Whether income tax is legal or not, it still represents an unfair deal to the taxpayer, since the government did not make any contributions to the earnings that are made subject to the tax. At best, income tax is “legalized theft”.

No wonder then that so many people try to avoid paying taxes, or at least reduce the amounts payable to the minimum possible.

Under the tax statutes of most countries, taxes may have to be paid, but the regulations also provide economic incentives for certain government approved actions. Many of those also have the clear purpose of not destroying the competitiveness and sustainability of the foundation of the taxes: the basic economy! For a parasite to thrive, it cannot kill the host…

Tax avoidance is the legal utilization of the tax regime to one’s own advantage, in order to reduce the amount of tax that is payable by means that are not unlawful. By contrast, tax evasion is the general term for using illegal means to hide or obscure an evident tax liability.

For government, however, it makes no difference, because both tax avoidance and tax evasion lead to less money for the government! Also, the government has a serious interest in scaring people away from using legal tax avoidance, and it does so by deliberately blurring the limit between what is legal and what is not.

Nevertheless, there is a very clear difference:

Tax avoidance is planned action that has as part of its purpose, or as it full purpose, to reduce or eliminate taxes, by using the law.

Tax evasion is changing facts about the past, so that an incurred tax liability “disappears”, like eliminating evidence of a crime in a cover-up action.

A crime is a crime, whether or not there are witnesses…

Tax evasion is criminal, whether or not it is an affective means of avoiding taxes that were due.

The core of the government’s methodology is always to demand that people sign a contract called “the tax return”. In that contract, you promise to divulge these things, so, if you don’t, you are in criminal breach of that contract. In this context, it does not matter if the taxes are collected illegally or not. And it does not matter if you are in breach of the law by refusing paying those taxes. What matters is that you signed that contract, and, when you are in breach of it, you are ripe for prosecution without due process!!!

There are only two legal ways out of that dilemma:

1. Don’t sign that contract.

2. Make sure that your activities abroad are not done in a way that makes YOU liable…

The second option is not as easy as it seems to be, if you want to stay on the right side of the law. But it is possible – and it can be learned. But it takes that you first fully understand how the government is using contract law to betray you and trap you.