts is on the cusp of hitting the statute of limitations cut-off, and so if the IRS doesn’t hurry up, they’ll miss their chance.

As my tax debt has risen above the $51,000 legal threshold, I’m subject to the new law that allows the government to rescind my passport. That would be a pain. The law is new enough that it’s unclear how stringently it will be enforced, but I may soon find out.

So on to year sixteen of what no longer seems like an experiment so much as a way of life.

Sixteen years ago, on 19 March 2003, the U.S. began its “shock and awe” attack on Iraq. For me, this was the last straw and so I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦

My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this legally by lowering my income below the federal income tax line, so I quit my job to start my own small business and I began taking advantage of additional legal tax deductions and credits. This has turned out to be a largely successful method of legally avoiding federal income tax, as well as a rewarding way of making a living, and I continue to operate this way today.

However, I have been assessed a self-employment tax most of these years (this is different from the income tax — much like the FICA tax withheld from the paychecks of employees — but also goes to the federal government). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply refused to write the check. Because of this I have been racking up an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is uncollectible due to the statute of limitations) now adds up to something in the neighborhood of $62,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but has been working for me so far. This year, however, because of changes in the tax law and my overreliance on some incomplete descriptions of those changes in the popular press, I stepped over the federal income tax threshold and was assessed a little income tax as well.

The IRS has on a few occasions levied bank accounts, with some success: They have seized about $6,000 of the total of about $75,000 that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS may continue to seize money when they find it, though lately they haven’t shown much enthusiasm for the hunt.

They haven’t taken anything at all from me in several years, or even seem to have tried, though they still send me pleading letters from time to time.♦♦♦♦ Their recent lack of action may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts and other crises have caused them to back off on their enforcement). They may also just be biding their time, as the statute of limitations deadline on the oldest remaining unpaid amount doesn’t run out until next year.

A Statute of Limitations Success

That said, last year for the first time since I started resisting, one of my tax years did reach that 10-year statute of limitations deadline for collection.♦ I had originally been assessed $3,695 in federal taxes for 2007. Over the years, the IRS had added about $2,800 in penalties & interest to that total. Once, they managed to seize $469 from a bank account of mine, which they applied to that year. But the remaining amount — over $6,000 — is now forever out of their grasp. I wrote a check to the Prisoners Literature Project for the unseized portion of my original tax bill to celebrate and to finally practice some of that tax redirection.

A Tax Lien

Last year, for the first time since my tax resistance began, the IRS filed a formal tax lien against me in our local court system. (This would make it easier for them to seize money from me if I were to receive settlements or other court-mediated sources of money, and it puts potential creditors on notice that the agency may step in and take money from me before I have the chance to pay them back.♦)

The lien has not yet had any practical effect on my life or my resistance, although I’ve been getting an awful lot of advertisements in the mail from shady law businesses, and plenty of automated phone calls — I haven’t bothered to answer them, but I suspect they’re from people who want me to buy their “pennies on the dollar” tax debt negotiation services.♦

Passport Worries

The total amount I owe at this point is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. So far as I know, this hasn’t happened yet (and they’re supposed to notify me if it has). In fact I applied for a renewed passport last year, and the government sent it out to me without complaint.♦

My 2018 Federal Tax Resistance

I only yesterday finished assembling all of the myriad forms I need to file my taxes this year. Just as the politicians promised, I was able to file my return on a postcard (plus eleven supplementary schedules and forms). After all the dust settled, it turned out that last year I “owed” and refused to pay $5,951 in federal taxes: $5,554 in self-employment tax, $259 in federal income tax, and a $137 penalty for not paying in quarterly installments like I’m supposed to.

Sustainability

I want to continue to resist taxes over the long term, so it is important (if I want to stick to the below-the-line method) that my expenses remain low enough that my income-tax-free income is sustainable. 2018 was a good year for me income-wise. I brought in more than $39,000 in profit from my business.

I discovered late in the year that the last big federal tax legislation unexpectedly benefited a little guy like me. I can take advantage of the “20% qualified business income deduction” for small business owners. This means I could have earned even more money (up to around $41,000) last year without owing any income tax on it.

Which is good, as my expenses also have risen in recent years. Rents in my part of California have been rising fast, and rent now amounts to over 60% of my annual expenses. More than half of the taxable dollars I spend go just to keeping a roof over my head. I haven’t done the sort of close, day-by-day look at my spending as I have done in years past, but as best as I can estimate, my regular expenses for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,500 per month, or $18,000 a year:

Not included in the above pie chart are any business expenses that I can deduct from my income, health expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

My transportation budget is very low because where I live it’s pretty easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve been learning to do my own bike repairs and maintenance at the local “bike kitchen,” which also keeps the costs low.

My health-care expenses are a little higher this year as I joined the YMCA gym across the street. My health insurance expense may rise a bit more in the coming year too, as my increased income may have the result of kicking me out of my excellent Obamacare subsidy bracket. I haven’t done the calculations on this yet. In any case, I can take my health insurance premiums as a business expense, so at least it doesn’t count against my below-the-tax-line spending.

My yearly living expenses took most of my “under the tax line” budget, leaving me very little wiggle room for unexpected expenses or splurging. If I budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $5,500 or so of expenses, half of which also counts against the under the tax line budget (and would put me over my limit).

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer, and sales of my books. The capital gains income comes from a small Lending Club account I started in 2014. I don’t think I’ll do that again, as the annual reporting of these numbers to the IRS makes such an account especially vulnerable to seizure (though the agency never seemed to pick up the scent, and I’ve mostly cleaned out that account now).

The IRA withdrawal was really an IRA transfer. I moved some money from my traditional IRA to my Roth IRA. This means I am supposed to declare that money (or my basis in it anyway — and calculating that’s a whole complicated hullabaloo) as income this year.

The reason I did this is because I believed late in the year that I could have brought in much more income while remaining below the income tax line (thanks to the newly-passed tax legislation). I didn’t have time to earn that additional income, so I used this technique to bring in more “income” instead — while at the same time shielding more of my retirement savings from future income tax.

Unfortunately, I miscalculated. I found it difficult to get authoritative information about the new tax legislation in time to do tax planning around it, so I relied on some incomplete information that exaggerated the amount of the Qualified Business Income tax credit I could claim. As it turns out, I should have left well enough alone and just stuck to my earned income for the year.

Now on to my Adjusted Gross Income:

Last year, I put away $13,800 for retirement and $3,450 for future medical spending (or for retirement, if I stay healthy). Together, those savings represent almost 44% of my earned income for last year.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay that tax like I am).

My Adjusted Gross Income is above the $19,000 threshold that would allow me to get the maximum rate on the Retirement Savings Contributions Credit. I incorrectly believed this year that I could get more benefit from the Qualified Business Income credit than I actually could, and so I would not have to rely as much on the Retirement Savings credit, so I did not make a special effort to get below that $19,000 threshold. As we will see, that was a mistake.

Now we go from Adjusted Gross Income to Taxable Income:

In past years there was both a standard deduction and a personal exemption. The new tax law doubled the standard deduction and eliminated the personal exemption (so in practical terms, for me anyway, changed very little). But the law also added a new 20% Qualified Business Income deduction: 20% of that portion of my income that comes from self-employment.

This is meant to level the playing field for those of us who are self-employed or run small businesses and declare our business earnings on our personal income tax forms. The new tax law cut corporate income taxes dramatically, so it was thought that we non-corporate business entities needed a break, too.

But it means that I get a tax break that my employee-brethren, who are doing much the same sort of work that I’m doing as an independent contractor, don’t qualify for. That doesn’t make a whole lot of sense to me, but it works to my advantage. (The law does have a provision that eliminates the credit for service providers like myself, but that provision does not apply until you reach a certain minimum income threshold, which I’m not close to.)

Unfortunately — and this is something that I learned too late to apply it to my tax planning for last year — the credit is capped at 20% of your adjusted gross income minus your standard or itemized deduction (that is, at 20% of what your taxable income would have been without the new qualified business income deduction). This means that instead of getting a $7,862 deduction as I’d hoped, I’m limited to a more meager $1,648 deduction.

Anyway, from there, my tax owed:

I did not qualify for the maximum 50%/$1,000 Retirement Savings Contributions Credit this year. Because my Adjusted Gross Income was too high, my credit was instead only 20%, or a maximum of $400. I thought that was going to be enough to eliminate my federal income tax, but because of my miscalculation of the new qualified business income deduction, it only lopped off 60% of that tax, and my total tax bill is 5% higher than I thought it would be.

I can refuse to pay that 5% just like I refuse to pay the rest, so I won’t lose sleep over it, but it is a blemish on my under-the-tax-line record.

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it. I’ve also been doing a little one-on-one tax resistance counseling as part of NWTRCC’s network of counselors.

I put on a “War Tax Resistance 101” webinar for NWTRCC last year, a recording of which is available on-line.♦

My interest in chronicling tax resistance history led me to do deep-dives into back issues of Friends Bulletin, The Mennonite,♦ and Gospel Herald,♦ the results of which I shared with readers here.

