Think it depends on where you live, how high your overall tax rate is, and how good or bad your government is. If you lived in 1970s Sweden, had a very high income (Bjorn Borg, Astrid Lindgren) and were facing effective tax rates of 90% +, then some tax evasion might seem quite reasonable, since the state is effectively violating divine law by taking so much. If you live somewhere fantastically corrupt, like modern-day Nigeria, you might very rightly think that the state doesn’t deserve your money since it will just waste it in some spectacular way, and you can do more good by spending it yourself as you see fit (even if it’s just reinvesting in your own business or whatever).
Mostly, I would say that most of the developed world is neither so corrupt nor has so outrageously high rates as to justify tax evasion, but your mileage may vary. I do think that some level of tax evasion is perhaps a necessary thing in the world in order to keep governments in check, since almost everyone can evade taxes but only the wealthy can really afford the expensive advice from lawyers and accountants to legally avoid them. The IRS estimates from random audits that something like 15% of federal taxes due are unpaid, largely I think due to how easy it is to underreport your income when filling out your taxes: PAYE systems are quite underdeveloped in the U.S.
The widespread prevalence of tax evasion might be thought of as a useful check on government power, since it communicates to federal policymakers that excessive increases in federal income taxes will only be met with more evasion. If you want to get all social justicey about it, you might also argue that a little bit of blue-collar tax evasion allows for historically oppressed minorities (Borderers, black people, etc) to build wealth over the generations. At the same time, while a little bit of tax evasion on the side helps keeps the state in check, if everyone did it, things would rapidly break down. But it’s a nuanced question and not much more can be said without knowing more about your personal situation. The ends do justify the means some of the time!
At least from a US perspective, the ability to “underreport your income when filling out your taxes” heavily depends on the source of that income. If your income derives from an on-the-books job, your ability to underreport income is nearly zero (although you can try for some phony deductions). If you’re self-employed or run a small business, your potential effectiveness is an order of magnitude greater—that 15 percent tax gap varies widely by type of income. I think variance in ability to evade seriously weakens some of your proposed benefits of evasion.
Think it depends on where you live, how high your overall tax rate is, and how good or bad your government is. If you lived in 1970s Sweden, had a very high income (Bjorn Borg, Astrid Lindgren) and were facing effective tax rates of 90% +, then some tax evasion might seem quite reasonable, since the state is effectively violating divine law by taking so much. If you live somewhere fantastically corrupt, like modern-day Nigeria, you might very rightly think that the state doesn’t deserve your money since it will just waste it in some spectacular way, and you can do more good by spending it yourself as you see fit (even if it’s just reinvesting in your own business or whatever).
Mostly, I would say that most of the developed world is neither so corrupt nor has so outrageously high rates as to justify tax evasion, but your mileage may vary. I do think that some level of tax evasion is perhaps a necessary thing in the world in order to keep governments in check, since almost everyone can evade taxes but only the wealthy can really afford the expensive advice from lawyers and accountants to legally avoid them. The IRS estimates from random audits that something like 15% of federal taxes due are unpaid, largely I think due to how easy it is to underreport your income when filling out your taxes: PAYE systems are quite underdeveloped in the U.S.
The widespread prevalence of tax evasion might be thought of as a useful check on government power, since it communicates to federal policymakers that excessive increases in federal income taxes will only be met with more evasion. If you want to get all social justicey about it, you might also argue that a little bit of blue-collar tax evasion allows for historically oppressed minorities (Borderers, black people, etc) to build wealth over the generations. At the same time, while a little bit of tax evasion on the side helps keeps the state in check, if everyone did it, things would rapidly break down. But it’s a nuanced question and not much more can be said without knowing more about your personal situation. The ends do justify the means some of the time!
At least from a US perspective, the ability to “underreport your income when filling out your taxes” heavily depends on the source of that income. If your income derives from an on-the-books job, your ability to underreport income is nearly zero (although you can try for some phony deductions). If you’re self-employed or run a small business, your potential effectiveness is an order of magnitude greater—that 15 percent tax gap varies widely by type of income. I think variance in ability to evade seriously weakens some of your proposed benefits of evasion.