How to not pay tax in the US

Is it possible in the US to pay no tax?

Is it possible? Yes

Is it easy? No

Income tax– which is what most people think of when you say taxes is the easy one. Just don’t earn any income and you will not owe any income tax. I overstate that somewhat, because you could actually earn up to $400 in self employment income and you would not owe any income tax or SE tax. Technically I should also mention that you could also earn more income than $400 and due to the workings of earned income tax credit you could get back more in tax refunds than what you paid in, but the objective is to never pay tax, and in the case of EIC, you have to pay the tax first, before you get the refund back.

Payroll tax-Closely related to income tax, but if it were not for FICA/Medicare taxes, you could earn up to $12,000 annually rather than $400 and not pay tax, but our goal is never pay tax, so you have to keep your income low enough to not pay any payroll taxes. Blame those pesky Democrats, especially Franklin Roosevelt.

Property tax-Easy one also, just don’t own any assets. Definitely no real estate and depending on which state you reside in, no vehicle. Pretty much every state has some type of vehicle registration cost, some are outright called a tax and some are given the less emotional title of fee, plus you want to avoid the next item, sales tax, and when you purchase a vehicle in most states, you have to pay sales tax.

Sales tax-Gets more difficult here, because now you can’t buy any taxable goods. There are some states that don’t have a direct sales tax, so if you live in one of those states and are ok with the fact that when you purchase items the business you buy from is paying a gross receipts tax, then you technically are still within the rule of never paying tax. Good news is many states exempt groceries from sales tax, so you may still get to eat. I am not sure how you will pay for groceries, but at least there is no tax.

Excise taxes-Here we primarily need to address telecommunication and utility excise tax, because those are the ones most people pay and may not even realize it. Cell phones, internet services, electric and gas services almost all have an excise tax included in the bill, so you can’t have any of those services. You also can’t buy gas or fuel due to gas tax, but we already established that you can’t have a vehicle anyway so it should not matter.

So that covers the big five taxes that pretty much everyone pays. Yes there are other much more arcane taxes, but by definition those taxes don’t show up very often and thus should be easier for you to avoid. As soon as you find a nice cave to live in, preferably near some land where the owner will allow you to grow crops for food, then you can achieve your American dream of never paying taxes.

 

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