Last year I produced a Standard Ebooks edition of Aristotle’s Nicomachean Ethics,♦ and I also did a close reading of Aristotle’s Politics and tried to extend his methodology to cover the anarchist polis.♦

I gave a presentation at the Spring 2018 NWTRCC national on how war tax resistance has been incorporated into the practices of American religious groups like Quakers, Brethren, Mennonites, Jehovah’s Witnesses, Catholic Workers, and more recently groups like the Agape Community, Restored Israel of Yahweh, and the new monastic movement.♦ I was also interviewed for The MOON Magazine about “the one-man revolution” and how tax resistance fits in to it.♦

I’ve done a little outreach at local refugee-rights, Women’s March, and other anti-#MAGA events.♦ Mostly I’m very disappointed at how shallow and partisan they are. People seem to relish the opportunity to say how much they disagree with Trump’s policies without having any interest in ending their cooperation with those policies. I’m increasingly sympathetic with the “virtue signalling” explanation for much of this.

The state of the world and the tax resistance movements

Trump is certainly the president America deserves. All of the things that prompted me to turn my back on the government and refuse its demands for help are getting worse day by day. I’m astonished at how willing Americans seem to be to go along with it, or to just indulge in complaining about it, without questioning their loyalty to the system.

I remain hopeful that the empire of the United States will self-destruct under the idiocy and incompetence of its rulers and the narcotic complacency of its subjects. Trump may very well be the last president this country has to suffer through, and if he finally puts a bullet through the skull of this old rabid republic it may not be pleasant, but you can’t say it’s premature.

The IRS continues to be plagued by greater responsibilities but reduced funding, and will take months to recover from the government “shutdown”, making the agency ever less capable and more deserving of contempt.♦ A thriving overseas industry has grown up around impersonating IRS agents in order to shake down Americans over the phone. These and other factors, such as the Trump family’s own notorious evasion of taxpaying, are leading to the collapse of the credibility of the federal tax system. A solid majority of Americans now feel the federal tax system is unfair,♦ and there is hope that the long-standing norm of taxpayer compliance will come to an end.♦

Tax resistance movements

Good-hearted Americans are alarmed and disgusted by Trumpism, and some even allow themselves to consider tax resistance as a response, whether in protest, in nonviolent resistance, or in conscientious objection. As yet, this is largely a simmering chorus of “why we oughta” tweets, but it could yet coalesce into something real. Few people with stature seem to want to lead this parade, though, and those without stature seem to be waiting for a leader to follow, so things are currently stalled. Now that a swarm of Democratic presidential candidates is emerging, I expect most progressive activism to be diverted onto the harmless electoral politics track for the next twenty goddamned months.

The American war tax resistance movement continues to simmer on the back burner, but does not seem to be growing or to be considering any bold initiatives for growth, and has very little influence even in the small American anti-war movement.

Globally, however, tax resistance is more vibrant. Tax resistance in Nicaragua was threatening enough to the regime that it arrested and tortured one of the leaders of the movement.♦ The gilets jaunes movement in France has been extraordinarily powerful, forced the government there to rescind a new tax, and has destroyed about three-quarters of the automated traffic-fine-generating machines in the country.♦

Prospects for the coming year

Assuming no major unexpected expenses or windfalls, and assuming no more big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will again “owe” (and refuse to pay) self-employment tax.

I’ve budgeted for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster.

So on to year seventeen of what no longer seems like an experiment so much as a way of life.

Seventeen years ago, on 19 March 2003, the U.S. attacked Iraq. For me this was the last straw, so I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦ My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this legally by lowering my income below the federal income tax line, so I quit my job to start my own small business and I began taking advantage of additional legal tax deductions and credits. This has turned out to be a successful method of legally avoiding federal income tax, as well as a rewarding way of making a living, and I continue to operate this way today. (Also, as I work from home by default, I’ve been less impacted than many by the recent pandemic measures.)

However, I have been assessed a self-employment tax most of these years (this is different from the income tax but it also goes to the federal government). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply refused to write the check. Because of this I have been accumulating an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is uncollectible due to the statute of limitations) now adds up to something in the neighborhood of $75,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but has been working for me so far.

Over the years, the IRS has on a few occasions levied bank accounts, with some success: They have seized about $6,000 of the total of about $86,000 that I have refused to pay. I don’t have a fail-safe plan to hide my assets, so I expect that the IRS may continue to seize money when they find it, though lately they haven’t shown much enthusiasm for the hunt. They haven’t taken anything at all from me in several years, or even seem to have tried, though they still send me pleading letters from time to time.♦♦♦♦

Their recent lack of action may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts and other crises have caused them to back off on their enforcement).♦ They may also just be biding their time, as the statute of limitations deadline on the oldest remaining unpaid amount doesn’t run out for another month still.

In 2018, the IRS filed a formal tax lien against me in our local court system. They updated that lien last year, and again this year.♦♦ The lien has not yet had any practical effect on my life or my resistance.

Passport Worries

The total amount I owe at this point is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. It took the agency longer than I expected, but they finally submitted this notification.♦ This means that the State Department could revoke my passport at any time, and in any case is not supposed to allow me to renew it when it expires.

My 2019 Federal Tax Resistance

After all the dust settled, it turned out that last year I “owed” and refused to pay $5,631 in federal self-employment tax.

Sustainability

I want to continue to resist taxes over the long term, so it is important (if I want to stick to my below-the-tax-line method) that my expenses remain low enough that my income-tax-free income is sustainable. 2019 was a good year for me income-wise. I brought in more than $39,000 in profit from my business.

However, my expenses have risen somewhat in recent years. Rents in my part of California have been rising fast, and rent now amounts to over 60% of my annual expenses. More than half of the taxable dollars I spend go just to keeping a roof over my head. I didn’t do the sort of close, day-by-day look at my spending as I have done in years past, but as best as I can estimate, my regular expenses for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,525 per month, or over $18,000 a year:

Not included in the above pie chart are any business expenses that I can deduct from my taxable income, most healthcare expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

My transportation budget is very low because where I live it’s pretty easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve been learning to do my own bike repairs and maintenance at the local “bike kitchen,” which also keeps the costs low.

I had a lot of health expenses last year (surgery to have an artificial disc put in my spine), which maxed out the deductible on my high-deductible insurance plan. But because I had been making the maximum tax-free contribution to my Health Savings Account every year, I was able to tap that money to pay for it without having to modify my budget elsewhere. My non-insured health-care expenses are mostly for my tiny Obamacare premium and my YMCA gym membership.

My yearly living expenses take most of my “under the tax line” budget, leaving me about $1,000 in wiggle room for unexpected expenses or splurging. If I were to budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $5,600 or so of expenses, half of which also counts against the under the tax line budget (and would put me over my limit).

My 1040: A walk-through

I haven’t filed my taxes yet, as the IRS still (less than a month from the filing deadline, and a month and a half after the official opening of tax filing season) hasn’t produced all of the necessary forms! But I do my tax returns on a spreadsheet before I fill them out, so I have a pretty good idea of what they’ll look like. Here’s how my 1040 worked out this year. First, my Total Income:

My business income came from two sources: my contract work as a technical writer, and sales of my books.

Now on to my Adjusted Gross Income:

Last year, I put away $14,408 for retirement and $3,500 for future medical spending (or for retirement, if I stay healthy). Together, those savings represent almost 45% of my earned income.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay that tax like I am).

My Adjusted Gross Income is below the $19,250 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit. This is the target I try to hit in order to get my federal income tax down to zero.

Now we go from Adjusted Gross Income to Taxable Income:

In past years there was both a standard deduction and a personal exemption. The last big tax law doubled the standard deduction and eliminated the personal exemption (so in practical terms, for me anyway, changed very little). But the law also added a new 20% Qualified Business Income deduction: 20% of that portion of my income that comes from self-employment (but capped at 20% of what my taxable income would be without the deduction).

This is meant to level the playing field for those of us who are self-employed or run small businesses and declare our business earnings on our personal income tax forms. The last big tax law cut corporate income taxes dramatically, so it was thought that we non-corporate business entities needed a break, too.

But it means that I get a bit of a tax break that my employee-brethren, who are doing much the same sort of work that I’m doing as an independent contractor, don’t qualify for. That doesn’t make a whole lot of sense to me, but it works in my favor. (The law does have a provision that eliminates the credit for service providers like myself, but that provision does not apply until I reach a certain minimum income threshold, which I’m not close to.)

Anyway, from there, my tax owed:

As I usually do, I will file my tax return showing these accurate amounts, but I will not include a check for the tax due.

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it. I’ve also been doing a little one-on-one tax resistance counseling as part of NWTRCC’s network of counselors.

Last year I wrote up “Aristotle’s Guide to Anarchy” in which I tried to imagine how Aristotle might extend his Politics to cover the anarchist polis.

Much of my activism of late has become much less focused on “politics” and on the national/global scale, and much more focused on direct action at the local scale. I’ve been volunteering regularly for the local food bank’s gleaning project at one of our farmers’ markets, doing in-custody programming for people imprisoned at the local jail through a local non-governmental charity, and helping to supervise a mobile shower trailer program serving homeless people in our community. (All of this is much easier for me because of the reduced and more-flexible work hours that are part of my tax resistance, and so can be seen as another form of tax redirection.♦) Alas, all of these programs are now on hold because of the ongoing pandemic.

I’ve also been putting a lot of energy over the past several months into getting a peer-supported personal growth group up and running, one that is inspired by Aristotelean virtue ethics, but I haven’t written up my results here yet. It’s been encouraging, but also slow to build momentum. I hope to have something to share hereabouts before too long.

The state of the world and the tax resistance movements

Trump is certainly the president America deserves. All of the things that prompted me to turn my back on the government and refuse its demands for help are getting worse day by day. I’m astonished at how willing Americans seem to be to go along with it, or to just indulge in complaining about it, without questioning their loyalty to the system.

I remain hopeful that the empire of the United States will self-destruct under the idiocy and incompetence of its rulers and the narcotic complacency of its subjects. Trump may very well be the last president this country has to suffer through, and if he finally puts a bullet through the skull of this old rabid republic it may not be pleasant, but you can’t say it’s premature.

The IRS continues to be troubled by greater responsibilities but reduced funding, making the agency ever less capable and more deserving of contempt.♦♦♦ This and other factors, such as the Trump family’s own notorious evasion of taxpaying, are leading to the collapse of the credibility of the federal tax system, and there is hope that the long-standing norm of taxpayer compliance will come to an end.♦

It’s hard to know at this stage what the effects of the ongoing pandemic and reactions to it will be. Certainly U.S. government revenue will take a big hit. The talk of Trump’s last tax package “paying for itself” through increased prosperity was never very convincing even back when it looked like there was going to be some increased prosperity. And now the politicians are desperate to “stimulate” the economy by injecting money into it and taking less money out of it. However they go about it, this will increase the debt, and the proportion of the budget that goes to service that debt (though plummeting interest rates may soften the blow). I haven’t done the math, or noticed anywhere smarter and better-informed people are doing it for me, and of course there are still many unknowns, but it seems safe to say that the government will likely come out of this in a financially weaker position.

Tax resistance movements

Good-hearted Americans are alarmed and disgusted by Trumpism, and some even allow themselves to consider tax resistance as a response, whether in protest, in nonviolent resistance, or in conscientious objection. As yet, this is largely a simmering chorus of “why we oughta” tweets, but it could yet coalesce into something real. Few people with stature seem to want to lead this parade, though, and those without stature seem to be waiting for a leader to follow, so things are currently stalled. And I expect most progressive activism to be diverted onto the worthless electoral politics track until that travesty is behind us.

The American war tax resistance movement is limping along and only occasionally shows signs of life. Last year the Mennonite Church U.S.A. voted to reinvigorate a war tax resistance redirection fund for its resisters.♦

Globally, however, tax resistance is more vibrant. The gilets jaunes movement in France has been remarkably powerful. It forced the government there to rescind a new tax, and has destroyed about three-quarters of the automated traffic-fine-generating machines in the country.♦ The heartening outbreak of traffic ticket machine destruction spread across Europe and has now claimed thousands of robot bandit victims. Spanish war tax resisters won a legal battle when a court agreed they had no criminal intent and so should not have been subject to criminal charges for their refusal.♦ Nicaraguan tax resistance leader Irlanda Jerez was released from prison and is continuing to agitate from exile.♦ American anti-abortion tax resister Michael Bowman got the courts to concede that it’s no crime to make it less convenient for the IRS to seize your money.♦ Other tax strikes have broken out from Hong Kong to Congo, Lebanon to Pakistan, and I’ve kept on top of them as best I can from this side of the language barrier.

Prospects for the coming year

Assuming no major unexpected expenses or windfalls, and assuming no more big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will likely again “owe” (and refuse to pay) self-employment tax.

I’ve budgeted for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster.

So on to year eighteen of what no longer seems like an experiment so much as a way of life.

Eighteen years ago, on 19 March 2003, the U.S. attacked Iraq. For me this was the last straw, and I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦ My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this entirely legally by lowering my income below the federal income tax line. So I quit my job to start my own small business where I could closely regulate my income, and I began taking advantage of additional legal tax deductions and credits. This has turned out to be a successful method of legally avoiding federal income tax, as well as a rewarding way of making a living, and I continue to operate this way today. (As I work from home by default, I’ve also been less impacted than many by the pandemic measures, so that’s been a nice bonus.)

However, I have been assessed a self-employment tax most of these years (this is different from the income tax but it also goes to the federal government). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply refused to write the check. Because of this I have been accumulating an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is uncollectible due to the statute of limitations) now adds up to something in the neighborhood of $80,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but it has been working for me so far.

Over the years, the IRS has on a few occasions levied my bank accounts, with some success: They seized about $6,200 of the total of about $94,500 that I have refused to pay. I don’t have any fail-safe plan to hide my assets, so the IRS may continue to seize money when they find it, though lately they haven’t shown much enthusiasm for the hunt. They haven’t taken anything at all from me in several years, or even seem to have tried, though they still send me pleading letters from time to time.♦

Their recent lack of action may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts and other crises have caused them to back off on their enforcement).♦ They may also just be biding their time, as the statute of limitations deadline on the oldest remaining unpaid amount doesn’t run out for another month still.

In 2018, the IRS filed a formal tax lien against me in our local court system. They updated that lien each year thereafter.♦♦ The lien has not yet had any practical effect on my life or my resistance; it has so far mostly meant getting a lot of junkmail from companies promising they can settle my tax debt on the cheap. I requested copies of my credit reports this year to see if the tax lien registered there, and to my surprise, there was no mention of it at all.

Last year, when another year of my tax debt become uncollectible due to the statute of limitations, I wrote a check for that amount to the local food bank as a charitable donation, to celebrate.♦

Passport Worries

The total amount I owe at this point is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. It took the agency longer than I expected, but they finally submitted this notification.♦ This means that the State Department could revoke my passport at any time, and in any case is not supposed to allow me to renew it when it expires. So far they have not revoked my passport.

My 2020 Federal Tax Resistance

After all the dust settled, it turned out that last year I “owed” and refused to pay $5,374 in federal self-employment tax.

Sustainability

I want to continue to resist taxes over the long term, so it is important (if I want to stick to my below-the-tax-line method) that my expenses remain low enough that my income-tax-free income is sustainable. 2020 was a good year for me income-wise. I brought in more than $38,000 in profit from my business. On the other hand, my most steady client over the past several years cut me loose, spooked by a new California law that threatens companies who contract out to consultants like myself rather than doing work in-house. So I’m on the hunt for new clients and have not had much income in the past several months. I applied for and received two of the federal government’s Paycheck Protection Program forgiveable loans (and I also got two of the “stimulus” payments, with a third apparently on the way), which helped.♦ It’s a little astonishing that the government is willing to fork over money to a tax scofflaw like me, but I’m not complaining. (This additional money is also not taxable income, so you won’t see it in the accounting below.)

“In fact, I quietly declare war with the State, after my fashion, though I will still make use and get what advantages of her I can, as is usual in such cases.” ―Thoreau, Resistance to Civil Government

My day-to-day expenses stayed pretty steady through most of last year. Rents in my part of California are high, and rent amounts to over 60% of my annual expenses. More than half of the taxable dollars I spend go just to keeping a roof over my head. As best as I can estimate, my regular expenses for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,500 per month, or over $18,000 a year:

Not included in the above pie chart are any business expenses that I can deduct from my taxable income, most healthcare expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

I’ve just finished moving to a new place across town. At my new home many of the utilities are bundled into the rent, whereas before almost none of them were. So I had been spending about $112/month on utilities, and now that’s around $52. This makes it difficult to compare years over time. In different years more or less of my utility budget has been hidden in my rent budget.

My transportation budget is very low because where I live it’s pretty easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve been learning to do my own bike repairs and maintenance at the local “bike kitchen,” which also keeps the costs low.

I had high health expenses last year (ankle surgery), which maxed out the deductible on my high-deductible insurance plan. But because I had been making the maximum tax-free contribution to my Health Savings Account every year, I was able to tap that money to pay for it without having to modify my budget elsewhere. However, high health expenses in the past two years have tapped most of that account, so I no longer have enough in it to meet my deductible. If I’m unlucky enough to have high health expenses again this year, I might have to dip into the rest of my budget to pay for them. But, thank goodness, I managed to stay out of Covid’s clutches until I was able to get vaccinated.

My yearly living expenses take most of my “under the tax line” budget, leaving me about $1,400 in wiggle room for unexpected expenses (this year, moving expenses took a hunk of that) or splurging. This year, with tax-free PPP loans and stimulus payments, I had a lot of extra wiggle room on top of that, but that’s not something I can count on regularly.

If I were to budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect may be seized, that would come to another $5,500 or so of expenses, half of which also counts against the under the tax line budget. I’ve adopted the practice of making charitable donations to match the amount of my back taxes that become uncollectible due to the statute of limitations, but I cannot do that within my budget: I have to dip into savings and may ultimately have to prematurely tap my Roth account if I want to keep that up year after year. If my oldest tax debt is voided by the statute of limitations next month, I hope to write a check for $3,856 to some charity or other to celebrate.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came mostly from two sources: my contract work as a technical writer, and sales of my books. (I also sold a couple of limericks to the Center for a Stateless Society, meaning I can check off “become a professional poet” on my bucket list.)♦

Now on to my Adjusted Gross Income:

Last year, I put away $12,750 for retirement and $3,550 for medical spending. Together, those savings represent a third of my earned income.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay that tax like I am).

My Adjusted Gross Income is below the $19,500 threshold that allows me to get the maximum rate on the Retirement Savings Contributions Credit. This is the target I try to hit in order to get my federal income tax down to zero.

Now we go from Adjusted Gross Income to Taxable Income:

In past years there was both a standard deduction and a personal exemption. The last big tax law doubled the standard deduction and eliminated the personal exemption (so in practical terms, for me anyway, changed very little). But the law also added a new 20% Qualified Business Income deduction: 20% of that portion of my income that comes from self-employment (but capped at 20% of what my taxable income would be without the deduction).

This is meant to level the playing field for those of us who are self-employed or run small businesses and declare our business earnings on our personal income tax forms. The last big tax law cut corporate income taxes dramatically, so it was thought that we non-corporate business entities needed a break, too.

But it means that I get a bit of a tax break that my employee-brethren, who are doing much the same sort of work that I’m doing as an independent contractor, don’t qualify for. That doesn’t make a whole lot of sense to me, but it works in my favor. (The law does have a provision that eliminates the credit for service providers like myself, but that provision does not apply until I reach a certain minimum income threshold, which I’m not close to.)

Anyway, from there, my tax owed:

As I usually do, I will file my tax return showing these accurate amounts, but I will not include a check for the tax due.

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it. I’ve also been doing a little one-on-one tax resistance counseling as part of NWTRCC’s network of counselors.

Last year I researched and wrote the article “Can You Keep War Bonds Out of Your Socially-Responsible Investments?” for American war tax resisters.

I also gave a talk on how tax resistance campaigns succeed by deploying a variety of tactics for the #MoneyRebellion project of the Extinction Rebellion environmental activist group in the U.K.

Much of my activism of late has become much less focused on “politics” on the national/global scale, and much more focused on direct action at the local scale. I’d been volunteering regularly for the local food bank’s gleaning project at one of our farmers’ markets and doing in-custody programming for people imprisoned at the local jail through a local non-governmental charity, but both of those programs went into hibernation during the pandemic. However, I’ve been helping to supervise a mobile shower trailer program serving homeless people in our community, and that’s still going strong. (All of this is much easier for me because of the reduced and more-flexible work hours that are part of my tax resistance, and so can be seen as another form of tax redirection.♦)

I continue to explore virtues-based interventions as ways to improve our political situation:

I think the longer, harder, more subtle project of helping people improve is a more reliable path to a better future than trying to impose wise policies on them from on high. If people become braver, wiser, more just, and more honorable, public policy will follow their lead. If people become more cowardly, foolish, grasping, and disreputable, conniving politicians will lead them by the nose.

To this end, I’ve been doing write-ups on a variety of virtues with the aim of learning what makes them valuable, how they interact, and, most importantly, how to go about becoming more skillful in practicing them.

The state of the world and the tax resistance movements

Trump was certainly the president America deserves, and, without taking anything away from him in the evil-and-incompetent department, I’ve got to give him kudos for doing more to discredit and damage the U.S. government than I could do in my wildest dreams.

The IRS continues to be troubled by greater responsibilities but reduced funding, compounded by the difficulties the pandemic has caused for everyone, making the agency ever less capable and more deserving of contempt.♦ The agency put nearly all of its enforcement processes on hold for months, and still hasn’t really gotten back up to what-passed-for-speed.♦ These and other factors, such as the Trump family’s own notorious evasion of taxpaying, are leading to the collapse of the credibility of the federal tax system, and there is hope that the long-standing norm of taxpayer compliance will come to an end.

Tax resistance movements

Good-hearted Americans were alarmed and disgusted by Trumpery, but hardly any were willing to actually resist it in ways more vigorous than voting or complaining. These days I hear threats of civil disobedience and tax resistance coming from the crazy Trumpist cult of personality more than from the left — though still, it’s only noise so far and may just amount to letting off steam the same way the #Resistance twitter-toyed with the idea of tax refusal without being willing to commit. In a way, though, I think it would be hilarious if after four years of listening to progressives wring their hands about Trump being the Next Hitler™, we finally see a grassroots resistance campaign emerge from the fantasy Qniverse of the increasingly unhinged American right-wing in response to… supervillain Joe Biden, the hapless, middle-of-the-road empty suit who promises to make evil banal again.

The American war tax resistance movement is limping along and only occasionally shows signs of life. Globally, however, tax resistance is more vibrant. For example, the gilets jaunes movement in France was inspirational, and the impetus it gave to the grassroots campaign of destroying roadside tax machinery — not just in France, but across Europe and indeed around the world — has been a weirdly-neglected story of mass noncompliance and successful direct action.♦

Prospects for the coming year

Assuming no major unexpected expenses or windfalls, and assuming no more big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will likely again “owe” (and refuse to pay) self-employment tax.

I’ve prepared for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster. And, if they fail again, I’m also prepared to dip into my savings to give to charity in celebration.

So on to year nineteen of what no longer seems like an experiment so much as a way of life.

Nineteen years ago, on 19 March 2003, the U.S. attacked Iraq. It was a foolish, brutal, aggressive war launched on dishonest pretenses that had disastrous results. Back then America was mostly okay with that sort of thing. For me, though, it was the last straw, and I started what I then called “an experiment” in tax resistance so that I would no longer feel as complicit.♦ My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this entirely legally by lowering my income below the federal income tax line. So I quit my job to start my own small business where I could closely regulate my income, and I began taking advantage of additional legal tax deductions and credits. This has turned out to be a successful method of legally avoiding federal income tax, as well as a rewarding way of making a living, and I continue to operate this way today. (As I work from home by default, I’ve also been less impacted than many by the pandemic measures, so that’s been a nice bonus.)

However, I have been assessed a self-employment tax most of these years (this is different from the income tax but it also goes to the federal government). In 2006 I decided to stop paying this tax as well. I have not found a useful way to do this legally, and so I have simply refused to write the check. Because of this I have been accumulating an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is uncollectible due to the statute of limitations) now adds up to something in the neighborhood of $83,600.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but it has been working for me so far.

Over the years, the IRS has on a few occasions levied my bank accounts, with some success: They seized about $6,200 of the total of about $105,000 that I have refused to pay. I don’t have any fail-safe plan to hide my assets, so the IRS may continue to seize money when they find it, though lately they haven’t shown much enthusiasm for the hunt. They haven’t taken anything at all from me for over a decade, or even seem to have tried, though they still send me pleading letters from time to time.♦

Their recent lack of action may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder (budget cuts and other crises have caused them to back off on their enforcement).♦♦ They may also just be biding their time, as the statute of limitations deadline on the oldest remaining unpaid amount doesn’t run out for another month still.

In 2018, the IRS filed a formal tax lien against me in our local court system. They updated that lien periodically thereafter.♦♦ The lien has not yet had any practical effect on my life or my resistance; it has so far mostly meant getting a lot of junkmail from companies promising they can settle my tax debt on the cheap.♦ The lien doesn’t even register on my credit report, which I found surprising.

Last year, when another year of my tax debt became uncollectible due to the statute of limitations, I wrote a check for that amount to the Maximum Impact Fund run by the effective altruism group GiveWell as a charitable donation, to celebrate.♦ I hope to do something of this sort again in a month or two when another year’s taxes are likely to become uncollectible in the same way.

Passport Worries

The total amount I owe at this point is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. It took the agency longer than I expected, but they finally submitted this notification.♦ This means that the State Department could revoke my passport at any time, and in any case is not supposed to allow me to renew it when it expires. So far they have not revoked my passport.

My 2021 Federal Tax Resistance

After all the dust settled, it turned out that last year I “owed” and refused to pay $5,396 in federal taxes.

Sustainability

I want to continue to resist taxes over the long term, so it is important (if I want to stick to my below-the-tax-line method) that my expenses remain low enough that my income-tax-free income is sustainable. 2021 was a good year for me income-wise. I brought in more than $36,000 in profit from my business.

My day-to-day expenses stayed pretty steady last year. Rents in my part of California are high, and rent amounts to over 60% of my annual expenses. More than half of the taxable dollars I spend go just to keeping a roof over my head. As best as I can estimate, my regular expenses for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,565 per month, or about $18,775 a year:

Not included in the above pie chart are any business expenses that I can deduct from my taxable income, most healthcare expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

I now rent an apartment at which many of the utilities are bundled into the rent. This makes it difficult to compare expenses over time, as in some years the utilities were a significant distinct line-item.

My transportation budget is very low because where I live it’s pretty easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I had to replace most of the worn-out drive train on my bike this year, but even that ended up costing less than a tank of gas, so even when biking is expensive it’s cheap. I’ve also been learning to do my own minor bike repairs and maintenance at the local “bike kitchen,” which keeps my costs even lower.

My health expenses were low last year, so I didn’t have to dip too far into my Health Savings Account. Now it’s replenished enough to more or less cover my deductible in case I run into bad health luck.

My yearly living expenses take most of my “under the tax line” budget, leaving me about $1,000 in wiggle room for unexpected expenses or splurging. Last year, with all of those tax-free forgiveable PPP loans and government stimulus payments and such, I had a lot of extra wiggle room on top of that, but that’s not something I can count on regularly.

If I were to budget-in the imposed self-employment tax, which I don’t intend to voluntarily pay, but which I expect could be seized from me, that would come to another $5,200 or so of expenses, half of which also counts against the under the tax line budget. Even if that never comes to pass, though, I’ve adopted the practice of making charitable donations to match the amount of my back taxes that become uncollectible due to the statute of limitations. I can’t do that within my budget, though: I have to dip into savings and I may ultimately have to prematurely tap my Roth account if I want to keep that up year after year. If my oldest tax debt is voided by the statute of limitations next month, I hope to write a check for $4,031 to some charity or other to celebrate.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My business income came mostly from two sources: my contract work as a technical writer, and sales of my books.

My IRA “distribution” was really a rollover from my traditional IRA into my Roth IRA. By making this rollover, I shield that money from future taxation, but am taxed on it today instead. I hoped that I could roll over that amount and still remain under the income tax line, so my tax rate on that money today would be zero, but I miscalculated slightly.

Now on to my Adjusted Gross Income:

Last year, I put away $13,997 for retirement and $3,600 for medical spending. Together, those savings represent more than 47% of my earned income.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This is just silly accounting for the most part, but it does mean that the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay that tax like I am).

Because of a misestimation on my part, my Adjusted Gross Income failed to drop below the $19,750 threshold that would have allowed me to get the maximum rate on the Retirement Savings Contributions Credit. That is the target I try to hit in order to get my federal income tax down to zero.

Now we go from Adjusted Gross Income to Taxable Income:

In past years there was both a standard deduction and a personal exemption. The last big tax law doubled the standard deduction and eliminated the personal exemption (so in practical terms, for me anyway, changed very little). But the law also added a new 20% Qualified Business Income deduction: 20% of that portion of my income that comes from self-employment (but capped at 20% of what my taxable income would be without the deduction).

This is meant to level the playing field for those of us who are self-employed or run small businesses and declare our business earnings on our personal income tax forms. The last big tax law cut corporate income taxes dramatically, so it was thought that we non-corporate business entities needed a break, too.

But it means that I get a bit of a tax break that my employee-brethren, who are doing much the same sort of work that I’m doing as an independent contractor, don’t qualify for. That doesn’t make a whole lot of sense to me, but it works in my favor. (The law does have a provision that eliminates the credit for service providers like myself, but that provision does not apply until I reach a certain minimum income threshold, which I’m not close to.)

Anyway, from there, my tax owed:

I’m a little disappointed about not completely eliminating my income tax this year, but a foot-fault like this doesn’t make much difference: it’s the total tax that matters, and that’s more-or-less in line with my typical year, and I don’t plan to pay it in any case. I filed my tax return showing these accurate amounts, but did not include a check for the tax due.

Other Goals

I hope to encourage people to resist taxes and I try to make The Picket Line a good resource for people who are resisting or considering it. I’ve also been doing a little one-on-one tax resistance counseling as part of NWTRCC’s network of counselors.

But I’ve been much less active than usual on this front. I didn’t publish any new articles or record any new seminars. I haven’t been particularly active in the national or international war tax resistance network. However I was happy to see that the Edmonton Incinerator tax resisters drew on my work to produce their council tax strike handbook.♦

Much of my activism of late has become much less focused on “politics” and “protest” on the national/global scale, and much more focused on direct action at the local scale. I’ve been volunteering regularly for the local food bank’s gleaning project at one of our farmers’ markets, bringing thousands of pounds of fresh produce to a food pantry to give to hungry families. And I’ve been supervising volunteers at a mobile shower trailer program serving homeless people in our community three times a week. (All of this is much easier for me because of the reduced and more-flexible work hours that are part of my tax resistance, and so can be seen as another form of tax redirection.♦)

I’ve also been working on a sequence of articles examining the virtues and how to improve in their practice, and I see this as a political as well as personal effort:

I think the longer, harder, more subtle project of helping people improve is a more reliable path to a better future than trying to impose wise policies on them from on high. If people become braver, wiser, more just, and more honorable, public policy will follow their lead. If people become more cowardly, foolish, grasping, and disreputable, conniving politicians will lead them by the nose.

The state of the world and the tax resistance movements

The IRS continues to be troubled by greater responsibilities but reduced funding, compounded by the difficulties the pandemic has caused for everyone, making the agency ever less capable and more deserving of contempt.♦ The agency put nearly all of its enforcement processes on hold for months, and still hasn’t gotten back up to what-passed-for-speed, with the agency still sitting on millions of unprocessed forms that have been languishing for months even as the paperwork from a new tax season begins to pour in.♦ These and other factors, such as the increasingly notorious evasion of taxpaying by America’s wealthy, are leading to the collapse of the credibility of the federal tax system, and there is hope that the long-standing norm of taxpayer compliance will come to an end.

Tax resistance movements

The American war tax resistance movement is limping along and only occasionally shows signs of life. Globally, however, tax resistance is more vibrant. For example, opponents of the military coup in Myanmar are braving an increasingly violent crackdown to refuse funding to the regime.♦ And opponents of the Edmonton incinerator have enlisted dozens of tax resisters in their campaign.♦

Prospects for the coming year

Assuming no major unexpected expenses or windfalls, and assuming no more big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line in the coming year, though I will likely again “owe” (and refuse to pay) self-employment tax.

I’ve prepared for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster. And, if they fail again, I’m also prepared to dip into my savings to give to charity in celebration.

So on to year twenty of what no longer seems like an experiment so much as a way of life.

Twenty years ago, on 19 March 2003, the U.S. attacked Iraq. It was a foolish, brutal, aggressive war, launched on dishonest pretenses, that had disastrous results. For me it was the last straw, and I started what I then called “an experiment” in tax resistance so that I might no longer feel as complicit.♦ My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this entirely legally by lowering my income below the federal income tax line. I quit my job to start my own small consulting business in which I could closely regulate my income, and I started taking advantage of additional legal tax deductions and credits, while also attending more to frugality. This turned out to be a successful method to legally avoid federal income tax, as well as a rewarding way to make a living, and I continue to operate this way today.

However, I have been liable for self-employment tax most years (this is different from the income tax but also goes to the federal government). In 2006 I decided to stop paying that tax as well. I have not found a useful way to do this legally, so I simply refuse to write the check. Because of this I have accumulated an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is now uncollectible due to the statute of limitations) now adds up to something in the neighborhood of $89,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but works for me.

Several years ago, the IRS levied my bank accounts and seized about $6,200 of the total of about $117,600 that I have refused to pay. I don’t have any fail-safe plan to hide my assets, so the IRS could continue to seize money when they find it. However they haven’t taken anything from me for over a decade, or even seem to have tried, though they still send me pleading letters from time to time.♦ This lack of enforcement may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder. (Budget cuts and other crises have made the agency something of a paper tiger, though a recent budget boost for the agency may wake up the sleeping beast.) They may also just be biding their time, as the statute of limitations deadline on the oldest remaining unpaid amount doesn’t run out for another month still.

In 2018, the IRS filed a formal tax lien against me in our local court system. They updated that lien in each of the following two years, but since then they seem to have stopped doing so.♦♦ The lien did not have any practical effect on my life or my resistance; it mostly meant getting junkmail from companies promising they could settle my tax debt for pennies on the dollar.♦ The lien didn’t even register on my credit report, which I found surprising.

The total amount I owe at this point is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. It took the agency longer than I expected, but they eventually submitted this notification a few years back.♦ This means that the State Department could revoke my passport at any time, and in any case is not supposed to allow me to renew it when it expires. So far they have not revoked my passport.

Last year, when another year of my tax debt became uncollectible due to the statute of limitations, I wrote a check for that amount to the Maximum Impact Fund (now called the “Top Charities Fund”) run by the effective altruism group GiveWell, as a charitable donation to celebrate.♦ I hope to do something of this sort again in a month or two when another year’s taxes seem likely to become uncollectible in the same way.

My 2022 Federal Tax Resistance

After all the dust settled, it turned out that last year I “owed” and refused to pay $5,793 in federal taxes.

Sustainability

I want to continue to resist taxes for the long term, so it is important (if I want to stick to my below-the-tax-line method) that my expenses remain low enough that my income-tax-free income is sustainable. 2022 was a good year for me income-wise. I brought in about $41,000 in profit from my business.

My day-to-day expenses rose last year, thanks to inflation and such. Rents in my part of California are high, and rent amounts to nearly 60% of my annual expenses. As best as I can estimate, my regular costs for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,850 per month, or about $22,200 a year:

Not included in the above pie chart are any business expenses that I can deduct from my taxable income, most healthcare expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I’m saving for retirement (which I do in tax-deferred accounts).

I now rent an apartment at which many of the utilities are bundled into the rent. This makes it difficult to compare expenses over time, as in some past years utilities were a more significant distinct line-item.

My transportation budget is very low because where I live it’s easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve also been learning to do my own minor bike repairs and maintenance at the local “bike kitchen,” which keeps my costs even lower.

My health expenses were low last year, so I didn’t have to dip far into my Health Savings Account. Now it’s replenished enough to more than cover my deductible in case I run into bad health luck.

My yearly living expenses take up all of my “under the tax line” budget, but I’ve got enough squirreled away in savings now that I don’t feel like I’m cutting things too close for comfort.

However, if I were to budget-in the imposed self-employment tax (which I don’t intend to voluntarily pay, but which I expect could be seized from me), that would come to another $5,800 or so of expenses, half of which also counts against my under-the-tax-line budget. And even if the government never gets its hands on that money, I’ve adopted the practice of making charitable donations to match the amount of my back taxes that become uncollectible due to the statute of limitations. For example, if my oldest tax debt is voided by the statute of limitations next month, I hope to write a check for $4,384 to some charity or other to celebrate. I can’t do that within my budget: I have to dip into savings, and I may ultimately have to prematurely tap my Roth IRA if I want to keep that up year after year.

My 1040: A walk-through

Here’s how my 1040 worked out this year. First, my Total Income:

My total income is all business income, which came mostly from two sources: my contract work as a technical writer, and sales of my books.

Now on to my Adjusted Gross Income:

Last year, I put away $14,525 for retirement and $3,650 for medical spending. Together, those savings represent more than 35% of my income.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This means the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay, like I am).

My Adjusted Gross Income is below the $20,500 threshold at which I get the maximum rate on the Retirement Savings Contributions Credit. That is the target I try to hit in order to get my federal income tax down to zero.

Now we go from Adjusted Gross Income to Taxable Income:

The last big tax law added a 20% Qualified Business Income deduction: 20% of that portion of my income that comes from self-employment (but capped at 20% of what my taxable income would be without the deduction). This levels the playing field for people who declare business earnings on their personal income tax forms: The last big tax law cut corporate income taxes dramatically, so it was thought that we non-corporate business entities deserved a similar break. (The law has a provision that eliminates the credit for service providers like myself, but that provision does not apply until I reach a minimum income threshold, which I’m not close to.)

Anyway, from there, my tax owed:

I plan to file a tax return that shows these accurate amounts, but I will not include a check for the tax due.

Other Goals

I would like to encourage other people to resist taxes too, and I have tried to make The Picket Line a good resource for people who are resisting or considering it. But I’ve been much less active than usual on this front. I didn’t publish any new articles or record any new seminars. I haven’t been particularly active in the national or international war tax resistance network. I haven’t done any consulting for the various tax-resistance-adjacent campaigns that erupt around the world from time to time.

I’ve gotten a little tired of being a tax resistance scholar and activist, and feel like I’d rather decenter tax resistance in my life, make it more incidental, and occupy myself more with other pastimes. I read something recently that introduced me to the concept of vānaprastha — a sort of mellow midlife metamorphosis in which it seems appropriate to step back a bit from worldly concerns (as the rising generation begins to screw things up anew in their own special way) and devote yourself instead to community service, transcendental exploration, and occasional gentle emissions of avuncular wisdom. I thought, “yeah, that kinda sounds like my mood these days.” I remember turning my back on political activism at some point in my twenties — driven not by vānaprastha but by a prematurely world-weary cynicism verging on nihilism with hedonism as a backstop — and I remember also eventually coming to regret that and to dive back into an activist life more earnestly in my thirties and forties. I don’t feel like I’m making the same mistake now, but I can’t be sure it isn’t just a slightly different mistake of the same basic sort. But I think for the time being I’ll step back from making tax resistance my “beat” (though I don’t intend to relax my stance of not paying).

Much of my “activism” of late is much less focused on politics and protest and rebellion, particularly on the national/global scale, and much more focused on embarrassingly wholesome direct action at the local scale. I’ve been volunteering regularly for the local food bank’s gleaning project at one of our farmers’ markets, bringing thousands of pounds of fresh produce to a food pantry to give to hungry families. And I’ve been supervising volunteers at a mobile shower trailer program that serves homeless people in our community several times a week. (All of this is much easier for me because of the reduced and more-flexible work hours that are part of my tax resistance, and so can be seen as another form of tax redirection.♦)

I’ve also been working on a sequence of essays examining the virtues and how to improve in their practice — that’s the “occasional gentle emissions of avuncular wisdom” part of my metamorphosis, I guess — and I see this as a political as well as personal effort:

I think the longer, harder, more subtle project of helping people improve is a more reliable path to a better future than trying to impose wise policies on them from on high. If people become braver, wiser, more just, and more honorable, public policy will follow their lead. If people become more cowardly, foolish, grasping, and disreputable, conniving politicians will lead them by the nose.

Prospects for the coming year

Assuming no major unexpected expenses or windfalls, and assuming no more big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line again in the coming year, though I will likely again “owe” (and refuse to pay) self-employment tax.

I’ve prepared for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster. And, if they fail again, I’m also prepared to dip into my savings to give to charity in celebration.

So on to year twenty-one of what no longer seems like an experiment so much as a way of life.

Twenty-one years ago, on 19 March 2003, the U.S. attacked Iraq. It was the beginning of a foolish, brutal, aggressive war, launched on dishonest pretenses, that had disastrous results. For me it was the last straw, and I started what I then called “an experiment” in tax resistance so that I might no longer feel as complicit.♦ My goal was to stop financially supporting the U.S. government.

Tax Resistance

I hoped at first to do this entirely legally by lowering my income below the federal income tax line. I quit my job to start a one-person consulting business in which I could closely regulate my income, and I started taking advantage of additional legal tax deductions and credits, while also attending more to frugality. This turned out to be a successful method to legally avoid federal income tax, as well as a rewarding way to make a living, and I continue to operate this way today.

However, I have been liable for self-employment tax in most years (this is different from the income tax but also goes to the federal government). In 2006 I decided to stop paying that tax as well. I have not found a useful way to do this legally, so I simply refuse to write the check. Because of this I have accumulated an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is now uncollectible due to the statute of limitations) now adds up to something in the neighborhood of $90,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but works for me.

Several years ago, the IRS levied my bank accounts and seized about $6,200 of the total of about $127,000 that I have refused to pay. I don’t have any fail-safe plan to hide my assets, so the IRS could continue to seize money when they find it. However they haven’t taken anything from me for over a decade, or even seem to have tried, though they still send me pleading letters from time to time.♦ This lack of enforcement may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder. (Budget cuts and other crises have made the agency something of a paper tiger, though a recent budget boost for the agency may wake up the sleeping beast.) They may also just be biding their time, as the statute of limitations deadline on the oldest remaining unpaid amount doesn’t run out for another month still.

In 2018, the IRS filed a formal tax lien against me in our local court system. They updated that lien in each of the following two years, but since then they seem to have stopped doing so.♦♦ The lien did not have any practical effect on my life or my resistance; it mostly meant getting junkmail from shady companies promising they could settle my tax debt for pennies on the dollar.♦ The lien didn’t even register on my credit report, which I found surprising.

The total amount I owe at this point is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. It took the agency longer than I expected, but they eventually submitted this notification a few years back.♦ This means that the State Department could revoke my passport at any time, and in any case is not supposed to allow me to renew it when it expires in 2028. So far they have not revoked my passport.

Last year, when another year of my tax debt became uncollectible due to the statute of limitations, I wrote a check for that amount to the Maximum Impact Fund (now called the “Top Charities Fund”) run by the effective altruism group GiveWell, as a charitable donation to celebrate.♦ I hope to do something similar in a month or two when another year’s taxes seem likely to become uncollectible in the same way, though I will need to pick a new destination for the donation (see below).

My 2023 Federal Tax Resistance

After all the dust settled, it turned out that last year I “owed” and refused to pay $6,473 in federal taxes. (This amount, and the other tax amounts in this report, are estimates; the IRS has been unusually late in getting its tax forms printed and delivered, so I haven’t filed yet.)

Sustainability

I want to continue to resist taxes for the long term, so it is important (if I want to stick to my below-the-tax-line method) that my expenses remain low enough that my income-tax-free income is sustainable. 2023 was a good year for me income-wise. I brought in over $45,000 in profit from my business.

My day-to-day expenses rose last year, thanks to inflation and such. Rents in my part of California are high, and rent amounts to nearly 60% of my annual expenses. As best as I can estimate, my regular costs for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,900 per month, or $23,000 a year:

Not included in the above pie chart are any business expenses that I can deduct from my taxable income, most healthcare expenses (which I pay from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I put aside for retirement (which I typically do in tax-deferred accounts).

I now rent an apartment at which many of the utilities are bundled into the rent. This makes it difficult to compare expenses over time, as in some past years utilities were a more significant distinct line-item.

My transportation budget is very low because where I live it’s easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve also been learning to do my own minor bike repairs and maintenance at the local “bike kitchen,” which keeps my costs even lower.

My health expenses were low last year, so I didn’t have to dip far into my Health Savings Account. It’s replenished enough to more than cover my deductible in case I run into bad health luck.

My yearly living expenses take up all of my “under the tax line” budget, but I’ve got enough squirreled away in savings now that I don’t feel like I’m cutting things too close for comfort.

However, if I were to budget-in the imposed self-employment tax (which I don’t intend to voluntarily pay, but which I expect could be seized from me), that would come to another $6,475 or so of expenses, half of which also counts against my under-the-tax-line budget. And even if the government never gets its hands on that money, I’ve adopted the practice of making charitable donations to match the amount of my back taxes that become uncollectible due to the statute of limitations. For example, if my oldest tax debt is voided by the statute of limitations next month, I hope to write a check for $5,932 to some charity to celebrate. I can’t do that within my budget: I have to dip into savings, and I may ultimately have to prematurely tap my Roth IRA if I want to keep that up year after year.

My 1040: A walk-through

Here’s how I expect my 1040 will work out this year. First, my Total Income:

My total income is all business income, which came mostly from two sources: my contract work as a technical writer, and sales of my books.

Now on to my Adjusted Gross Income:

Last year, I put away $16,000 for retirement and $4,850 for medical spending. Together, those savings represent more than 45% of my income.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This means the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay, like I am).

My Adjusted Gross Income is just below the $21,750 threshold at which I get the maximum rate on the Retirement Savings Contributions Credit. That is the target I try to hit in order to get my federal income tax down to zero.

Now we go from Adjusted Gross Income to Taxable Income:

The Qualified Business Income deduction is 20% of that portion of my income that comes from self-employment, capped at 20% of what my taxable income would be without the deduction. The last big tax law cut corporate income taxes dramatically, and this deduction was meant to give a similar break to non-corporate business entities (like me) who declare business earnings on our personal income tax forms. It doesn’t really matter to the bottom line of how much I owe but I include it here for completeness.

Anyway, from there, my tax owed:

I plan to file a tax return that shows these accurate amounts, but I will not include a check for the tax due.

Other Goals

I would like to encourage other people to resist taxes too, and I have tried to make The Picket Line a good resource for people who are resisting or considering it. But I’ve been much less active than usual on this front. Last year I stepped back from the blog and stopped creating new content for it. I’d gotten a little tired of being a tax resistance scholar and activist, and felt like decentering tax resistance in my life, to make it more incidental, and to occupy myself more with other pastimes.

Much of my “activism” of late is much less focused on politics and protest and rebellion, particularly on the national/global scale, and much more focused on embarrassingly wholesome direct action at the local scale. I’ve been volunteering regularly for the local food bank’s gleaning project at one of our farmers’ markets, bringing thousands of pounds of fresh produce to a food pantry to give to hungry families. And I’ve been supervising volunteers at a mobile shower trailer program that serves homeless people in our community several times a week. (All of this is much easier for me because of the reduced and more-flexible work hours that are part of my tax resistance, and so can be seen as another form of tax redirection.♦)

However, I did write a post for the LessWrong site called “Redirecting one’s own taxes as an effective altruism method”. And that turned out to be an interesting experience.

LessWrong is a sort of group blog / discussion forum for people in a loosely-defined on-line “rationalist” community. The core ethos of the community is to try to think and communicate more carefully and clearly, and to live more effectively and efficiently. But topics range all over the place. Lately, there’s a great deal of discussion over the prospects of artificial intelligence, for example.

“Effective altruism” has been another frequent topic of discussion there. That’s what I used as the hook for my post. I framed tax redirection as a possible variety of effective altruism and tried to explain its promise and its challenges when seen from that point of view. I explained that in recent years I had been redirecting my federal taxes through the effective altruism charity GiveWell, and explained how readers might do something similar themselves.

The post got much more attention than I thought it would. This was in part because the popular blogger Scott Alexander linked to it on his blog. Opinion was vigorously divided (as of this writing, my post has gotten 89 “votes” with an exactly equal number of up-votes and down-votes).

Another factor that explains the heat of the controversy is that the effective altruism movement was in something of an optics crisis at the time. Disgraced crypto entrepreneur Sam Bankman-Fried had just been convicted of fraud and conspiracy. Bankman-Fried had been a big booster of and donor to the effective altruism movement, and his chicanery left a stain. It looked as though he had been using promises to dedicate his wealth to effective altruism as a fig leaf to hide his embarrassing criminal shenanigans behind. Nay-sayers were eagerly tarring the effective altruism movement with that convenient brush. The effective altruism movement reeled and was in the middle of a lot of hand-wringing about optics and ethics, and then I turned up, encouraging people to dodge their taxes in the cause. To a lot of them, it was just the sort of thing they didn’t want connected with the effective altruism message, especially just then.

GiveWell went so far as to convene a policy discussion on whether to accept redirected taxes as donations, and they decided not to do so. They then reached out to me and basically said “stop giving us your money”:

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.

On the one hand, this was disappointing. Sure, it would have been nicer if GiveWell had endorsed my action, or if the effective altruism community had rallied around it. But that was never very likely, and certainly not at a time when effective altruism boosters were desperately trying to look squeaky-clean. On the other hand, the timing of my post was key to its impact. It was discussed more broadly and more seriously than I anticipated. As a result, it seeded the idea of tax redirection in the minds of people other than the usual suspects of conscientious objectors and political activists.

I’ve also been continuing my work on a sequence of essays examining the virtues and how to improve in their practice.

Prospects for the coming year

I maybe picked a bad time to go into semi-retirement as a tax resistance promoter. The National War Tax Resistance Coordinating Committee has noted a significant surge of interest in war tax resistance in recent months, mostly thanks to the war in Gaza. I’ve gotten more than the usual number of questions and requests for consultations from beginning resisters as well, which I’ve fielded as best I can, though I’m starting to get rusty.

Assuming no major unexpected expenses or windfalls, and assuming no more big changes to the tax law, I’m well-positioned to live comfortably and well under the income tax line again in the coming year, though I will again “owe” (and refuse to pay) self-employment tax.

I’ve prepared for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster. And, if they fail again, I’m also prepared to dip into my savings to give to charity in celebration.

So on to year twenty-two of my “experiment.”

Twenty-two years ago, on 19 March 2003, the U.S. attacked Iraq. This began a foolish, brutal, aggressive war, launched on dishonest pretenses, with disastrous results. For me it was the last straw, and I started what I then called “an experiment” in tax resistance so that I might no longer feel as complicit.♦ My goal was to stop financially supporting the U.S. government.

Tax Resistance

At first I hoped to do this entirely legally by lowering my income below the federal income tax line. I quit my job to start a one-man consulting business in which I could regulate my income, and I took advantage of legal tax deductions and credits, while also attending to frugality. This turned out to be a successful way to legally avoid federal income tax, as well as a rewarding way to make a living, and I continue to operate this way today.

However, I have been liable for self-employment tax in most years (this is different from the income tax but also goes to the federal government). In 2006 I decided to stop paying that tax as well. I have not found a useful way to do this legally, so I simply refuse to send a check. As a result I have accumulated an unpaid tax bill which, along with penalties & interest added by the IRS (minus a bit that they’ve managed to seize from me over the years, and some that is now uncollectible due to the statute of limitations), now adds up to something in the neighborhood of $94,000.

My two-track strategy of legally avoiding income tax while non-legally refusing to pay self-employment tax is somewhat awkward to explain, but works for me.

Many years ago, the IRS levied my bank accounts and seized about $6,200 of the total of about $142,000 that I have refused to pay. I don’t have any fail-safe plan to hide assets, so the IRS could continue to seize money when they find it. However they haven’t taken anything from me for over a decade, or even seem to have tried very hard, though they still send me pleading letters from time to time. This lack of enforcement may mean they’ve run out of easy seizure targets, or it may mean my overdue amount falls under the threshold at which they start trying harder. (Years of budget cuts and other crises have made the agency something of a paper tiger, and as the agency seems to be first in line for DOGE firings and other such trumpery, I suspect this will continue to be the case.)

In 2018, the IRS filed a formal tax lien against me in my local court system. They updated that lien in each of the following two years, stopped for a while, and then reestablished the lien some time last year. The lien has not had any practical effect on my life or my tax resistance. The only effect I have noticed so far is junkmail from shady companies promising they can settle my tax debt for pennies on the dollar (the lien is a public document, so these companies use lien filings to target their sales pitches).♦ The lien didn’t even register on my credit report, which I found surprising.

The total amount I owe is well over the threshold at which the IRS is supposed to notify the State Department that I ought to be forbidden a passport and perhaps ought to have my passport revoked. It took the agency longer than I expected, but they eventually submitted such a notification in 2019.♦ This means that the State Department could revoke my passport at any time, and in any case is not supposed to allow me to renew it when it expires in 2028. So far they have not revoked my passport. Indeed I took a long overseas vacation last year and didn’t experience any passport-related hassles.

Last May, when another year of my tax debt became uncollectible due to the statute of limitations, I wrote a check for that amount to Charity Entrepreneurship, as a charitable donation to celebrate. Charity Entrepreneurship is a group that mentors and gives seed funding to aspiring founders of high-impact nonprofits to help them succeed. I hope to make a similar donation in a couple of months when another year’s taxes seem likely to become uncollectible in the same way.

My 2024 Federal Tax Resistance

After all the dust settled, last year I “owed” and refused to pay $6,309 in federal taxes.

Sustainability

I want to continue to resist taxes for the long term, so it is important (if I want to stick to my below-the-tax-line method) that my expenses remain low enough that my income-tax-free income is sustainable. In 2024 I brought in almost $45,000 in profit from my business. My day-to-day expenses rose, thanks to inflation and such. Rents in my part of California are high, and rent amounts to nearly 60% of my annual taxable expenses. As best as I can estimate, my regular costs for things like rent, utilities, food, and transportation that I must pay for out of below-the-tax-line income came to about $1,950 per month, or $23,400 a year:

Not included in the above pie chart are any business expenses that I can deduct from my taxable income, most healthcare expenses (which I can pay for from my pre-tax Health Savings Account), my self-employment tax assessment (half of which I can deduct), or money I put aside for retirement (which I typically do in tax-deferred accounts). I also didn’t include my vacation spending splurge, which I’d been saving up for and think of as extra-budgetary.

I now rent an apartment at which many of the utilities are bundled into the rent. This makes it difficult to compare expenses over time, as in some past years utilities were a more significant distinct line-item.

My transportation budget is very low because where I live it’s easy to get around on bike and so I don’t own a motor vehicle and rarely need to use one. I’ve also been learning to do my own bike repairs and maintenance at the local “bike kitchen,” which keeps my costs even lower.

My health expenses were low last year, so I didn’t have to dip far into my Health Savings Account. It’s replenished enough to more than cover my deductible in case I run into bad health luck. I use it more as an additional retirement savings vehicle than for health expenses these days.

My yearly living expenses take up pretty much all of my “under the tax line” budget, but I’ve got enough squirreled away in savings now that I don’t feel like I’m cutting things too close for comfort.

However, if I were to budget-in the imposed self-employment tax (which I don’t intend to voluntarily pay, but which could be seized from me), that would come to another $6,300 or so of expenses, half of which also counts against my under-the-tax-line budget. And even if the government never gets its hands on that money, I’ve adopted the practice of making charitable donations to match the amount of my back taxes that become uncollectible due to the statute of limitations. For example, if my oldest tax debt is voided by the statute of limitations next month, I hope to write a check for $5,536 to some charity to celebrate. I can’t do that within my budget: I have to dip into savings, and I may ultimately have to tap my Roth IRA if I want to keep that up year after year.

My 1040: A walk-through

Here’s how I expect my 1040 will work out this year. First, my Total Income:

My total income is all business income, which came from two sources: my consulting work as a technical writer, and sales of my books. I had been expecting slightly more income, but a late check from a client got lost in the holiday mail and so will be applied to this year’s income instead.

Now on to my Adjusted Gross Income:

Last year, I put away $16,299 for retirement and another $5,150 for either current medical spending or for retirement. Together, those savings represent more than 48% of my income.

The self-employment tax deduction works like this: When you work for someone else, your employer pays half of your FICA and the other half comes out of your paycheck. This means the half paid by your employer doesn’t count as your income and so you don’t pay income tax on it. If you’re self-employed, you pay both halves of the tax, so the IRS lets you take half (roughly) of your self-employment tax as an income tax deduction to even things out (even if you’re refusing to pay, like I am).

My Adjusted Gross Income is well below the $23,000 threshold at which I get the maximum rate on the Retirement Savings Contributions Credit. That is the target I try to hit in order to get my federal income tax down to zero.

Now we go from Adjusted Gross Income to Taxable Income:

The Qualified Business Income deduction is 20% of that portion of my income that comes from self-employment, capped at 20% of what my taxable income would be without the deduction. The first Trump administration cut corporate income taxes, and this deduction was designed to give a similar break to non-corporate business entities (like me) who declare business earnings on our personal income tax forms. It doesn’t affect the bottom line of how much I owe but I include it here for completeness.

Anyway, from there, my tax owed:

I plan to file a tax return that shows these accurate amounts, but I will not include a check for the tax due.

Other Goals

I hope other people will resist their taxes too, and I have tried to make The Picket Line a good resource for people who are resisting or considering it. But I’ve been much less active than usual on this front. A while back I stepped back from the blog and stopped creating new content for it. I’d gotten tired of being a tax resistance scholar and activist, and felt like decentering tax resistance in my life, to make it more incidental, and to occupy myself more with other pastimes.

Much of my “activism” of late is less focused on politics and protest and rebellion, particularly on the national/global scale, and much more focused on embarrassingly wholesome direct action at the local scale. I’ve been volunteering regularly for the local food bank at one of our farmers’ markets, bringing thousands of pounds of fresh donated produce to a food pantry to give to hungry families. And I’ve been helping to operate a mobile shower trailer program that serves homeless people in our community several times a week. (All of this is easier for me because of the reduced and more-flexible work hours that are part of my tax resistance, and so can be seen as another form of tax redirection.♦)

I’ve also been continuing my work on a sequence of essays examining the virtues and how to improve in their practice.

Prospects for the coming year

But maybe I picked a bad time to go into semi-retirement as a tax resistance promoter. The National War Tax Resistance Coordinating Committee has noted a surge of interest in war tax resistance thanks to the war in Gaza. Trump Ⅱ will probably wake up some slumbering anti-establishment sorts too.

I feel conflicted about the Trump administration. On the one hand, they’re vicious, cruel, stupid, dishonest, and irresponsible. On the other hand, they’re swinging a wrecking ball erratically but enthusiastically at most of the institutions of power in Washington and bringing the federal government into thorough disrepute domestically and internationally. I would rather have honorable people smashing the state, but I’ll take what I can get.

The DOGE crew has already begun to hobble the IRS. Knowing what I know about the IRS and its teetering information technology infrastructure, I think as Elon tries his twittery move-fast-and-break-things stunts there, the whole house of cards may collapse. As a result, tax resisters like myself may be safer now than ever just because the tax enforcement bodies are in such disarray. On the other hand, while tax enforcement has at least since the Nixon administration been largely non-partisan, Trump clearly intends to use it to go after his enemies (among which I hope to qualify).

There’s also talk of more methodical destruction. Not long ago, Trump blathered some sort of half-baked fantasy about replacing the Internal Revenue Service entirely with an “External Revenue Service” that would try to fund the government off tariffs somehow. He also nominated Billy Long to be IRS Commissioner. Long, while a member of the House of Representatives, co-sponsored a bill that would have replaced the federal income and payroll taxes with a national sales tax.♦ This is an administration that’s willing to go to the mat for bad ideas, so things like these could conceivably come to pass.

At this point, Congress has not given much of a reliable signal about what it will do with the tax law. The tax legislation priorities thusfar announced by the Trump administration are not particularly radical. But at this point, it’s not even entirely clear whether Congress still holds the authority to make laws that have a non-ceremonial effect; they seem largely untroubled by Trump just deciding for himself what the law ought to be. We are in an era of (among other things) considerable uncertainty regarding the future (or even the present) of the tax code. But assuming tax law (or its equivalent in trumpery) remains more or less the same, and assuming no major unexpected expenses or windfalls, I’m well-positioned to live comfortably and well under the income tax line again in the coming year, though I will again “owe” (and refuse to pay) self-employment tax.

I’ve prepared for the possibility that the IRS may try to seize money from me for unpaid back taxes, so in case this happens, it won’t be a disaster. And, if they fail again, I’m also prepared to dip into my savings to give to charity in celebration.

So on to year twenty-three of my “experiment.”